What were three men with FDR emblazoned on their T-shirts doing at a FreedomWorks event? FreedomWorks is an activist organization that is partnered with tea party groups across the country. FDR is hardly an icon of the right.
Franklin Delano Roosevelt
To hear the progressives talk about the public sector unions in Wisconsin and other locales you would think collective bargaining was enshrined in the Bill of Rights. We have a right to bargain collectively. The unions are fighting for their rights. The Bill of Rights was won through the fighting of a bloody revolution. The right for all citizens to vote was won through the passage of an amendment to the Constitution. So, naturally, the right of public sector unions was won through a similar groundswell of popular support, right? No. Actually it was started by one man, fighting for his political life, in the shadow of Tammany Hall.
The public sector unions have succeeded. They have been so successful they are on the verge of bankrupting the country. Like the private sector unions, who at one time were a key advocate for unskilled and semi-skilled workers, they don’t know when to declare victory and go home.
The 26th annual Martin Luther King, Jr. National Holiday celebration sponsored by the Congress of Racial Equality (CORE) held at the New York Sheraton last night was a remarkable event in the midst of all the babble about discourse and civility. Of course it was civil; it would not be any other way, but considering the venom that has flowed in the past year with charges from racism during the health care debate to causing the Tucson shootings it struck a very different and positive tone.
You don’t have to go too far to find a story about people suffering in these tough economic times, and your heart goes out to them. Some have lost houses, are living in cars, really tough stuff. But there is another story under the surface that reflects common attitudes developed growing up in the nanny state kicked into high gear by Franklin Delano Roosevelt.
In the midst of these tough economic times, instead of getting out of the way by cutting taxes and red tape, the Obama administration is focused on piling on more government programs. Worthless stimulus packages, health care reform, and efforts to push cap and trade have not moved the unemployment needle a whit. They extend unemployment benefits and keep whistling past the graveyard hoping they won’t get swallowed up.
Personal Responsibility
Since the Great Depression and the growth of the nanny state, more and more people have bought into the myth that the government can provide all, and our responsibility is to enjoy the ride. An article in today’s New York Times writes about people benefitting from a government program to keep them in their houses if they face becoming homeless. But there are some subtleties in the hard luck stories that give me pause.
There is the case of Antonio Moore who lost his job as a mortgage consultant that paid him $75,000 per year. He lost his 3-bedroom house with a Jacuzzi and his Lexus sedan. He is now faced with eviction from his apartment. The article doesn’t go into details, but in most cases you don’t lose your house and car if they are all paid for. Again, it doesn’t say if Mr. Moore bought his car new or used, but when I think of a car like a Lexus I usually don’t think that fitting in the budget of someone making $75,000 living in the San Francisco Bay area. Had Mr. Moore purchased a Toyota Corolla instead of the Lexus would he be in better shape? Again, I don’t know the details. I am just wondering.
Then there is the case of Dawn Martin.
Ms. Martin is mortified to be asking for help. She grew up wealthy, with vacations spent on Caribbean cruises. “I had everything I ever wanted,” she says.
She and her husband have a painting business that until 2008 was grossing $100,000 per year, but in this tough economy it dropped to $38,000. That’s hard. But then here is the between the lines story:
Her father has money to help if it really comes down to it, she acknowledges.
“I don’t see him letting his grandkids land on the street,” she says, “but he’d hold it over our heads for a long time. That would lower me to a level that I wouldn’t want to go.”
So she is here, at Samaritan House, filling out the paperwork for the homeless prevention program.
So because of her pride, she turns to your family and mine, through higher taxes to fund a government program, to help her through her rough spot before she will turn to her own family. But don’t worry. When our money is gone, she will turn to Dad. The painting business is picking up so Ms. Martin is confident they will be able to sustain themselves. She is able to take our money to tide her over and still maintain her pride.
But what did Ms. Martin learn about money when “growing up wealthy”? Is Dad responsible for not teaching her or was she a rebellious child who ignored him and perhaps that is why he would hold it over her head for a long time. Will she do something different this time around or hope for another government program?
