Charlie's One-year Plan

According to data from the World Bank, the 2010 Gross Domestic Product for the United States of America was 14.5824 trillion dollars. By the end of 2011 the national debt for the U.S.A. will roam in the neighborhood of $16.8 trillion. As you probably know, the GDP represents the value of every product and service generated in the country for that year. So, it is obvious that our debt exceeds the value of everything produced in our country by every company and person for an entire year. Clearly this is not an economically healthy situation unless you are a scofflaw who intends to default. There are numerous plans floating in the air that purport to deal with our abysmal debt situation so I thought….”Why not me?”

Every other plan that has been suggested has some glaring flaws. They may enter a “glide path” to solvency which means, in fact, more debt, increased spending and larger government. Even the golden-boy guru of the GOP, Paul Ryan, introduced a plan that includes all of those weaknesses. Senator Pat Toomey has the sanest approach from among the political class. His proposal would have generated a small surplus by the tenth year of its enactment. The profligate Senate with the uninspired leadership of Harry Reid voted to reject the Toomey measure. That figures. Why endorse a serious attempt to remedy the situation? It would be totally out of character for the “greatest deliberative body of the world,” and for a gaggle of 100 self-serving ego maniacs.

Charlie’ One-Year Plan

As with most plans that have some legitimacy, mine has more than one step. The first is to dedicate the entire national GDP to debt retirement for one year. This plan would include the shared sacrifice that President Obama continually demands because there would be NO resources for food, fuel and other staples available to any citizen, any resident or any visitor in the United States of America. So if we can tough it out for one complete year, we will have nearly enough money to pay off the entire debt. But wait, there’s more.

How do we operate the government if our entire production income is dedicated to debt you might ask? It’s simple. The first thing we do is categorize all government beneficiaries and recipients as “employees.” In one swift blow we have eliminated every entitlement, welfare and subsidy program in the federal portfolio. We then tax our new employees just like the government loves to tax everyone else, and we create a new revenue stream for operating the overgrown glob of government. Of course, we’ll need more money to pay our new “employees.” Isn’t it great that government works so well?

Annexing Canada would be the next logical step in my one-year plan to fiscal solvency. The Canadian GDP of $1.574 trillion would cover most of our essential government services. Our friendly neighbors to the north would have to share in our 52-week sacrifice because if we absorbed their entire national product, no one could eat, drive or participate in normal daily life. Everyone knows that a robust United States is oh so good for Canada’s well being so asking them to share in our mutual misery shouldn’t be too difficult. Obviously, our obligation to the environment and the health of the planet would require that we shut down Canadian oil production. That would have a negative impact on GDP so we must seek another source for generating the income to operate the government.

Invading Mexico may seem extreme at first blush, but it is the most logical piece of our fixit puzzle. There is an amazing symmetry to our invading Mexico because many of their citizens have been invading us for decades. Also by absorbing their GDP of $1.040 trillion, we may recover a portion of the funds that have been systematically sent to Mexican residents by their relatives in the United States. Again, we would prohibit petroleum extraction which would diminish the GDP significantly but the remainder would provide just enough with our previous amounts to fund the government.

Some might argue that my plan would lead to a starving and impoverished country after one year, but I would counter with “all the other plans would yield results that are similar and would take ten years! My plan would also eliminate most of the debt whereas ALL the other proposals increase it.” My plan provides the statist’s dream that the career politicians have been so diligently seeking. Only big government is funded, all energy production is eliminated and the people are totally dependent on government “compassion” and government jobs for their existence.

Satire, sarcasm and cynicism have been tools that I have used in the past, and I may have employed them again. It’s up to you to decide. The nature of your reactions or responses will determine for me the height of your discernment and the depth of your intellect. This one-year plan is as sensible and as realistic as the ones proposed by the career politicians….and the pain wouldn’t last so long.

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Channeling Nero

One of the great myths of Roman times is the one that claims Nero fiddled while Rome was burning. The Great Fire of Rome occurred in 64 A.D., the tenth year of Nero’s reign, and many historians believe that Nero started the conflagration because he wanted more land for a new palace. Nero ascended to the throne when he was seventeen, and in many respects was a hedonistic tyrant who took great pleasure in torturing Christians for sport. It seems to me that, in many respects, our career politicians in the United States are channeling Nero. They have adopted many of his imperial attitudes while claiming to represent the people.

Nero’s insatiable appetite for constructing grand buildings as monuments to his greatness can be seen as a parallel to our present day imperial politicians. Every state capitol and our nation’s capitol seem to be swarming with cranes, concrete trucks and other evidences of the building trades. These new edifices are often named for recent stars on the political stage that become immortalized even when their careers may not warrant acclaim. The building frenzy represents more than merely recognizing colleagues. It is an unmistakable symbol of the growing power and influence of the government. Just like Nero our political elites erect buildings to house the too-powerful bureaucracy and to memorialize their over-rated lives.

