Newsletter 45

Number 45

SAFE

Secure America's Future Economy

Spring 2007

Last issue, we featured the new SAFE letter to the editor campaign, advocating elimination of federal government grants. The first step toward making such a significant change is to advocate the change, and we have chosen to take that step. Your Directors have carried the ball, and we ask you to do just one thing to help. We ask you to send one letter to the editor on that subject. To make it easy, you can use a letter that is already written. Four are in the previous (Winter) newsletter and more are on s-a-f-e.org.

If you are outside of Delaware, feel free to use a letter “as is”. Inside of Delaware, please make changes, especially at the beginning of the letter. You may even want to use part of different letters.

Please do this. The more such letters appear, the greater the chance that they will be the start of something good. Federal grants totaling almost $500 billion are a huge part of federal spending, and huge cuts are needed to correct the irresponsible failure of Congress to address the baby boomer problem.

We are pleased to note the March 14^th appearance on “60 Minutes” (CBS) of David Walker, the U.S. Comptroller General. Walker has been working with the Concord Coalition to alert U.S. Citizens of the seriousness of the baby boomer problem. He made good use of his appearance on 60 Minutes to explain the seriousness of the problem to millions of Americans. Walker said that the new prescription drug program will add $8 trillion to the long term cost that young U.S. taxpayers will be expected to pay.

That statement prompted one of our members to submit a letter to three large newspapers proposing repeal of the prescription drug program. The letter has not yet been published, and our Board of Directors has not decided for or against support of this proposal. For your information, this letter is included at the end of this newsletter.

We know that the Congress has been irresponsible by not addressing the baby boomer problem. We know that the longer the Congress continues to avoid making the hard choices that are needed, the greater the chance of a financial crisis. The Comptroller General, David Walker, knows much more. Here is some of what he included in “Saving Our Future”, a great column in “Government Waste Watch”, a publication of Citizens Against Government Waste.

1. Four deficits have serious implications for our future standard of living and national security. They are federal budget deficit, savings deficit, balance-of-payments deficit and leadership deficit.

2. “Our greatest source of savings will come from bold, decisive efforts to transform what the federal government does and how it does business.” (SAFE certainly agrees. We propose elimination of federal government grants, in accordance with the Tenth Amendment to the Constitution).

3. The Federal budget deficit was $248 billion in 2006, but the operating and accrual deficit was much more (we guess this means taking into account promises of future benefits).

4. Estimated future taxpayer burden went from $20 trillion in 2000 to $50 trillion in 2006. That comes to $435,000 per household.

5. Entitlement reform is especially urgent because Social Security, Medicare and Medicaid are on track to consume all the federal revenue.

6. Australia and New Zealand have made the tough choices, and dealt with their overburdened and underfunded pension and health care programs.

In a January-February 2007 AARP publication, the article “Easy Money” has the sub-heading, “Index funds provide a simpler, safer way to reap the big returns that stocks offer long-term investors”.

The article makes a very good point. When you don’t pay a mutual fund to try to beat the market, the cost goes way down. The article quotes 0.18% per year for the Vanguard fund which replicates the return of the S&P 500 Index.

But wait. Do you remember the AARP propaganda, calling Personal Retirement Accounts risky? For long-term investments, the risk is minimal. It looks like AARP is wedded to the idea of government control, and concerned that Personal Retirement Accounts might lead to a decrease in the role of Social Security. Index Funds are a good idea. Personal Retirement Accounts are also a good idea. They offer ownership, inheritability and choice.

The SAFE mission is to protect the future for the next generations. A major effort in this mission is promotion of cutting spending by the federal government to decrease the risk of a financial disaster. I maintain that a change in our foreign policy should be a part of our promotion of cutting spending.

Foreign policy and military spending are closely linked. The present interventionist foreign policy requires a large military establishment. A much smaller and less expensive military establishment is sufficient with a non-intervention foreign policy.

Switching to a non-intervention foreign policy will result in a large spending decrease and will have other benefits. It will make the world friendlier, make us safer, and save lives of our young people in the military.

George Washington: “The great rule of conduct for is, in regard to foreign nations, is in extending our commercial relations, to have with them as little political connection as possible.”

Thomas Jefferson: “Peace, commerce, and honest friendship with all nations-entangling alliances with none.”

