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No spending cuts and the debt soars. Get set for a major fiscal event in 2-3 years; buy gold.  – SAFE director

The Ex-Im Bank is just another federal subsidizer for all sorts of unsavory institutions, plus part of the bailout network. It's a taxpayers' nemesis, and a counterforce to stable economic policy. If the Republicans support continuation of the EIB, they are part of the problem.  Abolish the EIB and all like it. They are millstones around the neck of legitimate enterprise.  –  SAFE member (Georgia)

Rapid elimination of the budget deficit would tank US economy in the short run; it’s simple math (40% deficit x 25% of economy = 10% hit to GDP).  On the other hand, soaring debt has reduced the potential economic growth rate by two percentage points and this drag effect will keep getting worse.  There being no apparent will to make material spending cuts in any area other than defense, I see no hope for a “soft landing.” – SAFE director

Yale economist Robert Shiller sees the world in a “new age of austerity,” which is akin to “the late Great Depression.”  Quantitative Easing “might help,” but is unlikely to offset the general mood of austerity.  The outcome will not be simply a matter of economic variables, but how people react to the situation. http://bit.ly/IIDsZH (9+ minute video of Shiller interview on Squawk Box Europe.)

Generally, the debt for other countries reflects their total debt.  In our case, we have all the state debt over and above national debt.  I don't know what our total state debt is, but I'll bet that it plus national debt would be even more staggering. Can we ever repay? – SAFE director 

I think that Paul Ryan intends for his plan to be a serious one and he deserves credit for putting it out. It's better than his last proposal but still not comprehensive enough. In addition, it has no bipartisan support. Therefore, it's going nowhere for now.  –  David Walker

Looks like a small step in the right direction. We must rally as many as we can.  Thanks for your leadership.  -  Member of Leadership for Liberty (PA)

I’m OK with supporting cuts in any federal program, in any amount, and for any length of time.  –  SAFE director

This week’s entry shows a lot of work and a good understanding of the real situation – which really alarms me.  If we don't take our medicine, we won't recover.  –  SAFE director

Why is the president running as a non-incumbent?  As a community organizer, that’s what he knows how to do.  –  SAFE member

Excellent work.  -  Financial executive 

What do we do if a nuke goes off in Manhattan or Haifa? Start diplomatic talks?  -  SAFE director

Holy moley! What a blog.  -  SAFE director

This is a good overview of our current picture. If we cut much more out of defense, we will have to rely on air and naval power or long-range missiles to get the job done. Missile involvement will restart the nuclear discussion, which has been relatively quiet for a while. Air power will rekindle the fires of military terrorism opponents. Both of these will have a public relations effect upon our government. Therefore, I think we should add to our list of necessities for elected officials a requirement for a very thick skin.  –  SAFE director 

Thoughtful analysis as usual.  Undertaking a cost/benefit analysis is entirely logical, but requires dealing with noises from those affected at their respective feeding troughs.  – Former IBM executive, South Carolina

Good analysis. I'm not sure it will matter which presidential candidate wins. We will have 4 years of gridlock. - Dan Mitchell, Cato

Update: a letter summarizing the “bin it” viewpoint was sent to about 60 members of Congress, on both sides of the aisle, this morning.  Here’s the link: http://www.s-a-f-e.org/contacting_legislators_2011.htm#120511.  

It’s fine to push for fiscal responsibility, but Congress will NOT STOP SPENDING. – SAFE director

I fired off my thoughts to the Joint Committee, thanks for the link. The cry to raise taxes is absurd . . . the members of Congress already squander the tax revenues that flow into Washington, whereas they should be reducing spending, because the federal budget contains political schemes not authorized by the Constitution, the same Constitution they took an oath to support. – SAFE member, Arizona

I don’t believe the Joint Committee members will propose real spending cuts unless there is a huge fiscal emergency.  Could happen, witness the burgeoning Italian debt problem with the premier on the brink of being forced out, but probably not before 11/23. – SAFE director  [Response: We remain hopeful, but skepticism about the JC doing anything constructive is growing – and may well be vindicated by events.] 

Governments attain their powers by spending and buying votes from an ignorant polis. Governments never pay down the debt and will never agree to cut spending except at some later date or on some remote asteroid. All governments will default on the debt in a variety of ways. – SAFE director 

[Response: Generally true, but there have been exceptions, e.g., New Zealand halved its government spending in the 1990s.  This audiotape (3 segments, 1.25 hours, .WAV files, compatible with Windows XP and Mac OS X) by Maurice McTigue (now with the Mercatus Center) explains how it was done. McTigue1, McTigue2, McTigue3.]

You do not mess around. This is outstanding! – Financial executive

I’d like to expand on several points: (1) Proceeds from the auction of carbon allowances by the Regional Greenhouse Gas Initiative (RGGI) are not remitted to the Delaware treasury, they are primarily used to fund a nongovernmental organization called the Sustainable Energy Utility (SEU), which in turn advocates the renewable energy cause and subsidizes various renewable energy initiatives, all without effective public supervision; (2) The SEU and the Center for Energy and Environment Policy (CEEP) at the University of Delaware are headed by the same individual.  On the CEEP Website, “cheap energy” is characterized as “simply a form of subsidy to the status quo at the expense of future generations.”  It is therefore proposed to “take the necessary actions to build a sustainable and equitable energy regime.” http://www.ceep.udel.edu/energy/index.html; (3) Speculators have fled the RGGI market due to New Hampshire's attempt to escape, Delaware's failed effort to end participation and New Jersey's unilateral withdrawal.  The auction revenue has fallen from $2.5M per quarter to $400K. –  SAFE member and citizen activist

UPDATE: one-page summary of this entry sent to  Joint Committee and JC members. http://www.s-a-f-e.org/contacting_legislators_2011.htm#101011 

Don’t expect any requests for further help.  The JC members can do nothing but stall.  – SAFE director

Compromising to get things done re the fiscal crisis is not the answer.  The only thing that could come out of that would be less socialism.  We don't want ANY socialism.  It is killing Europe and will surely kill us as well. We don't need Democrats or Republicans per se, we need conservatives. – SAFE member in PA