The hostility that our governments at all levels often exhibit against the Christian faith can be considered a mild version of Nero’s barbarism. The legislative bodies and the courts are particularly aggressive in their attempts to limit overt Christian expression from the public square. While they couch their pronouncements in language that speaks of neutrality and openness, the actual implementation of the ordinances, laws and rulings overwhelmingly deny Christian speech the same levels of tolerance as those enjoyed by other faiths. There appears to be an “overcompensation” attitude at work among the political class. Certainly, Christianity was a favored practice of faith in the early years of the republic and enjoyed a prominent role in public discourse. Even if religious preferences have changed in the United States, those who claim Christianity as their beacon of hope and faith continue to represent the majority of citizens. Dismissing them and their professions of faith from the public square is morally, constitutionally and politically wrong and unwise.

Nero was the last Emperor of his era. His suicide at age 31 in 68 A.D. foretold the coming collapse of the Roman Empire by illustrating the decay that had consumed the leaders of the Republic. Nero’s obsession with debauchery in some way reflects the expectations of our present class of political leadership. They enjoy better than average incomes, numerous beneficial perquisites, preferred treatment from the public and few demands for responsible behavior. Many of our political or bureaucratic leaders fail to fully pay their taxes or comply with other laws … laws that if a normal citizen were to violate them would result in hefty fines or perhaps prison. The notion of an imperial government has drifted down the centuries from fallen Rome to a staggering America.    

All governments if left unchecked drift into tyranny. They cannot resist the temptation to control the citizens’ lives and limit their options. Nero advanced his tyrannical schemes through terror whereas the United States’ government has implemented its tyrannical agenda through kindness or compassion. By convincing the electorate that massive regulation and control is “for our own good,” the government has massively increased its power and severely limited our liberty. Even now, when the oppressive nature of Big Government has become readily apparent, many citizens embrace the development because they seek “security” from either terrorists or the marketplace. For some inexplicable reason they are willing to place their trust and their lives in the hands of a government that has demonstrated time and again that it is incompetent and unreliable.

As we wrote above, many historians believe Nero started the Great Fire of Rome in 64 A.D., and the mythology accuses him of fiddling as the city turned to cinders. Today, our politicians are fiddling around by proposing solutions that don’t solve anything such as cutting $3-4 trillion in spending over the next ten years while adding from $10 trillion to $15 trillion to the debt during that same time period. If $14.5 trillion in debt represents a critical mass, why wouldn’t $25 trillion be more devastating to our national fiscal health? They are fiddling as the nation burns, and to extend the metaphor further, their irresponsibility is what has caused the problem in the beginning. Our illustrious career politicians have ignited the flames and are diddling and fiddling as we burn. When the Spaniards attacked Rome, Nero killed himself at the tender age of 31, but our self-serving political leaders have chosen to kill our nation instead. Despite his many flaws and warped character, Nero’s solution was the more honorable one.

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Out Years, Doubt Years

Whenever you watch the career politicians address a spending issue such as we are facing at the current time, they propose a “glide path” toward fiscal sanity. Invariably the majority of the necessary budget cuts are scheduled for the “out years”….the years beyond what a normal person would determine is prudent forecasting. For example, the Paul Ryan budget proposal has the budget achieving balance in ten years (9 “out years”), but with 9 consecutive years of deficit spending the Ryan proposal would leave a national debt of $24 billion in the 10^th year. His plan went further in the out years with a supposition assuming years 11 and forward would generate surpluses for reducing the debt. Welcome to Fantasy Island.

The “out years” are a figment of creative political imaginations. They are more appropriately called the “doubt years” because it’s doubtful that any of the projections and assumptions in the original legislation will ever occur. Historically, the later years in long term forecasts have always been worse than the authors anticipated. Some of the more recent examples are LBJ’s War on Poverty which has squandered more than $6 trillion through the years, and our poverty rate is similar to what it was when the programs were initiated. Medicare is another glaring miscalculation (or intentional misrepresentation) as the program has far exceeded the expected costs.

There are a number of reasons for out year projections to be so woefully wrong. One is that no one can predict the future with any degree of certainty. A second is that no Congress can bind succeeding Congresses to budgetary items. The new Congress can increase or decrease (rarely done) the line items for a program without being constrained by the original estimates. Also, Congresspersons rely on the rosiest estimates and outlandish assumptions when they sell their program to their colleagues and the public. Finally, they lie…misrepresent, mischaracterize, misstate. With all due respect to Congressman Ryan, his scenario is much too optimistic, but even if it were “on the money,” it fails to solve our debt problem. By the time that the debt is being addressed, our $25 trillion hole may be too large to escape.

