Acton Republican Town Committee

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- David Stone

Here's another interesting post from my friend Bill Frezza:

 
March 29, 2010
 
The Dawn of a New Age In the United States
 
By Bill Frezza
 
Snatching victory from the jaws of defeat, after a tumultuous year of political theater, the Age of Obama has dawned.
 
With legislative success however tarnished by rancor and dissent, the hopes and dreams of generations of Progressives have been fulfilled. The trifecta of Social Security, Medicare, and the first installment of Universal Healthcare are now the law of the land.
 
Based on a common set of financial principals and an unshakable faith in the wisdom of government the productive power of the young, the healthy, the successful, and generations yet unborn are now fully lashed to the yoke of redistribution. The poor, the old, the infirm, the government employee, the union worker, the dropout, and the slothful have cause to rejoice as their party has delivered the goods.
 
Or so they think. Let's take a quick look at the numbers.
According to the most recent Social Security and Medicare trustees report, the unfunded liabilities of these New Deal and Great Society programs exceed $100 trillion dollars. Add the unfunded Medicaid mandates imposed on the states along with the pension liabilities of millions of federal, state, and local government employees and the total becomes almost impossible to comprehend.
 
Try this on for size. If you confiscated the entire Gross Domestic Product of the US for ten years you couldn't cover all these liabilities.
 
Confiscate the GDP? That's Communism! OK, how about confiscating half the GDP? Too late, that money is already spoken for.
 
Combined Federal, State, and Local government spending is now at 37.5% of GDP and heading north. The European Union, our Progressive model, has already passed the 50% mark.
 
Note that these confiscatory levels of taxation can't even cover this year's spending. None of the money already being diverted from the economy is being used to shore up the aforementioned liabilities. These not only remain but are swelled by annual deficits.
 
Get the picture? Obama just handed the American people an empty gift box. Good luck collecting.
FDR promised that Social Security would never lead to runaway spending. LBJ promised the same for Medicare and Medicaid. President Obama is promising that his Universal Healthcare program will not only pay for itself but will generate savings that can be used to reduce the deficit.
 
The American people cannot possibly be so stupid as to take these political promises at face value. Somehow supporters must imagine that all these bills can be paid for by "the rich" while 95% of Americans enjoy tax cuts and subsidies. As citizens are invited to stick their hands ever deeper into their neighbors' pockets, a majority of voters must believe they are going to get more than they have to give.
 
And why shouldn't they? It's worked so far hasn't it? Our progressive income tax system has reached the point where half the population pays no income tax at all. What do they care if tax rates have to go up? And today's retirees, like Bernie Madoff's early clients, have already collected many times more than they paid in to Social Security and Medicare. Their thanks? A parting gift of consuming 30% of the nation's healthcare budget in their final year of life.
 
FDR and LBJ died before anyone had to deliver on the promises they made. The problem for Obama is that his predecessor's bills are coming due just as he is piling on more.
 
Social security recently passed its high water mark. The program now and forevermore will be paying out more than it takes in. In order to write these checks, the Social Security Administration has to redeem the vast mountain of IOUs it received when former Congressmen plundered every last penny of the so called "trust fund." There is only one place today's Congress can go to redeem these IOUs, and that is to the general taxpayer.
 
Kill the rich and eat them, there are too few to cover all these bills. The Age of Obama will certainly bring us equality. We will all be equally broke.
 
Meanwhile one form of inequality continues to grow unchecked, unnoticed as the media devotes all its energy to chasing banker bonuses. Studies show that government workers now get $1.45 in pay and benefits for every $1 received by comparable workers in the private sector. This should come as no surprise. While private sector unions have largely bankrupted their employers, save those like General Motors that have been nationalized, public sector unions have no such limitations. Representing a solidly Progressive voting bloc, the swelling ranks of public employees can be counted on to pass their bills along to the rest of us as they demand ever larger chunks of a shrinking pie.
 
This tragedy of abject profligacy can end only one way. Watch the drama unfolding in the land where democracy was born. German charity might allow the Greeks to enjoy their Progressive lifestyles a bit longer but eventually the disease of runaway social democracy will bankrupt the rest of Europe too.
 
Who wants to bet whether the Chinese will continue financing us long enough to be drawn down this rate hole of self-inflicted fiscal immolation?
 
