In the short time that the Republicans have unveiled their new pledge, the commentary from the left has been more than amusing. President Obama calls it “irresponsible.” A writer for Newsweek Magazine says it is “unlikely to inspire.” A writer for the Huffington Post claims that the pledge was written by a lobbyist working for House Minority Leader, John Boehner, who lobbied on behalf of large corporate conglomerates such as AIG, Pfizer and Exxon. Shame on all of you who think I don’t read left-wing publications with interest!
Have you grown tired of nonsense being countered with more nonsense? President Obama’s entire presidency has been more than irresponsible; therefore, he should be the last person to use this term. This administration’s absurd economic policy, which just so happens to be an expansion of George W. Bush’s economic policies (what Obama now decides to call irresponsible), along with their insistence on ramming through VERY unpopular legislation doesn’t even make a dent in defining their irresponsibility. The column in Newsweek had a few points in between countering rhetoric with more rhetoric. As for the claim in the Huffington Post, it might be true. However, there’s a great deal of hypocrisy in not reporting on the lobbyists who wrote the healthcare reform bill, the cap and trade bill, the financial reform bills and the economic stimulus packages. Where was the outrage when this legislation passed (with the exception of the cap and trade bill that never made it)? Where was the outrage when President Obama filled his cabinet with lobbyists, after talking about cracking down on lobbyists? If the writer acknowledges the problem of the Washington lobby and is outraged by its influence, then why be so one-sided when calling it out? The truth is partisan loyalty trumps the writer’s alleged concern, and that’s why America is in dire economic straits.
Countering nonsense with more nonsense and empty rhetoric that rallies a political base has always been the way of politics; however, this method has become dangerously dominant over the past decade. If you wish to read an honest, in depth analysis of why I think the GOP’s pledge is a very poorly written document, then make yourself a “cuppa” tea (or coffee), sit back and grant me a small fraction of your time while I attempt to summarize and analyze the GOP’s 40+ page pledge.
Folks can make up their own mind over whether or not the rhetoric in the first 13 pages is exciting. That record has been played over and over before every election cycle. I’ve already memorized the lyrics; therefore, I wasn’t deeply moved. It’s basically the same talking points – different election. This column will focus specifically on their game plan.
Part I: “A Plan to Create Jobs, End Economic Uncertainty and Make America More Competitive.”
Catchy isn’t it? The title itself is an oxymoron because the government CANNOT put together a plan to create jobs, end economic uncertainty and make America more competitive because the government is the reason why there are no jobs, America is losing its competitive edge and economic uncertainty exists! I had a small glimmer of hope that the very first sentence on page 14 would inform the readers of this “minor” detail; however readers had to go through an entire page of more rhetoric before getting to any kind of specifics. A noteworthy talking point that stood out was the following:
“It is time to end this liberal Keynesian experiment and stop the attacks on our employers that prevent them from investing in our economy. We need private sector jobs, not more government.”
All right, everyone put the pom poms down, and let’s take a walk down memory lane. I wasn’t aware that the “liberal Keynesian experiment” began AFTER Obama was elected. Where is the apology from the GOP establishment for enacting “liberal Keynesian” policies all through George W. Bush’s presidency? From the two failed stimulus packages that Bush signed into law, to the bailouts (defended by Bush going on national television stating that America had to “abandon the free market to save it,” to touting the expansion of Fannie Mae and Freddie Mac (PRIOR to his reversal of his position in 2003), to doubling the size of our national debt, to the late Senator Ted Stevens’ comment about “earmarking our way to a supermajority” to making the federal income tax code even more top heavy…all REEK of Keynesian polices. I’ll never understand the left’s pure hatred of George W. Bush. His economic policies were mostly in line with left-wing economic ideology. The larger point here is that economically astute voters have not forgotten about the GOP’s sudden economic dementia that occurs when the party is the majority in government.
Now before people say “it’s time to let go of the past because they have learned their lesson,” let’s get into the specifics of their plan.
The GOP has vowed to stop ALL tax hikes that are set to take place once the Bush tax cuts expire. How nice of them to let people continue to be overtaxed! Nowhere in this plan is there a repeal of the corporate income tax – a tax that is paid solely by CONSUMERS. It may be a bit of a stretch to promise repeal of the income tax all together in favor of a consumption tax such as the “Fair Tax;” however, it is more than disappointing that there wasn’t even a promise of serious debate and education on this topic.