Despite the inadequacy of Mr. Ryan’s plan, his is the best one on the table so far. Senator Pat Toomey has introduced one that has a much steeper glide path and takes us to balance much faster, but it hasn’t had any hearings in the Senate and is also too reliant on “out year” performance. Because our fearful government officials have been raiding the candy store and giving the candy away for so many years, the size of the debt, the consequences of the debt, and the payback of the debt have grown too large for a glide path strategy to significantly correct the situation. Plus, politicians are not disciplined enough for it to work. If the political elites are serious about correcting our abysmal financial situation (I don’t believe that very many of them are), the remedy will have to be sudden and painful. Presently, roughly 43% of our annual federal expenditures are financed with borrowed funds (deficit). It should be apparent that any glide path of any length will continue to add to our $14.5 trillion debt. In addition, the political wrangling over the budget and appropriations will become more intense during the out years as politicians seek to protect favorite programs and constituencies. The most effective solution may be a radical two-pronged approach that will create massive displacement and disruption but should ignite an economic boom that should ameliorate much of the agony.

At the risk of repeating myself, the best template for restoring fiscal sanity to our federal government is to begin with the enumerated powers in Article 1, Section 8 of the Constitution. Any other guide will fail because of emotional justifications for every program, agency and department in the federal system. Each of them represents a “good idea.” Every one of them addresses a “critical need. “ None of them are efficient or particularly effective, so the Constitutional formula would minimize debate about the efficacy or necessity for much of the deficit spending. A majority of Congress must be willing to fall on the hand grenade in order to pull our nation back from the brink of disaster. The “glide path” must be for two years…one House term because it is possible that the members with the courage to do the right thing will not be re-elected.

Those of us who believe in liberty, small Constitutional government and self-reliance must be willing and ready to suffer the concussion and absorb the shrapnel when the blast goes off. Who am I kidding? There are not enough politicians to take the heat and not enough citizens to absorb the shock. We’ll continue playing our games with our fragile future by kicking the can further down the road as the “out years” become the “doubt years.” Before too long the doubt will be replaced by dismal certainty. Reality is a cruel teacher.

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Default, Dear Brutus.

Default,” Dear Brutus, is not in our stars, but in ourselves, that we are underlings.” Shakespeare might be annoyed that I borrowed and corrupted his line from Julius Caesar, but he’s dead. “Default” is the power word of the week as statists scramble to coerce Congress into supporting an increase in the national debt ceiling limit. The dirty truth is that default is not a Constitutional option. Current monthly income for the federal government is just under $200 billion. The primary obligation for the Treasury is to pay the debt service first out of any collected proceeds. At current interest rates, the monthly cost for interest on the $14.4 trillion obligation is slightly less than $30 billion. In addition, the secondary Constitutional obligation is payment of Social Security benefits due to the hypothetical, mythical “trust fund.” Those payments run about $60 billion. It is clear, therefore, that the two Constitutionally-mandated disbursements will leave a balance of roughly $110 billion in the Treasury for prioritizing other outlays and payments such as military pay and civilian work-force payroll. The threats of impending doom, and starving grannies are gross misrepresentations…..lies.

If, for any reason, Obama or Geithner delay the Constitutionally-required disbursements for political purposes, they will be in contempt and should be subject to impeachment. Whatever they choose to do, legal or otherwise, the debt ceiling is a two-edged sword for the nation. While it is true that federal cash flow is sufficient to satisfy Constitutional and legal requirements, the massive size of the debt makes it politically difficult to lower taxes enough to generate an economic boom. Some will continue to argue that taxes must remain at present levels (or even higher) to raise funds for debt retirement. Given the history of debt service in the United States, this may be a bogus argument driven primarily by ideological considerations. No principle payments have been applied to the national debt for 51 years, so it seems rather remote that the government would feel compelled to pay down the outstanding balance. Certainly debt retirement would be beneficial for the fiscal health of the country because every uptick in interest rates would require billions of dollars more from the budget.

The debt ceiling and the debt itself are constraining in another way. It may create an artificial endorsement of the status quo on the spending side of the ledger. The political class may perceive the debt limit as defining the outer parameters of the spending matrix. They may convince themselves that as long as they stay within the defined limit, their appropriations are justified and defensible…no matter what the value, constitutionality or justification for a particular program or line item may be. A similar concern is that with the artifice of the debt ceiling in place, career politicians will be continually seeking to increase or looking for ways to circumvent it. Pet programs represent political promises for favored constituent groups. The political class will be fearful of returning the government to its Constitutional structure. They will fear the retribution of recipient groups who have become accustomed to government benefits. Concurrent with addressing the debt crisis and drastically reducing federal spending, the nation, people and politicians, must unite for the “weaning of America.” We must insist and enable the drying of the Nanny teat.