I hope they [the members of Congress] are watching the TV reports about the financial crisis in Greece, where the citizens are protesting the austerity measures and increased taxation -- AND calling for a drastic review of government expenditures, to be based on value-received criteria.  Or so the reporter indicated. – former IBMer

As usual I agree with your outlook, not that it helps me sleep better.  –  College classmate

A result of global warming to be sure.  –  SAFE director

Re the latest "Nail on the Head" blog, I think the only "Hammer" that might work--and Mancur Olson, whom I knew, would probably agree with me – is a proposed 28th Amendment to the U.S. Constitution.  It would bar Congress from (a) restricting the rest of us while exempting itself, or (b) providing special rights and benefits for its members that no one else gets.  – Richard Timberlake, Georgia 

[We agree with the spirit of the proposed amendment, but it might not prove to be a panacea.  http://bit.ly/cXbCao] .

House Speaker Tip O'Neil: “All politics is local.”  –  SAFE director

SAFE note: In addition to posting this entry and our letter to the Joint Committee, we brought them to the attention of a number of contacts.  The feedback was generally positive, but we did not hear from everyone and there were few comments on details of our proposals let alone offers to reinforce them.  Moral: it is comparatively easy to show the fiscal problem is real, but getting people to join in supporting a concrete solution is a “different kettle of fish.”

“Suggestions well thought out” (SAFE),  “I sure hope they’re listening” (SAFE), “the specifics are excellent” (SAFE), “thanks for this thoughtful piece” (Princeton professor).

SAFE director: My approach is to propose more drastic changes, because they are needed, and a good bargaining tactic.  Thus: Give Medicaid to the states without grants, make the goal debt repayment vs. balancing the budget, and institute a “temporary” tax for each overseas military action.

[Lest we forget, a telephone excise tax imposed to help pay for the Spanish-American War was in effect for 108 years. http://usat.ly/uEPQ4]

”I agree completely,” said a Cato expert, but “of course, the Dems won't agree to a package of spending reforms, so a sequester is the best option.”

#Prof. Larry Kotlikoff, Boston University thinks the “purple” tax (http://bit.ly/p1wDix), health[care] (http://bit.ly/eMGPbV) and Social Security (http://bit.ly/oPCqj8) plans “are the ways to go.”

[We will review them as time permits.]

 #“Never happen” said a SAFE director re our suggestion that the JC should emulate the Fiscal Commission in 2010 by conducting a relatively open process (videotapes of general meetings, publish draft report before voting).

He sees no chance of joint recommendations for real spending cuts.  “The House has to just stand firm on the Appropriations committee and cut spending apart and different from any joint votes for a budget. This will raise great fires and anger.” 

At the rate things are going, this could become the new national anthem. http://bit.ly/EPgNz  - SAFE member, Arizona

The only real questions in the wake of S&P cutting the U.S. debt rating to AA+ are: (a) What took so long? & (b) Why isn't the rating lower?  -  SAFE member, Delaware

Too true.  All too true.  -  Michael Tanner, Cato Institute

7/11 UPDATE: The grandiose idea of a $4T deficit reduction deal collapsed over the weekend, and the principals in the debt limit showdown are reportedly back to discussing $2T+ deficit reduction to pay for a debt limit increase of equal side with continuing disagreement as to whether tax increases will or will not be included in the mix.  Yet another meeting of the principals is scheduled today.

Multi-year tax agreements are untrustworthy.  Whatever Congress agrees on this year will change next year, when a new budget is presented and debated.  The time has come to face the facts.  We cannot continue to spend at the rate we have without disastrous results, so there must be no INCREASE IN THE DEBT CEILING! As for concerns about the consequences of default on our debt obligations, there is plenty of revenue to meet those obligations if we pay them first. – SAFE director

Both sides must bend, so let’s put half the federal budget on the table along with a copy of the U. S. Constitution.  It will be seen that half of the budget is for political schemes, not authorized by the Constitution, which serve to keep corrupt politicians in office. – SAFE member, AZ

I agree that the president and his party are pursuing policies that would bankrupt America, with a little help from some Republicans.  Thank goodness there are only 17 months to go until the 2012 elections. – SAFE member in Arizona 

Congress will not offer much of anything in the way of real spending cuts, because of all the sacred cows being protected.  Take a look at what has been going on in Greece and our own state of California.  I don’t believe there can be any real change without a market crash that forces our political leaders to push the “reset” button. – SAFE director

Postscript:  SAFE sent a letter to Vice President Biden et al. on May 31, which conveyed the substance of this entry. http://bit.ly/iCaPHT 

I share your view on the seriousness of the problem.  College classmate, South Carolina. 

The blog entry and letter are clear, and much more "hard-hitting" than I used to see from SAFE.  This type of input is not readily accepted, so it MUST be done by as many as possible, as often as possible to try to knock some sense into these politicians' heads!  Retired finance executive.

How can we be assured of a 'guarantee' on spending cuts?  I would want to see the agreed cuts put into legislative language and published for all to see.  History shows that promises of action after the next elections could not be counted on.  SAFE director.