Next is a plan to “Rein in the Red Tape Factory in Washington, DC.” The plan states the following: “To provide stability, we will require congressional approval of any new federal regulation that has an annual cost to our economy of $100 million or more. This is the threshold at which the government deems a regulation ‘economically significant.’ If a regulation is so ‘significant’ and costly that it may harm job creation, Congress should vote on it first.”
I can’t tell if there is an attempt at humor here or if these people are really serious. First of all, ANY regulation that is unnecessary HARMS job creation, so why even write it let alone vote on it?! Why the $100 million cap? Is regulation that costs less than $100 million any less burdensome on small businesses? Some of the small businesses they claim they are trying to protect do not have a market cap of $100 million! Excessive government regulation not only impairs job growth but also STRENGTHENS the bond between big business and government. Since “corporatism” is often confused with “free market capitalism,” why not take the time to educate the public about the difference? Perhaps the answer to this question is that this pledge was written by lobbyists who have no interest in a free market economy that would effectively diminish their power.
Last on the GOP’s “jobs plan” is the promise to take action to “Repeal Job-Killing Small Business Mandates.” Finally there is something in which I agree. Since our elected officials didn’t bother reading the health care legislation, they did not come across a mandate in the bill that requires businesses to report to the Internal Revenue Service any purchases that run more than $600. I cannot fathom the cost of compliance for such idiocy nor can I fathom that the IRS will be able to sift through the enormous amount of paperwork to catch all of this alleged unreported income.
In summary, this plan doesn’t even scratch the surface in what needs to be done to turn America’s economy around. There is not a hint of the Austrian economic perspective present in this plan in spite of criticism of Keynesian policies. It’s simply more of the same. Now, onto the next segment of the plan…
Part II: “Stop the Out of Control Spending and Reduce the Size of Government.”
Tea Party people – NO, just no; and shame on all of you for letting the Republican establishment into your movement! If any of you are sold on this next section, gullible isn’t a strong enough word to describe your character. Now that my mini-rant is into print, let’s examine the GOP’s plan. The first segment did not address this point. In fact, some of what was written in this current segment will EXPAND spending and government:
“Over the past three years, non-security discretionary spending (the spending that is approved each year by Congress outside of the Department of Defense, Department of Homeland Security, and Department of Veterans Affairs) has increased a staggering 88 percent. As a result, we now borrow 41 cents of every dollar we spend, much of it from foreign countries, including China, and leave the bill to our kids and grandkids.”
It’s not possible to conclude with certainty that the GOP holds the position that the Department of Defense, Department of Homeland Security and the Department of Veterans Affairs’ budgets are perfectly sound and not in need of spending cuts. However, there was no mention that these departments need to be analyzed and trimmed down (since they continue to grow at the same staggering levels as non-security discretionary spending). Therefore, I’m perplexed as to why only some departments were mentioned when we are on the topic of shrinking government and stopping the “out of control spending.” The GOP has always had their “pet” government departments, unfortunately. Any family can attest to the common sense fact that their budget cutting attempts will fail if only SECTIONS of their budget are examined. The Department of Homeland Security did not exist prior to George W. Bush’s Administration. So now we are expected to believe rhetoric from a party that created an entire new wing of government “for our safety,” and that this same party will shrink government and stop the out of control spending. This is sort of along the lines of believing that an alcoholic will undergo rehab after just one more drink.
“Economists have warned that all this borrowing runs the risk of causing a damaging spike in interest rates, which would cripple job creation.”
The establishment didn’t listen to us from the years 2000-2006 because… ?? Unfortunately, I cannot fill in the rest of that sentence.
“Congress should move immediately to cancel unspent “stimulus” funds, and block any attempts to extend the timeline for spending “stimulus” funds.”
Good. Just make sure all party members who voted FOR the funds, in the first place, are on board with this new and exciting idea.
“Cut Government Spending to Pre-Stimulus, Pre-Bailout Levels.”