Perhaps I was a little torqued before reading this story by another in the Wall Street Journal that wrote about the homes underlying the Goldman Sachs fraud case. This article talks about a Ms. Onyeukwu, a 43-year old nursing home assistant with pre-tax income of $9,000 per month. She is having trouble paying her $688,000 mortgage at $5,000 per month which is 56% of her pre-tax income. Her solution? Refinance it with a $786,250 mortgage. But hey, the interest rate is lower so her payments of $5,000 per month will stay the same. What is she thinking? I could be way off base here but I’ll bet she could get a nice apartment for significantly less than $5,000 per month. Sell the house, live within your means.
Government as Savior or Government as Pusher?
This is a tale of two government programs and personal responsibility. We had or still have a massive government program that uses threats, goals, and sleight of hand to help millions achieve the American dream of home ownership. This is not through thrift, like our parents did it, but by the government threatening banks with charges of racism (there’s the race card again) if the banks didn’t lower their lending standards. As the housing market took off, the feeding frenzy intensified and everyone was trying to buy houses or finance them with less and less money down. The Community Reinvestment Act, HUD, Fannie Mae, Freddie Mac were all players in this debacle, but don’t expect our elected officials to wade into that swamp to see what happened. No, they will pile the blame on the banks and Wall Street, while they take Wall Street’s massive donations and do nothing but pass meaningless “reform legislation”. Now we need new government programs to keep these people hanging on. How similar is this to the drug pusher who gives you your first hit for free to get you hooked and dependent on them forever.
What About Personal Responsibility?
Unlike the people in the articles, I believe I have responsibility first and foremost for my actions. If I need help beyond myself I turn to my family and then the charity of my church. I believe many conservatives share my views, which is why on average conservatives give 30% more to charities than liberals. It is why I gave the moniker “Buck a Day Biden” to Vice President Joe Biden because in his financial disclosure forms he reported give only about $300 a year to charity. Here is a man who has been drawing six figure salaries from the taxpayers for years, is a millionaire, but will not reach very deep into his own pocket to help his fellow man, but has no problem reaching into your pocket and mine to create some government program to give your tax dollars to someone else.
There is a man named Dave Ramsey, who was a millionaire in his mid-twenties but later lost it all and declared bankruptcy. He now teaches others how to live without debt and take responsibility for their financial lives. It is a lesson all of us should learn and if we do, I’ll have to find something else to write about that sets me off. But in the mean time we have a lot of work to do. First we have to stop the federal government’s runaway train. Next, we have to shrink government. Then we have to go back to being responsible for ourselves and wean ourselves off the government.
When will our President come to the realization that the government does not have any money save that which is provided by its citizens? If he understood that, he wouldn’t have said this:
“Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century,” Mr. Obama said at the White House.
Let me posit a translation: we shouldn’t borrow against our children’s future, so we should borrow against our children’s future. And let me add another pet peeve and that is how the statists have redefined the word “invest”. What they really mean is spend, but invest sounds so much more grown up. However, most intelligent people understand invest to mean when you put your money into something with the belief you will get all your money back plus a premium. You don’t invest in the stock market with the idea you will never see your money again and will subsequently put more money into it next year. You invest in a house with the idea that you will sell it later for more money. You don’t invest in a house if you expect it to go down in value. But our elected representatives would have you believe that pouring money down a rat hole is an investment.
Immature and Irresponsible
Like a child caught standing over his mother’s prized china lying shattered on the floor, President Obama wants us to believe it’s not his fault, no, we are going to have trillion dollar plus deficits for the next ten years because of Bush and the Republicans. He is one year into his presidency. This is his budget, not Bush’s. If he can’t handle the job he should resign and turn it over to, er, Biden? Check that. Perhaps he can just go watch television in the White House for the next three years and leave the rest of us alone. Doing nothing would cause less damage than what he has planned. He jacked up spending 24% and then “courageously” instituted a freeze on that spending for three years. Think about it. If I gave you a 24% raise on Monday and then came back on Friday and said, “Gee, I’m really sorry to have to do this, but times are really tough. I’m going to have to freeze your new salary for the next three years. Can you ever forgive me?” Could you not burst out laughing?