The kabuki dance that is taking place in Washington at this time is merely a small beginning toward what must be done. Systematic and reasonable spending reductions must be implemented to prevent a repeat of the current fiasco. The cuts should be vertical reductions with entire departments, programs and agencies being eliminated. Horizontal cuts are easier because they will not generate the furious responses of the affected agencies and their constituencies, but they are not effective and enduring. Merely shaving dollars from the top of every aspect of government leaves the monstrous apparatus in place to fight for restoration of money in the next and all subsequent budgets. It might be useful (and proper) for Congress to become familiar with the enumerated powers in Article 1, Section 8 of the Constitution of the United States. Even if they ignore their legal limits, they may at least attempt to fund only governmental functions that are relatively close to meeting Constitutional muster. I can hope, can’t I? We the people should commit to allowing some favorite programs to be cast aside if we are to work our way out of this fiscal maze. Now is the time for that “shared sacrifice” that the progressive-statists are so fond of demanding. Every American must be willing to sacrifice some program or agency on the altar of budgetary sanity and economic reality. Shared sacrifice, indeed, but I suspect the lefty crowd will battle openly…and underhandedly every attempt to restore order to our nation’s financial chaos.

Our situation is dire. Personally, I’m unconcerned if the Chinese pass us as the preeminent economic power in the world. It suggests that their billions of people may be on the cusp of experiencing some semblance of individual liberty. I do desire that we put our fiscal house in order so that liberty and prosperity will be available for all of our people. Default, dear Brutus, can be brutal. Correction will be politically, economically and socially disruptive. Each of us must be dedicated to the task. Et tu?

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The Prince and the Paupers

As the President was addressing the nation (or the tiny audience that watched) yesterday, I found that my reaction was as predictable as his rhetoric. I do not believe that he is aware that the “all men are created equal” society of the United States has different expectations for our leaders than Kenyans have for their historic royalty. Vague royal pronouncements from the Prince do not allay the concerns and worries of the people. They sense that he is transforming them into paupers. After all, he does take pride in his transformational presidency. When the nation is wallowing in absolute insolvency, he can call another press conference and claim “Mission Accomplished.”

Obama used a term during his address that I found staggering for its effrontery. He claimed that part of his deficit reduction plan would be to save a trillion dollars through spending reductions in the tax code. That little term provides a picture window insight into the real attitudes and ideology of the poseur. The implication of the statement is that all money belongs to the government, and any portion of it that the people are permitted to keep is an expenditure…spending. So, the imperial prince of mendacity has determined that the government should cut spending by raising taxes. He wants more money from taxpayers so that he doesn’t have to curtail the goody packages that he hands to his most loyal supporters.

El Presidente’ delivered a laundry list of pandering programs that he asserted were national priorities. Perhaps they are national priorities in his elitist statist mind, but a thorough examination of Article I, Section 8 of the Constitution of the United States reveals no evidence of the existence of any of those programs or goals. Not there. Not constitutional. Perhaps they are worthy. Maybe they are good for the country, but they are not constitutionally mandated or allowed. Nearly every president in our short history has overstepped the bounds of the constitutional limitations. In 1794 a group of western farmers objected to higher excise taxes on whiskey (to pay down the national debt) and resisted. President Washington sent the militia to force their compliance with the offensive tax. Congress has not been immune from blatantly violating their constitutional constraints. Every time some bubble headed legislator has an idea, they manage to further infringe on the rights of the people. So, Obama is not unique, but his sheer audacity and casual disregard, perhaps even contempt, of the constitution is breathtaking and ominous.

Given the willingness of both parties of Congress to cavalierly violate the Constitution and the natural rights of the people, we cannot expect them to suddenly acquire a constitutional conscience. Congress is complicit in the lawbreaking frenzy. Congressmen and Congresswomen believe that their intellects and their compassion are superior to ours; therefore they believe they are obligated to protect us from ourselves. Who, pray tell, will protect us from them? So, in the current environment where the President wishes to raise taxes and promise token reductions in federal spending as we speed towards fiscal collapse, the Congress will provide minimal resistance. They will engage in high sounding rhetoric and predictions of woe (truthfully, for once), but in the end they will hop on board the President’s fast track to failure. It is not coincidental that as the needs of the people increase, and the government lurches to supply them, the people’s abilities and capabilities to solve their own problems diminish. Feed the wolf on a regular basis, and he will forget how to hunt. Government programs have coddled us to the point that our survival as individuals and as a nation will be problematic if the system would collapse.

As we circle back to the President’s address and its underlying philosophy, my pessimistic assessment is that on April 13^th, 2011 at approximately 1:45pm EDT, Barrack Hussein Obama delivered a suicide note for the United States of America. Congressman Paul Ryan responded with a statement that was equivalent to insisting that the President postpone the evil deed for a day or two. Under both scenarios we die. One lingers more than the other. Sometimes politicians believe that they are god-like. Apparently they are because they control the life and death of a great nation, and, it seems they choose death.

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