This one has to make staunch Republicans feel like Chicago Cubs fans. The Cubs haven’t won a world series in over a century; and it make take over a century for Republicans to understand Finance 101. Allow me to start chapter one: Top number equals revenue, and the bottom number equals expenses. If the top number is bigger than the bottom number, this is good. If not, this is bad. If the bottom number was bigger during the time of “pre-stimulus, pre-bailout levels,” exactly how is this stopping the “out of control spending?” We don’t baby step to these things people. Why not follow through on an empty promise from the 1994 snow job – that being a balanced budget amendment?
“We must put common-sense limits on the growth of government and stop the endless increases.”
There is no common sense is growing government – PERIOD. Therefore, government cannot be grown in a common sense manner. The GOP still cannot wrap their mind around this simple concept, nor will they ever be able to escape the label of the “socialism lite” party. We won’t even get into the smoke and mirrors game behind the GOP’s FALSE claim that the budget was balanced in the late 90’s that created a surplus.
“End TARP Once And For All”
Good. End a program that your party started. Bravo!
“End Government Control of Fannie Mae and Freddie Mac”
No. That statement should read ABOLISH Fannie Mae and Freddie Mac. Government sponsored enterprises are government controlled! Whether or not these institutions are quasi-public, is IRRELEVANT. The minimal thing the GOP can do is to TRY and fool the public into believing that this document doesn’t smack of economic ignorance.
“Impose a Net Federal Hiring Freeze of Non-Security Employees”
Why just non-security? We can’t even have an honest conversation in this country about our wide-open borders and what is REALLY contributing to the crime and violence that takes place. There is no discussion about removing the bureaucracy involved in hard-working immigrants obtaining citizenship and how our drug laws contribute to violence on the borders. Let’s have those conversations first before we keep hiring government security workers to deal with an impossible situation. That wastes money and takes dollars away from the private sector as well.
The only noteworthy piece in this entire section is the pie chart of government spending.
Of course, there was absolutely no mention of the Federal Reserve, the harm its existence has caused by creating every economic bubble and crash in the past century, nor was there any mention of its abusive powers. How could anyone expect that from a party when their President appointed Ben Bernanke?
Part III: A Plan to Repeal and Replace the Government Takeover of Healthcare
Although I agree with most of what was written in this section, with a few MAJOR exceptions; I have a problem taking this plan seriously. This might have something to do with the fact that Mitt Romney, a Presidential hopeful from the 2008 campaign, started the exact same plan the Obama Administration passed in Massachusetts. How does the ‘ol saying go? I was for it before I was against it? Well, it applies here, but let’s run it down:
“Repeal the Costly Health Care Takeover of 2010”
Good, but best of luck. President Obama will never back down on this plan regardless of its growing unpopularity, so the best course of action would be to question the constitutionality of the bill through our court system. The bureaucratic maze on page 29 is a good sell.
“Enact Medical Liability Reform - Skyrocketing medical liability insurance rates have distorted the practice of medicine, routinely forcing doctors to order costly and often unnecessary tests to protect themselves from lawsuits, often referred to as ‘defensive medicine.’”
Spot on, but the dire need for tort reform preceded the passage of “Obamacare;” but, better late than never. The question is, how serious can the lawyers in Congress be about such reform, especially when these lawsuits are a cash cow? Nevertheless, defensive medicine is something I’ve written about extensively in several columns on the topic of healthcare reform. It’s one of the primary reasons why costs are very high.
“Purchase Health Insurance across State Lines”
Although this won’t make the system worse, it won’t do as much to improve it as people think. The health insurance market is effectively an oligopoly. Until we remove the use of insurance as ACCESS to care, all this will do is spread the existing out-of-control costs more uniformly between states. The solution to healthcare goes far beyond this issue.
“Expand Health Savings Accounts” (HSAs)
I’m honestly on one hand when I list the good things that the Bush Administration accomplished. However, the Bush Administration deserves MAJOR kudos for at least getting the ball rolling in the right direction on healthcare reform. Unfortunately, for every step forward his administration went, it also went two steps backwards – an example being Medicare Part D. Nevertheless, the creation of HSAs, which are attached to high-deductible insurance plans, are the first step in removing the misuse of insurance in our health care system. Insurance was never meant to be a means of access to health care; it is merely a SAFEGUARD against catastrophe. The misuse of insurance is the largest factor as to why costs have spun out of control, as it has effectively created the “all you can eat buffet” approach to healthcare. With the expansion of HSAs, people who already have them will enjoy even lower costs, and by returning the use of insurance to its proper role, everyone will enjoy lower costs and BETTER care.