More deceptive slogans might include: (1) “Everything must be on the table.”  How about putting a copy of the U.S. Constitution on the table?  (2) “No one is above the law.”  Good idea, but corrupt politicians and illegal aliens seem to get a pass.  Keep up the good work, exposing the political elites who are bankrupting our country.  –  SAFE member, Arizona

These 16 Tons lyrics also apply because the skyrocketing debt will be dumped on taxpayers soon enough: (1) “I owe my soul to the company store,” and (2) “another day older and deeper in debt.” Let’s hope Americans will dig their way out of this mess in November 2012. – SAFE member, Arizona

Mainstream media has basically ignored any connection between domestic oil production restrictions and soaring gasoline prices.  “The Business & Media Institute found that out of the 280 oil price stories the network evening shows have aired since the 2010 Deepwater Horizon oil spill, only 1 percent (3 stories) mentioned Obama's drilling ban or other anti-oil actions in connection with gasoline prices.” http://bit.ly/hnFi8a - SAFE director 

Update (Fox New, 4/25/11): the EPA has issued an order blocking Shell drilling in the Arctic by denying air permits that was to have started this summer after 5 years of effort and nearly $4 billion spent to date by the company.  Such projects are needed to combat declining production from the Alaska North Slope, which could force closure of the Trans-Alaska pipeline.  http://fxn.ws/gaq8ob

Isn't it true that even the fed's taxes on gasoline exceed the profits of the oil companies on a cents/gallon basis?  Certainly, federal, state and local taxes must be greater in total.  And the governmental bodies involved do nothing to find, develop, refine, distribute and sell anything.  No risk; outsize reward. – SAFE director  [Point well taken.  From the 4/21/08 entry, Pain at the pump: why energy prices are soaring: (1) On average, U.S. drivers pay federal + state excise taxes of about 50¢ a gallon (47.0¢ on gasoline, 53.6¢ on diesel) for motor fuel. (2) Income taxes are levied on oil company profits as well, and the total taxes imposed on the industry generally exceed company profits. Between 1981 and 2006, according to the Tax Foundation, “government collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period.”]

I think the two parties are on track to keep spending until the economy collapses. There is little hope unless we have another financial crisis. – SAFE director 

[If so, the next financial crisis will result in changes that are not only deeply disagreeable but also irreversible.  See, e.g., “5 things that will happen to you when America goes bankrupt,” John Hawkins, Townhall.com, 4/12/11. http://bit.ly/dL7Dzk] 

Attach the Debt Authorization to a Balanced Budget Amendment.  This should have an implementation period of 7 years - to give time to get to a balanced budget.  Once we have balanced budgets, we can begin to pay down the debt - and we will stop borrowing. 

Some features of amendment - All funds must be included including entitlements, defense and interest. Accounting must conform to accounting laws for private companies.  Taxes can only be increased with a 2/3 vote of each house of Congress.  Provision can be overridden ONLY in the cases of declared war or declared national emergency and a 2/3 vote of each house of Congress. -- Joe Hilliard, PA

1.  Gov. spending should be brought back as close as possible to the taxpayer.  The way it is now it is viewed as "free" money.  Nothing is saved by refusing Federal funds since they will just go to someone else.  In short, we need much smaller Government.

2.  Eliminate government departments such as the Department of Education.  Having been a school superintendent, I saw much waste and few benefits from Federal involvement.  Same can be said of agricultural subsidies.

3.  Everyone should be paying some tax so they all feel the effects of spending.

4.  There should be much more stringent rules for the spending of welfare funds.  I have seen commodities being sold to obtain money to buy liquor and much spent on non-essential food and drinks such as soda pop.  – Richard Kirsch, SAFE member, South Dakota

I’ve found Hayek’s writings to be tedious and wordy, but am looking forward to the "creative" liberal approach! – SAFE director 

Thanks for my 15 seconds of `”fame.” –  Harry Thompson

The federal government posted a record $223 billion deficit in February.  That’s nearly four times larger than the spending cuts in the House Republicans’ spending bill for the remainder of FY 2011, and over 30 times the Senate Democrats’ opening bid.  Apparently, the politicians intend to spend us into bankruptcy.  – SAFE director

We have said quite a bit about two threats if government spending is not drastically curtailed: huge tax increases or sharply higher inflation.  A third possibility is the confiscation of wealth, such as via a mandated conversion of private retirement funds into government-controlled accounts. This ploy has been used elsewhere, e.g., Argentina, and ideas have been suggested in this country that might have a similar effect. http://www.humanevents.com/article.php?id=36823  --  SAFE director

The promise of future spending reductions is nonsense and all concerned know it. The president et al. are willing to run huge deficits, whatever the economic consequences, because they are fixated on wealth redistribution.  –  SAFE director

I was in a florist shop last week, run by a fellow and his sister, and asked if government regulation had any negative effect on his business. His first reaction was that he had moved to Delaware from Philadelphia and the business climate was much better here. In further conversation, however, he admitted reluctance to hire some part time help, like a student to do basic chores, because he could not afford to pay the minimum wage and was also concerned with getting stuck with healthcare costs. I wonder if Vice President Biden ever really talks to businesspeople in his home state. –  Retired finance executive.

I agree the government is not adept at creating jobs, but that does not mean it will stay out of the way.  Many members of the public have an unrealistic view of the ability of the government to run the economy. Also, members of Congress point to programs as proof that they are “doing something” about unemployment, whether or not there is any proof that the programs are achieving useful results. –  SAFE director

Nice letter – we’re also trying to bring spending down to 20% of GDP as soon as possible.  –  Brian Riedl, Heritage Foundation

This challenge [restoring accountability and fiscal responsibility to the federal budget] is not something that I take lightly.  Moving towards a more balanced budget will take creative thinking by leaders in both parties.  There are a number of different steps that I believe the Senate should take to begin to reduce the deficit, not the least of which is returning to a process of drafting, debating and adopting annual budget bills.  I also believe we must streamline our tax policy to make paying and collecting taxes more straightforward and efficient to the benefit of both taxpayers and the Treasury.  –  Senator Chris Coons, in a 2/15/11 letter

Barring a major financial event, like Fitch or SP downgrading our AAA credit rating or a few big banks going down, there will be no attempt to seriously cut anything because the Tea Partiers don't have enough votes as yet. – SAFE director 

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A SAFE member in Arizona reminds us that Wednesday, December 15, is Bill of Rights Day.  Imagine how James Madison would have felt about the current antics in Washington.  http://bit.ly/g8x2fW

I agree with all of the points, especially the overhaul of our tax system. –  SAFE director

Extension of the Bush tax cuts is fine, but the estate tax should not be revived (in any form) and government spending must be cut.  The bond markets have responded negatively to announcement of this larded-up deal, and Moody’s is warning of a potential downgrade of Treasury securities if it goes through. http://www.cnbc.com/id/40641123 - SAFE director

I liked the comments to Delaware members. http://bit.ly/hUyTjP How about including them in a news release: SAFE, an organization founded and headquartered in Delaware promotes smaller, more efficient government, etc. –  SAFE director

Looks like the Fiscal Irresponsibility Commission didn’t dare propose eliminating political schemes not authorized in the Constitution; that would cut the budget in half.  Keep up your good work, exposing the political elites who are destroying America.  Only 23 months to go until the 2012 elections, when maybe things will be put back on track.  –  SAFE Member, Arizona

Given past performances of Congress, any new revenues will go into new social programs and the cuts will never be enacted. Nothing substantial will happen until we have another financial crisis. –  SAFE director.