# # #
 
Bill Frezza is a partner at Adams Capital Management, an early-stage venture capital firm. He can be reached at bill@vereverus.com. If you would like to subscribe to his weekly column, drop a note to publisher@vereverus.com.
 

http://www.realclearmarkets.com/articles/2010/03/29/the_dawn_of_a_new_age_in_the_united_states_98396.html

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February 22, 2010

Pin the Bogeyman On the Tea Party

By Bill Frezza

Have you watched with amusement as various political commentators have tried to demonize the amorphous Tea Party movement by outing behind-the-scenes bogeymen allegedly pulling the strings of this latter day Great Awakening?

Sarah Palin. Glenn Beck. Dick Armey. Newt Gingrich. Grover Norquist. Jack Abramoff. Lyndon LaRouche. The John Birch Society. The list goes on.

None of it is sticking.

From time to time one professional politico or another may try to jump out in front of the parade. But everyone knows that the Tea Party has no leader, and with a little luck never will. That's because it's not a political party. In the best tradition of the American Revolution, it's an angry mob. Hence, the name.

Political parties have platforms, policy prescriptions, and principals (though rarely principles). Party candidates connive to get elected promising to "solve problems" and "serve constituents" - in practice the people, corporations, and special interest groups that finance their multi-million dollar election campaigns. The goal of a political party is to get its hands on the levers of government so its unlimited reservoirs of power and money can be used to advance party interests.

The highest principle of any political party is to replace the bogeymen of the rival party. Whether Democrat or Republican their pitch is always a variation on the same theme. "Trust us, you threw us out when we made a hash of things last time we had the upper hand but this time will be different!"

How has this game of musical factions been working for America?

The Tea Party is not a political party. It does not seek power and money. The Tea Party is the primal voice of "No." It is the embodiment of the admonition that when you find yourself at the bottom of a hole you should stop digging. It is the realization that when a giant Rube Golberg machine starts to come apart at the seams, patching it up with more hairy contraptions designed to hold the monstrosity together until the next election almost always makes matters worse.

The Tea Party does not want Congress to do the People's business. It wants the People to do the People's business, each minding his own.

The Tea Party will never actually elect its own candidates to office. If it tries it will implode. But it may find its voice and change the course of history if it can keep its message both simple and faithful to the one and only issue that unites its members.

Imagine the impact on political discourse if the Tea Party threw its weight behind any candidate from any party that takes the Pledge of No.

"If elected I promise to vote "No" on any bill that proposes to expand government power for any purpose. I promise to vote "No" on any bill whose net effect does not reduce government spending. I promise to vote "No" on any bill whose net effect does not reduce federal taxes."

That's it. To maximize its impact, the Tea Party should studiously avoid taking any positions on social policy. Or foreign policy. Or abortion, gay rights, immigration, healthcare, religion, drugs, unionism, or any other issue that might tear the Tea Party into as many pieces as there are diverse opinions amongst the American people. Let one hundred flowers bloom. But not with our money.

Just as a sick person needs to stay away from quack doctors long enough to heal, our ailing economy needs to stay out of the clutches of Congress long enough to recover. The best way to do that is to strike fear in the heart of every Congressman who doesn't take the Pledge of No.

The American economy has tremendous reserves of resilience if you just let its productive members be. The reason is simple. While some Americans hope to achieve the egalitarian dream of social democracy where everyone lives the good life at the expense of someone else, most understand that if we go that route we are destined to end up as bankrupt as the Greeks.

Most Americans value hard work. Most appreciate the fact that if they spend all their money today there will be none left tomorrow. Most understand that if you break the connection between risk and reward you get neither. Most admire success, favoring aspiration over envy. Most Americans know that freedom runs deep in our character while free stuff invariably runs dry.

Most, but not all. Those who don't need to be reminded.

The Tea Party movement may end up being a short lived phenomenon but it can have a tremendous impact if it repeats its message loudly and clearly enough to be heard over the ridicule of political partisans and media elites.

Are you mad enough to insist on the Pledge of No?

# # #

Bill Frezza is a partner at Adams Capital Management, an early-stage venture capital firm. He can be reached at bill@vereverus.com. If you would like to subscribe to his weekly column, drop a note to publisher@vereverus.com.

http://www.realclearmarkets.com/articles/2010/02/22/pin_the_bogeyman_on_the_tea_party_98353.html