“Ensure Access for Patients with Pre-Existing Conditions”
Just when they are doing so well, the bottom falls out. This section should have gone into explaining high-deductible insurance further, and why these plans must replace the current system. This is what people do not understand. The costs will NOT come down when insurance plans are required to cover everything under the sun. This is BASIC economics. The GOP wishes to expand high-risk pools, but the problem is people cannot afford this insurance in the first place; and their expansion will NOT reduce the cost of coverage, which backs lawmakers into providing subsidies. What do we know about costs when the government subsidizes people? Yes, they go UP, as referenced by the costs of Medicare and Medicaid.
The pledge goes onto say that they will “make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition, eliminate annual and lifetime spending caps, and prevent insurers from dropping your coverage just because you get sick.”
First of all, the reason why people are denied coverage due to a pre-existing condition is because some people only purchase health insurance when they get sick. This means they have NOT paid into the pool, so others who have paid will be paying for this person’s care. This is yet another reason why insurance as access to care is flawed. Again, that should be the focus of this segment instead of this populist drivel. High-deductible premiums cost LESS, which means more people could afford them. Also, if people pay for healthcare as they use it, they will make wiser decisions, which will bring DOWN the costs. The lower cost of high-deductible insurance will insure more people, thus diminishing the pre-existing condition problem.
Second, the elimination of lifetime spending caps sounds good, but it will severely escalate costs. The individual should be empowered to choose their level of insurance – not the government.
Lastly, this bit about insurance companies dropping people because “they get sick” is more populist nonsense. Is the Democrat’s pledge or the GOP’s pledge? This is straight from Obama’s playbook. People are dropped because their care exceeds their spending caps, BUT that is the level of coverage the person PURCHASED. They are not dropped because they get sick! That’s a gross misstatement of the facts. There are also people who abuse insurance, and these people SHOULD be dropped or at least investigated, as they raise the costs for everyone else.
If the GOP wishes to put people in charge of their own healthcare, then the promotion of high-deductible insurance is the correct approach. The last part of the plan effectively EXPANDS the power of government, the very thing they promise not to do; however, the contradictions are glaring in this document.
The bottom line is no one is going to be able to afford health insurance coverage if the government continues the “all you can eat buffet” approach to health insurance. Eventually, the end result will give the leftists in this country the power to allow the government to move to a single-payer system. That’s been the ultimate goal of the Obama Administration. The lawmakers in Congress are wise enough to know they won’t get there in one step, but they’ll get there faster with the GOP’s help.
Part IV: “A Plan to Reform Congress and Restore Trust”
This section isn’t worthy of much commentary, as it’s more of the same election-time rhetoric that makes one drowsy. The only thing I will comment on is the pledge to “adhere to the constitution.” Out of all of the empty rhetoric, this stands out as the most hypocritical. Neither party has adhered to the constitution; otherwise, our federal government would not have grown to its enormous current size. For example, the commerce clause has always been an argument for the federal government to intrude into the private sector. The plea to adhere to the constitution is only heard in two instances: 1) in attempts to stop the other party’s political agenda (in favor or a more or less extreme version of their own) and 2) near election time as a means to fire up voters.
As for the rest of the empty talking points in this section, make yourself another cup of coffee or tea to get through it on your own.
Part V: “A Plan to Keep our Nation Secure at Home and Abroad”
Rather than reading an economist’s perspective on foreign policy, I’ll defer to our foreign policy specialists to get into the “nitty-gritty” of this issue. I will, however, briefly comment on a few issues:
First, I am in agreement with passing clean troop funding bills. This would help make more prudent spending decisions when irrelevant legislation is pulled out of military funding bills. A most recent example of this would be the repeal of DADT and non-military spending proposals being placed in a military funding bill.