I will be surprised if anything comes of this Commission's recommendations, but I was encouraged today to hear Erskine Bowles say the spending must be curtailed (or something like that).  Coming from a Clinton adviser, that is significant. –  SAFE director.

Wow! I would love to be on the team with authority to start killing all of these stupid regulations.  –  Retired finance executive

My hat is off to you!  Hope our legislators are listening. – IBM alumnus.

Would the politicians treat a spending ceiling like they did the debt ceiling?  Anyway, it sounds like worth trying to me.  -  SAFE member, California

Right on, right on, right on, & have the chairman represent the taxpayers, who are forced to pay the bills.  -  SAFE member, Arizona.

If you want to see what an ingrained entitlement attitude does to people, watch the unions in France rioting and bringing the country to a standstill solely because the government wants to (has to, if it doesn't want to go broke!) move the full retirement age for their equivalent of our SS up 2 years from 60 to 62.  We just did that; instead of 65, it's now 67 for anyone age 50 or younger, and the American public accepted it without a peep.  It probably needs to be moved to 70.  Heck, I'm 72, and still working (have my own consulting business), still cut my own grass, change the oil in my cars, fix shingles on my roof, climb my (large) Pin Oaks to cut limbs off with my chain saw, and see no reason to move to a "retirement community".  If my full SS payments hadn't started until I was 70, it would not have cramped my life style materially.  –  Climate Common Sense member

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I like the three commissions idea, which could reassure bondholders that the U.S. is on the right track.  Why not incorporate this idea in an op-ed piece for the News Journal and/or other publications in the region?  – SAFE director

This may be a Hail Mary proposal because we have to deal with politicians, but if you and I were running the country these proposals would be implemented -- and faster than the suggested deadlines. It's a realistic proposal, when considered by people of principle. –  Retired financial executive

Excellent!  This needs to be read by Carper, Kaufman & yes, Castle.  I want to discuss Thursday.  -  SAFE director

You almost have to be a policy wonk to read through this, but it’s worth it if you want to get a handle on why we have so many conflicting views on so many issues.

It's a coincidence, but just this morning I was discussing, with the principal of our school, how people who were born at different times have very different worldviews. People 70 and older think very different from the boomers and as for the under 30 crowd I have no idea just what their driving values are if any. On the other hand, history has given us lots of surprises and I am not ruling out the younger citizens. Sometimes I believe that they have escaped the brain washing that my generation received because we followed the rules. -  SAFE member, Maryland

Candidate X has been talking about the choice of the future – state control or personal freedom.  I'm going to forward this piece to a contact at the campaign.  -  SAFE director 

Our political leaders must understand that upholding and defending the Constitution does not mean doing anything that suits their purposes, and if they don’t get it they should be voted out of office. Keep up your good work, exposing the corrupt politicians who are destroying our country.  -  SAFE member, Arizona

On the debate over the turnout, let the liberal press or the liberals underestimate the crowd at their own peril.  If they say it's a small turnout, then the event is not significant.  I think the 300,000 to 500,000 is probably more accurate.  The liberals better be running scared!  –  SAFE director

Thanks for this.  Best summation of the issues anywhere, rant-free. – Virginia attorney

Quoted comment by MoveOn.org about the $2 trillion of government bonds in the trust funds misses the point.  Congress spent the money, so the asset held by the trust funds is offset by a corresponding liability of the government – net balance zero.  If Social Security had used the temporarily excess funds to buy T-bonds, a real asset could have been created. – SAFE director

If all tax exemptions are removed, look out!  Homebuilding and charitable/non-profits will suffer greatly!  If the Bush tax cuts are allowed to expire, the economy will suffer greatly! – SAFE director

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As noted in this week’s blog entry, SAFE recently submitted a comment to the Fiscal Commission.

7/26/10 – Urged the Fiscal Commission to seek best answers to the fiscal problem, avoid arbitrary solutions such as 75% spending cuts/ 25% tax increases.

Several contacts provided feedback, including these comments:

Many thanks for your email.  I'm pleased that you are commending my book to the Fiscal Commission. Let us all hope they are able to negotiate effectively!  Professor Robert Mnookin, Harvard Law School

I fear that the Commission was created with just one goal - to get key Republicans to surrender their no-tax-hike position. That doesn't mean we shouldn't try to educate them, so I'm glad you're sending info. Let's keep our fingers crossed.  Daniel Mitchell, Cato Institute

In addition, we sent a pointed message on this year’s activity in Washington to the members of Congress from Delaware. 

7/26/10 – It is time to recognize that the economic stimulus package was a mistake, slash wasteful government spending, extend the Bush tax cuts, and stop attempting to “take over” the private sector.

Dear readers, we would love to hear what you think.

We can only marvel and peer into the abyss to see what a  "tax expenditure" might be. Is this like a Clinton tax “investment?” – SAFE director

Thanks.  Here is my testimony to the Fiscal Commission at the public hearing on June 30.

http://www.cato.org/testimony/ct-ce-06302010.html – Chris Edwards, Cato Institute [Well put!  Makes our point that the Discretionary [Sending] work group could benefit from talking with Mr. Edwards in greater depth.]

Well put!  How can we get a reasonable chance that a Commission member will read it? – SAFE director [We are planning SAFE comment to the Commission that will summarize “take your time and do the job right” point and reference the blog entry.  Other ideas for follow-up would be appreciated.]