We’re Going to Make Some Tough Decisions…Next Year
We are in a fiscal crisis, but don’t think for a moment you are going to see any tough decisions in an election year, particularly when so many Democrats are in danger of having to find jobs in the real world. So this year is tough talk. Next year we get busy!
Democrats or Republicans or maybe the Tea Party movement is going to have to act, sooner rather than later. Here is how the federal government breaks down:
- Medicare and Medicaid — 33%
- Social Security — 21%
- Interest on the Debt — 8%
- Defense — 20%
- Non-Defense Discretionary — 18%
The first three items continue to grow with no signs of slowing and interest will really take off when the Fed stops the easy money program. Defense can shrink as Iraq and Afghanistan stabilize, but not a lot as this is still job number one for the federal government. So do you see the problem? You can thank Democratic President Lyndon Baines Johnson for the first ticking time bomb above. You can thank Democratic President Franklin Delano Roosevelt for the second ticking time bomb. You can now thank President Barack Obama for what is becoming the third ticking time bomb and that is without his Health Care, and Cap and Trade.
So how is President Obama going to “solve” this problem? By tinkering with the last item, Non-Defense Discretionary spending. But don’t worry, he will also tax those evil rich and make sure they pay their fair share. But before he goes too far down that path I have a suggestion for him:
- Listen closely to the Beatles song “Taxman“
- Ask yourself why the members of the band moved to the United States?
High tax states like New York and California are finding that a significant number of their wealthy citizenry are moving to lower tax states, exacerbating those states’ fiscal problems. If you look at the percentage of the population that pays the lion’s share of the taxes you will quickly see that if a relatively small percentage of the population, who can afford to live anywhere, actually decide to leave the United States of Tax the Rich, the resulting fiscal problem will be very, very severe. Obama can only poke his tax stick in that cage so long before he gets a nasty reaction.
We’re All Standing On the Third Rail
Social Security has been called the third rail of politics, but the reality is that we are all standing on the third rail trying to keep our balance and if anyone slips and touches the ground, we’re all fried. We have to suck up the courage to address Social Security, Medicare, and Medicaid. If we can’t slow the growth of these programs so that they take a smaller amount of the budget pie each year, we are toast. None of those programs is in the Constitution, but the liberals/progressives created them with empty promises of benefits without costs. This should have been the first clue:
“Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.”
Ida May Fuller was the first recipient of monthly S.S. checks when she retired in 1940. She lived to be 100.
She almost got paid back in full with her first check. She got 926 times more than what she paid in. That’s a 92,600% return on “investment.” Not bad, huh?
She got back almost everything she paid in with her first check. Instead of ringing alarm bells all over the country, politicians patted themselves on the back for the great system they created. We sent Bernie Madoff to jail, why should Congress be exempt? What Bernie Madoff did was child’s play in comparison. Where he fell short was that he couldn’t force people to participate through payroll taxes, and he couldn’t print money. So why is what he did criminal and what Congress is doing not? He had to get his participants to voluntarily turn over their money. He promised returns of 40% per year. Ida may got 92,600% return on her investment.
Burn the Ships
There is the story of a general who landed on a beach to face an formidable enemy. He ordered that the ships that brought them there be burned. By doing so, he knew his men would fight ferociously because there was no escape, either they fought to win or they died. Perhaps we should do the same with Congress and President Obama. Fix Social Security and Medicare/Medicaid or you join Bernie Madoff in Cell Block “C”, for running a massive Ponzi scheme. What has kept Congress from fixing this in the past is the fear of not getting reelected. Let’s raise the stakes so that not getting reelected would pale in comparison to incarceration. It’s time our elected officials started paying attention to the people and not their perks. The disaster train is going downhill and picking up speed, headed for a cliff. It’s time ALL politicians put the country first and fixed this problem that, after all, they created. It’s fun to give out the goodies, but this is a crisis that cannot be shunned. It must be dealt with head on.