Scientist Arthur Robinson, who works on life extension, has outlined a very different approach to health care (Journal of American Physicians and Surgeons, Volume 12, no. 1, Spring 2007). The approach would involve individual’s use of analytical devices to monitor their own health.

Heartbeat patterns and chemicals in breath and urine differ for different persons. Individual monitoring of such parameters can identify changes which act as early warning systems.

Problems will be identified early so they can be addressed before they do much harm. Using internet services, individuals will be able to diagnose their own problems. According to Robinson, “medicine will be reduced to a service industry competing on the basis of quality and price, with consequently far higher quality and much lower prices.” With this approach, individuals could evaluate effects of drugs, vitamins, and lifestyle changes.

Robinson’s vision can be taken seriously. He is President and Research Professor of the Oregon Institute of Science and Medicine, where highly scientific work is done on human health.

The Robinson approach may well be adapted in the long run, but we should assume that the present system will be in place long enough to be the major contributor to the financial risk that we are trying to minimize.

Prescription drugs are a net benefit. They can prolong life or increase the quality of life. They can also do harm. There are reportedly 100,000 deaths per year from use of prescription drugs. Many are undoubtedly due to misuse of the drugs and many due to bad side effects. Because of individual differences, a drug might be beneficial to most users but harmful for a few.

There can be bad side effects for some users due to interactions between drugs. This means that certain drugs should not be taken together, or not be taken within too short a time period. Such interactions could apply to pairs of drugs (2-way), combinations of three different drugs (3-way), etc.

Here is some arithmetic: If you are taking five different kinds of drugs, there are 10, 2-way interactions, 10, 3-way interactions, 5, 4-way interactions and 1, 5-way interaction. The preponderance of such interactions will be approximately zero. However, prudence would indicate that if you take multiple kinds of drugs, you should question whether they are all necessary. If the answer is “yes”, it might be worth the trouble to space them out. Ask your doctor and use your common sense.

The federal government is headed for a financial disaster, and members of Congress seem to know it. Even so, Congress continues to add to the already huge federal debt and the baby boomers are about to start retiring. David Walker, the U.S. Comptroller General, told us March 24^th on CBS “60 Minutes” that Medicare and Medicaid will be five times as big a problem as Social Security. He also said addition of the new prescription drug program will add $8 trillion to the cost that young taxpayers will be expected to pay.

Without drastic action now, we can expect a financial disaster and a much lower standard of living for the next generations. Maybe even a breakdown of public order – who knows?

A serious problem requires a serious solution. Why not repeal the prescription drug program, as a start? We older Americans, who have allowed this mess to develop, should not leave all of the mess for younger Americans to clean up.

But how about those Americans who have to “choose between their drugs and their food”? We should leave that question to the individual states.

Historians may look back and say that the prescription drug program was the worst mistake of the U.S. Government in the 21^st Century. Let’s hope they can say that American citizens corrected that mistake.

FAREWELL TO DICK REESE

We miss SAFE member Dick Reese, who died March 10^th. He had been a Director, and used his expertise as an artist to improve the layout of this newsletter. Sadly, there will be no more “Tid Bits from Dick Reese” for this newsletter. Dick was one of a kind, and we are richer for having known him.

SAFE President Bill Whipple and Director Steve McClain will attend the National Taxpayers Conference June 14-16, Washington D.C. We hope to get some good ideas for increasing SAFE effectiveness, gain a few members, and possibly give some worthwhile ideas to others.

David Walker, U.S. Comptroller General has written “Saving Our Future”, an excellent two-page Guest Column for “Government Waste Watch”, published by Citizens against Government Waste. We’ll send a copy on request from SAFE members.

We still have copies of Maurice McTigues talk “Rolling Back Government: Lessons From New Zealand”, and will send you a copy if you like.

When you are in a hole, stop digging. Tell Congress to get serious about cutting spending.

We’ve told you before, but just in case. For a cheap way to increase the chances of saving frozen food during a power outage, do this: Using a plastic juice jar, fill 5% with salt, and bring to 95% with water. Put in your freezer. As temperature rises, the salt ice will absorb heat when melting at below 32F.

Things to do	Health Care: Long term hope
Downsizing Government	Prescription Drug Downsides
Comptroller General Knows	Repeal Prescription Drug Program
AARP Gets Real	Farewell To Dick Reese
Foreign Policy & Generational Fairness	Miscellaneous Advice and More

Close