I see little evidence of any intention to cut spending.  Although Co-Chair Erskine Bowles has talked about the need for spending caps and said he would not like to see federal tax revenues go much above 21% of GDP, he is also believed to favor a consumption tax and has likened tax breaks (which he would put on the chopping block) to “spending by a different name.”  Rising taxes to pay for gold-plated social programs will tank the economy, and it is imperative to break this pattern. – SAFE director

The SAFE blog provides good insightful info on very serious topics -- may not always agree with the positions taken -- but I learn a lot and it helps me reach a more informed understanding and point of view  -- keep up the good work.  – Retired finance executive

I propose two suggestions from SAFE re bringing down the deficit: (1) Concentrate on making it easy to start a business and make it profitable, with no subsidies, by eliminating or streamlining regulations.  (2) Cut spending enough to pay off debt, at a rate as fast as possible.  Stop grants to states - the American people are endangered more by the federal debt than by financial problems of individual states.  – SAFE director

Thanks for sharing and for your kind follow-up note.  – David Walker

Good stuff, as always.  We linked to you on our blog here: http://www.ntu.org/governmentbytes/fiscal-commission-meets.html.

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I agree that the “Fiscal Responsibility Commission” will propose big tax increases to keep the spending party going unless the American people push hard for a different outcome. By way of historical perspective:

• “The American people will never knowingly adopt Socialism,” said Norman Thomas in the 1930s.  “But under the name of Liberalism, they will adopt every fragment of the Socialist program . . .”.  

• An inspirational statement from JFK’s inaugural address in 1961 has since been twisted into: “Ask not what your country can do for you...demand it.”

• February 2009, Newsweek cover story co-authored by Evan Thomas (a grandson of Thomas): “We are all Socialists now.”  –  SAFE member, Arizona

I watched the I.O.U.S.A. Solutions program, and here are some points that struck me.  

       (1) “What’s the role of government?” asked Amy Holmes.  Good question, but no one mentioned adhering to the Constitution. Half the federal budget consists of items not enumerated in or contemplated by the Constitution – which violates the spirit if not the letter of the 10^th Amendment.

(2) Former Senator Bradley and Senator Conrad spoke about telling people the “truth,” but there was an earlier video clip of the president telling a whopper about not passing on the national debt to future generations.

(3) The politicians would like to keep the party going because it keeps them in office.  With 47% of the citizenry not paying income taxes, it is politically advantageous to provide freebies for all and stick taxpayers with the tab.  We the people need to put a stop to this.  –  SAFE member, Arizona

I'm with you on vote them out.  – SAFE director

It would be more meaningful to divide the $62T fiscal hole by the 65 million or so Americans who pay income taxes.  That works out to nearly $1 million per taxpayer.

We need to cut every government salary by 20%, every government-spending program by 10% or more, and impose a permanent hiring freeze.  Then cut corporate taxes to reinvigorate the private sector and keep up the inflow of tax revenues.  

But don’t hold your breath.  Politicians would rather see roaring inflation and default on our debts than cut the salaries of government workers. They will probably try to inflate their way out of this mess, creating an even bigger mess.  –  SAFE director

The U.S. Department of Education must be abolished, for the sake of children's education, and to show evidence that the federal government is serious about doing what is necessary to save the economy.    Bill Morris

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Thanks for keeping me advised of your excellent reporting work.  David Brooks, of the NYTimes, said on PBS on Friday that the national debt will shortly become the problème-du-jour . . . certainly exacerbated by medical missteps.  Brooks cited the Treasury's latest debt offerings, which went poorly.  My only hope is that the huge number of Boomers will awaken when they see their retirement plans slipping away.  –  Princeton classmate

Clearly, we should be on the lookout for renewed offensives in other areas, notably cap and trade (or the regulatory equivalent), immigration "reform," and huge tax increases (after the November elections). This activity is ideologically driven, despite repeated experience that it will not work.  The weaknesses of the left are inflation and unemployment, either (or both) of which will bring down governments. –  SAFE director

Great letter!  I think you, er, "hit the nails on the head."  There's some reason for optimism in that Speaker P. is having trouble garnering the votes.  If there's no vote before spring vacation, the Congressmen will hear even more back home how much this bill is disliked.  I heard this morning that there are 35 house seats now held by D's that polls show a 70% disapproval of the HC bill.  Will they walk the plank for Nancy and Barry O.?  Frankly, I doubt it.  –  SAFE director

We appreciate your commitment.  It's going to be close. –Michael Tanner, Cato Institute

Currently, we have the spectacle of programs teaching people how to put grandma on the dole, so they can get a large inheritance and live big.  To help avert meltdown, Medicaid must be transferred to the states.  If that causes a few states to go bankrupt, so be it, but the program must be downsized.  As Chris Edwards wrote, the availability of federal  money causes the states to overspend.  –  SAFE director

 [Note: See SAFE reform proposal #4: “Have the states assume full responsibility for Medicaid and SCHIP programs, with the federal government providing block grant funding and not attempting to dictate what coverage should be provided.” http://www.s-a-f-e.org/healthcare_reform.htm] 

Looks like the president’s agenda is GO GREEN...RECYCLE CONGRESS. –  SAFE member

Excellent blog! Here are some related thoughts: 

• Cato: Natural gas power is typically being used for peak load requirements.  Apparently both coal and nuclear are cheaper, or have been cheaper.  (The high cost of nuclear construction is sunk cost for existing facilities.)  If natural gas gets cheaper due to new techniques for “fracking” shale deposits (as Cato may be assuming), it can be used more, postponing a power shortage.  Characteristically, the environmentalists are gearing up to attack “fracking” because it works.

• Heritage:  Excellent analysis of the government's interference in private sector initiatives.  How can we pressure the government to get out of the way of smaller nuclear reactors?