Second, I believe that non-U.S. citizens who are alleged terrorists should NOT be tried in the same court system that failed to convict O.J. Simpson and Rod Blagojevich. In all seriousness, these people are not American citizens, and they do not represent any of the military of any foreign government. Therefore, the laws of the constitution and the Geneva Conventions do NOT apply.
Last, states should have more rights and flexibility to deal with border security issues.
Part VI: “Checks and Balances”
This section is filled with more campaign rhetoric. Checks and balances did not apply when the GOP was the majority power for 6 years. The GOP accused President Obama of campaigning on an empty platform. It seems that Republicans are making the same pathetic attempt.
Part VII “Speak Out”
The last section encourages people to “speak out.” I have spoken and sharply criticized this new pledge. Republicans have never been able to convince me that they provide a smaller, limited government alternative. They have only created the illusion that there is a distinct difference between themselves and Democrats. Sadly, advocates of a limited government and a free market still have no choice at election time based on this pledge. If you are a leftist, you should be thrilled to see that no major harm will come to your policies.
I’ve outlined the major inconsistencies in this pledge, and I encourage people who care about the future of this country to do the same – SPEAK OUT and hold your elected officials and hopefuls ACCOUNTABLE. Carefully examine their voting records to see if the action matches the rhetoric. Do NOT get caught up in looking to see if a “D” or and “R” is after a person’s name. If history hasn’t shown you that this mentality is disastrous, then brush up on your facts. This election should NOT be about a plan to remove Obama from office, or simply put some of his policies on hold. If people want to “take this country back,” then it starts by removing the ESTABLISHMENT. This pledge is NOT an acceptable alternative to the current administration. It’s simply campaign rhetoric and provides not a shred of proof that anything will change in the near term and in post-2012. My concern is that so many people are getting caught up in getting Obama out of office; they are not paying attention to who they will be electing into office this November. It is this near-term shortsightedness that has gotten America in so much trouble in the past.
Independents decide every election. Last election, independents were fed up with George W. Bush and Republicans – mainly because of the reasons I outlined in this column along with a growing disdain of prolonged wars in the Middle East. Due to the fact that John McCain ran one of the worst campaigns in recent history, no one paid attention to Obama’s platform (except his staunch left-wing advocates). No one realized that Obama wished to expand the very policies they just voted out. History repeats itself over and over. When Republicans move further to the left (Herbert Hoover, Richard Nixon and George W. Bush being prime examples), left-wingers’ unfounded disdain successfully gets their candidate elected – mainly because of blind voter outrage.
Those who truly believe in the ideologies in which America was founded cannot make that same mistake again. Voting blindly, for the “lesser of two evils,” or out of anger does not solve America’s serious problems. People have to ask themselves if they truly believe in the ideologies they uphold:
• Are people really serious about not depending on the government? Are people ready to pay for their own healthcare?
• Are the unemployed ready to do away with prolonged unemployment benefits so businesses will have fresh capital to expand in order to create jobs as opposed to paying higher hiring costs?
• Are people willing to work hard and save their money instead of wanting access to cheap credit?
• Are people willing to live within their means?
• Do people who work in the financial sector and make plenty of money off of the tax code and complex regulations ready to use their education and skills in a manner that can help businesses grow instead of comply with an overbearing government; and would they not show bitterness in having to compete for new jobs?
• Are lawyers done making money off of ridiculous anti-business, anti-growth laws?
• Are we willing to lift the regulatory and collective stranglehold so America can become a nation that produces?
If we cannot answer “yes” to the aforementioned questions, then are we really a society that wants all of the large safety nets and cushions that Western European countries offer coupled with the American lifestyle? The truth is, both cannot co-exist as our current level of spending and debt indicates. If Americans want those safety nets, then they will need to forego their freedoms and lifestyles, as this charade cannot continue. If there are enough people who believe in the free market, limited government ideology, then America will see a new wave of politicians begin to surface since voting records will be carefully examined. In addition, we may consider taking chances on newcomers that “dabble in witchcraft” and support people like Governor Chris Christie of New Jersey. Christie has fought the good fight against collectivism and big government by fighting some of the strongest unions in the country and remaining incredibly committed to fiscal responsibility.
What’s it going to be America? We have the power to decide.
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