• We understand that the Delaware PSC plans to add “environmental cost” in evaluating Delmarva Power's energy purchase plans.  They will probably add enough “cost” to make coal look "too expensive."  –  Bill Morris

I was visiting the world’s largest uranium mine in Australia and asked the guide why we are not using nuclear power like France, Japan etc. It comes down to the policy against reprocessing the fuel, which as you point out is a holdover from the Carter era.  –  SAFE member, Maryland 

I'm fully onboard.  Heck, they can put the nuclear stuff under my town if they want.  –  Virginia attorney

There is NO support for nuclear power among the lefties. They will pursue follies like they do in Spain and Germany.  SAFE director 

Re stated mission of the Fiscal Commission:  This verbiage means nothing. Leftist governments cannot survive without spending and letting the interest payments loose just provides an outlet. I am all for gridlock.  –  SAFE director

If anything, you have understated the debt crisis by focusing primarily on the fiscal side of the equation. There is no way the U.S. can maintain a AAA rating while holding interest rates down, and if interest rates are allowed to soar this will put more pressure on the federal budget and cut off the economic recovery that everyone is counting on. The assurances of Treasury Secretary Tim Geithner to the contrary are worthless.

      And the United States government is not the only entity with fiscal problems.  Some U.S. state governments are under heavy pressure too, with California at the head of the list, and they will predictably be headed for Washington with hat in hand.

      Beyond our borders, Greece and Spain are in crisis mode and the European Union is under pressure as a result.  Their problems will adversely affect the U.S., and vice versa.   

      Ideally the governments concerned would cut back their spending and regulatory regimes severely and allow market forces to bring the situation back into balance.  The more likely result, if history is any guide, is they will keep overspending and default on their debt.  Drastic, disruptive changes can be expected over the next decade as a result. –  SAFE director

The out of control federal budget, has similar characteristics to Toyota`s recent problems ...stuck gas pedal & brakes don’t work.  It’s all about tax & tax, spend & spend, elect & elect.

      There is no need for a Fiscal Commission.  The functions of the federal government are spelled out in the U. S. Constitution, which the president and members of Congress took an oath to support.  Expenditures for these purposes may properly be included in the federal budget. All else represents waste, fraud and abuse, designed to provide job protection for the political ruling class. –  SAFE member, Arizona

Re the healthcare bill, I believe the Constitutional justification for requiring people to buy specified insurance coverage is yet to be explained.  It should have been provided under a standing rule of the House of Representatives (Rule XIII: Calendars and Committee Reports, Contents of Reports): (d) Each report of a committee on a public bill or public joint resolution shall contain the following: (1) A statement citing the specific powers granted to Congress in the Constitution to enact the law proposed by the bill or joint resolution.

http://clerk.house.gov/legislative/rules110/rule13.html 

Given the content of the 10^th Amendment, I doubt that such justification exists.  But what the heck, the sponsors of the Govcare bill won’t let a little thing like the Constitution get in their way.  –  SAFE member, Arizona

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Folks, if there is one thing that liberals know, it's that nature abhors a vacuum. Accordingly, this merry band of sycophants pollutes us with their noxious gas of humbug. – Conservative Caucus member

 I see this nation as being in intensive care.  If we don't fix the problem (Congress) this year, it will be on life support.  Congress is so intent on accumulating the power to control our lives that they are willing to risk being thrown out of office to accomplish it. – SAFE director

I'm not in favor of having a Constitutional Convention. My biggest concern is that it would afford the opportunity for mischief to those who wish to turn the Constitution into a wish list. The "Writers" provided a wherewithal for amending the Constitution that has served us well these many years. – Alex F. Wysocki, Conservative Caucus of Delaware

I fully support the idea of Congressional term limits, but can see no hope for making it happen unless the members voluntarily limit themselves or the voters limit them. A Cons. Conv. with the present Congressional make-up could be a real disaster! SAFE director

Given who holds the reins of the power structure at the moment, we could be in a lot of trouble calling a Constitutional convention.  It could be re-written in a manner that we would not like.  SAFE director

Let the revolution begin, again...no more taxation, without representation...throw the bums out.   SAFE member, Arizona

OK, OK, it was just a thought.  But remember the adage, “nothing ventured, nothing gained.”  Publius

Concerning Gen. Powell's comment about "repeating mantras of the far right," it should be pointed out that Conservatism IS the center.  As I told some of the leadership at the Republican State convention in May, to the right there are the libertarians and the anarchists.  To the left are the liberals, socialists, fascists and communists.  And liberal & socialist are probably synonymous.  Conservatives ARE in the center.  Too many have bought into the myth that conservatives are the far right.  – SAFE director

I think one of the biggest problems is payoffs like we saw to Sen. Landrieu [D-LA] on Saturday.  You should not be able to put, for example, highway money in a defense appropriations bill or defense funding in a health care bill.  I don't know how to phrase this, but I'm sure you get my meaning. – Donna Gordon, Delaware Tea Party

I rarely get time to review everything that comes in but I did read this entry and have to say you have put a lot of ideas on the table and most are very informative. Also good to see you are on top of my favorite think tank, Cato. – SAFE member, Maryland

Machiavelli in his own inimitable way said it best: "When it is absolutely a question of the safety of one's own country, there must be no consideration of what is just or unjust, of merciful or cruel, of praiseworthy or disgraceful."  We should not prefer being humbled to being pertinacious when our country's honor is at stake.  -  Alex Wysocki, The Conservative Caucus of Delaware

Sorry, I got totally lost on this one.  –  SAFE member

I am speechless!  Every “I” is “dotted” and every “T” crossed. I had never heard about Jack Morgan.  I am praying believe me. This is the death or life of our Republic.  –  Steel supply firm executive, Texas

When I read the first sentence [defining site-based management], I kind of bristled.  Accountability is an over-used term and usually only refers to the accountability of the teachers and administration.  With that being said, there are a few important points that you make that really appeal to me.  First, that the principal and teachers at a school generally know what’s going to work best for their students.  They are with them all day; they know their needs pretty well.  Also, I like that the focus is on the students.  Obviously, 7^th grade algebra isn’t for all students, but some are just waiting to soar.  It’s important to meet students where ever they are at and help them advance from there, otherwise they’ll get overwhelmed and shut down.  I especially liked that you mentioned the ACTIVE SUPPORT OF PARENTS.  I can’t stress how important this is.  Too many parents feel like they shouldn’t have to watch over their kids in middle school when that’s one of the most crucial times.  Unfortunately, I experienced many parents who weren’t involved, wouldn’t return calls, wouldn’t come in for conferences, and one that even gave a false phone number to the school.  There is no accountability for these parents.  If a child is suspended, they may stay home alone anyway- not much of a punishment.  Finally, I get sick and tired of all these bureaucrats try to tell teachers how to do their jobs.  Let them try to teach kids after making the children sit through 3-4 hours of testing every day for a week.  Somehow, I don’t think they would be too productive.  The bureaucrats show up for a few hours and think they know what a school is like, but it’s not until they’re in the “trenches” so to speak, that they can really make decisions that are best for all concerned.  Anyway, it sounds like this is a great school.  Good luck to them.  –Delaware teacher

While the Administration mounts a big push for its version of healthcare “reform,” never mind what it would cost, the U.S. dollar is sinking and gold is soaring due to a national debt that is already high (and headed much higher).

If matters are allowed to continue on the present track, look for the cost of imports to soar.  The only way to raise fresh capital will be to print it, with the well-known consequences of spiraling inflation and interest rates.

It is time for the government to start paying attention to the real problems, such as balancing the budget and keeping it that way.  -  SAFE member

Good writin' there.  Has anyone yet answered the basic question whether the pre-plateau global warming trend was caused more by nature than by humans?  I haven't seen a definitive answer on that. – Virginia attorney

SAFE response:  We would say “mostly nature,” as the fluctuation of global temperatures began long before the Industrial Revolution and nothing observed since then seems out of line with past patterns.  See “A Global Warming Primer,” National Center for Policy Analysis, e.g., p. 14

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Please send this 9/12 March on Washington video to everyone you know.  It is genuine.  I was there and that was the woman singing the National Anthem and it was the actual crowd. The only people not participating in this march were the people at the very back near the Washington monument underneath the tents; they were there for another function. -- Donna, Delaware Tea Party

http://www.youtube.com/watch?v=X2saa2rtvs8&feature=player_embedded

*     *     *     *     *     *

Great description of the 9/12 events...hope it goes again next year. -- SAFE member, Arizona

I would have loved to go to Washington for the march, as I have often done with the pro-life group. Keep up your good work---lets hope the fervor continues!  -- Retired dental hygienist, Delaware

The FDA has ordered three firms to stop production of a medicine (natural desiccated thyroid, or NDT, made from a product of porcine origin) that has been in use for 100+ years and is identical molecularly to a compound in the human thyroid.  NDT has been an absolute lifesaver for me and for others suffering from the same condition.  There are reports that the two remaining producers may be closed down, and in any case they may not be able to meet the demand for NDT.  With a 6-week supply on hand, my survival is at risk.  And the plan is to give the government even more power over healthcare? – Steel supply firm executive, Texas

John Adams and his crowd must be turning over in their respective graves!  Oh well, for my final few years, I'm just going to concentrate on improving my golf game.  – Retired financial executive, Florida

We must stop this major healthcare overall – those on Medicare will take a big hit on what services will be covered. – SAFE Member

 Good article. Hits the nail on the head. – Steve McClain

 I believe GovCare would provide free medical care for illegal aliens (the exception clause is meaningless as no mechanism has been provided for enforcement) and abortions at taxpayer expense, and that it would constrict medical care for older folks nearing the end. Following the historical path of government, the plan would be expensive and inefficient. The substantial cost involved would be shifted to the private sector by imposing unfunded mandates on employers/workers and raising taxes. The government is in a huge fiscal hole already, which is rapidly growing due to reckless spending and promises.  GovCare would make the situation that much worse.  Bury businesses in costs and taxes and they will flee the country as they are now leaving California. Let government debt soar and we can expect double-digit inflation or worse and a rating downgrade on U.S. government securities to junk bond status. – SAFE member

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# A SAFE director wishes the three members of Congress from Delaware would read and thoroughly digest the SAFE blog, but doubts it will happen.  “I have been writing them with pithy examples from articles I have been collecting,” he says, and have booked a bus seat for the 9/12 “March on Washington.”

 # A SAFE member in Arizona contrasts the extensive media coverage of the Bernie Madoff investment scam with the lack of recognition that Social Security, which marked its 74^th birthday on August 14, is a government-run Ponzi scheme that will shortchange younger workers when they retire.  In a similar vein, see “Madoff writ large,” 1/12/09.

Also, the length of a document may not correspond to its importance.  The U.S. Constitution took 40 pages (in the Cato printing) to set up the national government; HR 3200 (one of several healthcare bills under consideration) takes 1,000+ pages to prescribe proposed healthcare “reforms.”

# A SAFE member in Delaware is concerned that illegal aliens could receive healthcare insurance subsidies under GovCare.  He likens the situation to apparent plans to count illegal aliens in the 2010 census by not inquiring as to their citizenship.

Although HR 3200 (Section 246) does not allow for federal affordability credits “on behalf of individuals who are not lawfully present in the United States,” it is unclear whether and how illegal aliens would be identified and excluded from coverage.  We plan to discuss this issue in a future entry.

We are employing a three-track approach. The Administration, the Congress, and the American People.   –   Peterson Foundation

In addition to being costly, a bigger federal role in education would be ill advised.  My thought: the Department of Education should be eliminated, and Congress should pay attention to the 10th amendment.   –   SAFE member

If anything, you are understating the problem.  I fear the Fed is hiding some more problems and printed money somewhere by virtue of having injecting trillions of dollars of liquidity into the financial system that do not show up in the government accounts.  – SAFE member

Well done, thanks for sending.   –   Townhall.com columnist

Expresses many of the issues being raised by the dangerous decisions being made in Washington.  Thank you.   –   Retired finance manager

We, too, are very concerned about the budget picture and will continue to express that to Congress and the president.   –   National Taxpayers Union

Great minds think alike.  I had been thinking of how similar the activities of some U.S. corporations are to a feeding frenzy of sharks, and the U.S. Congress is unthinkingly feeding that frenzy.  They fail to remember any history of hyperinflation and the collapse of cultures.  What are they thinking?  How long before they start printing dollars to cover all they have promised?  How did we get to 1.5 trillion dollars in this "bail-out"?  I don't remember the votes being taken.  - -  SAFE director

Madison was right in his quote.  I also agree that once a program gets launched, there is no looking back no matter which party is in power.  - -  Retired financial executive

I don't know how the government will dig itself out of this.  They are trying to bail everyone out who comes with their hands out.  Bankruptcy may come much quicker than we had anticipated.   - -  SAFE director

You should get the “decrease spending” message out and tell your members to vote for John McCain. Obama will spend us out of social security!   - -   Sound reproduction engineer

Thanks for the comment.  We can't do what you suggest, as a Section 501(c)(3) organization, but we have been and will continue to hammer home the message that this country needs smaller, more-focused, less costly government.  Hopefully, the voters will take the point to heart and make a wise choice.

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Great article. By the way, on CNBC the next morning Warren, Pete, Bill Novelli (AARP) and I all agreed on two things. First, we must focus more on the future. Second, we need a capable, credible and bipartisan Fiscal Future Commission.  - -  David Walker

Your blog synopsis and critique is good, and I will recommend it to some people who I have been trying to explain the film and topic too.  - -  Financial executive

Just back from Tokyo, thanks for the heads-up.  In fact, Quad Cinema and Regal E-Walk 13 will both be screening IOUSA in New York the next few weeks, so it should have a wider audience.  I plan to see it at QC soon.  - -  Asia/Pacific consultant/author

Since one of the objections to nuclear power is the question of what to do with the waste, where do France and other European countries dispose of their waste?  --  SAFE member

This question will be addressed in next week’s entry.

The AEC was replaced by the Nuclear Regulatory Commission or NRC: it is probably housed in Energy but may have been independent before Energy was created.  --  SAFE member

Our description was oversimplified, and it has now been corrected. The former Atomic Energy Commission (AEC) had oversight over all nuclear programs, both military and commercial. The NRC was formed in 1974 to regulate the commercial operations, while oversight over military programs and the promotion of nuclear power was transferred to other agencies (which became part of the Department of Energy when formed in 1977).

I appreciate your comments about Budget Hero and have forwarded them to the game's production staff.  --  Public Relations Manager, American Public Media

 I remember playing a "game" like this a few years ago that was put out by AP. In that version, you had to win over enough legislators to pass the budget. Needless to say, you couldn't cut a thing and still get enough support to pass a budget. I thought it was very heavily tilted toward "big government."  --  Director of Government Affairs, National Taxpayer’s Union

Treatment courts sound very good; I had never heard of them.  --  SAFE member

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The only error I saw was that the “hockey stick” restatement of historical temperature data was proposed by a professor at Penn State University rather than the University of Oklahoma.  --  Dr. David Legates

(The reference has been corrected.)

I always believed that our gas prices were the result of speculators taking advantage of a difficult energy environment. The supply and demand has not changed as much as the increase in the price of a barrel of oil in the last year. What does global warming have to do with this?  --  Attorney, Florida

We are not sure how the change in supply and demand can be measured quantitatively, but at a certain point unmet demand will force prices up very sharply until a balance is reached.

Meaty is right!  Will read this more in depth when I get a chance, but I hope SAFE is emailing these links  to senators and representatives  as they are updated weekly.  --  Technology consultant

This entry drew some encouraging responses, but no suggestions for the next issue on how to make the sale.  Please be thinking about that part, folks, because being right is only half the battle.

Yes, we have a terrible fiscal problem hanging over us, and I like your solution for social security. The rising medical costs are a continuing problem, but maybe the next president will try to get those in hand.  And how about all the debt for the Iraq war! --  Family connection

A lot of good info and insight re the topics.  --  Financial manager

Excellent! Comprehensive. Shows a lot of effort.  --  SAFE member

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SAFE member comment: As to individual coverage, did you consider the idea of having funds made available that are the person's own money to the extent that he does not use all dollars in any year for healthcare costs?  That is an incentive to use only what is really needed while having funds to use where care is required.”

Our response: Such an arrangement, commonly referred to as a health savings account (HSA), offers considerable advantages over the “use it or lose it” plans that represent the current norm for healthcare insurance. Many people would appreciate being rewarded for staying healthy, and there would be greater incentive for younger workers in good health to sign up.

HSA coverage would predictably be more expensive than catastrophic loss coverage, however, because routine healthcare expenditures would be part of the package.  The decision involved would be somewhat analogous to choosing between “full life” and “term life” coverage.  People who liked the combination of insurance and forced saving with an HSA might be quite willing to pay the extra cost.

Great job!  I was somewhat concerned that Bill Moyers had not covered the moves announced by Pres. Bush.  

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I hope over the next 5-10 years, we can agree on a few solutions that will provide good healthcare at reasonable prices.  However, I don't think it will come from our Government.  No accountability!  --  Stockbroker

Somebody has got to think about improving the productivity of medical personnel and  procedures.  And it wouldn't hurt, in addition, to end billion-dollar rip-offs as in the case of United Health Care's CEO, reported several times in WSJ.  Whatever happened to dedication, serving mankind, reducing suffering -- the values communicated in medical schools?  --  Princeton alumnus

I agree with S-A-F-E that we want government out of healthcare.  It is an oxymoron to say that we cannot afford healthcare, as if healthcare were some service that comes with a set price which is either affordable or not. 

Healthcare is a consumer good like any other.  In a free market the public will purchase just as much healthcare as it wants, no more and no less, just as we do with housing, food, clothing, fuel, you-name-it.  --  Economic commentator

10/29/2007

In your blog, you wrote:

"Responsibilities" is not an accepted word, "guardians" would sound pompous, "white hats" is too breezy, etc. If any of our readers has suggestions, we would love to hear them!

How about "Visionaries"?....with an eye to the future, it fits with the aim of "Securing America's Future Economy."

7/26/2007