Friday, December 31, 2010

The American 21st Century

America’s rivals lack the culture necessary to sustain greatness. 

From Victor Davis Hanson at NRO:

The current debt, recession, wars, and political infighting have depressed Americans into thinking their country soon will be overtaken by more vigorous rivals abroad. Yet this is an American fear as old as it is improbable.

In the 1930s, the Great Depression supposedly marked the end of freewheeling American capitalism. The 1950s were caricatured as a period of mindless American conformity, McCarthyism, and obsequious company men.

By the late 1960s, the assassinations of John and Robert Kennedy and Martin Luther King Jr., along with the Vietnam War, had fueled a hippie counterculture that purportedly was going to replace a toxic American establishment. In the 1970s, oil shocks, gas lines, Watergate, and new rustbelts were said to be symptomatic of a post-industrial, has-been America.

At the same time, other nations, we were typically told, were doing far better.

In the late 1940s, with the rise of a postwar Soviet Union that had crushed Hitler’s Wehrmacht on the eastern front during World War II, Communism promised a New Man as it swept through Eastern Europe.
Mao Zedong took power in China and inspired Communist revolutions from North Korea to Cuba. Statist central planning was going to replace the unfairness and inefficiency of Western-style capitalism. Yet just a half-century later, Communism had either imploded or been superseded in most of the world.

By the early 1980s, Japan’s state capitalism along with emphasis on the group rather than the individual was being touted as the ideal balance between the public and private sectors. Japan Inc. continually outpaced the growth of the American economy. Then, in the 1990s, a real-estate bubble and a lack of fiscal transparency led to a collapse of property prices and a general recession. A shrinking and aging Japanese population, led by a secretive government, has been struggling ever since to recover the old magic.

At the beginning of the 21st century, the European Union was hailed as the proper Western paradigm of the future. The euro soared over the dollar. Europe practiced a sophisticated “soft power,” while American cowboyism was derided for getting us into wars in Afghanistan and Iraq. Civilized cradle-to-grave benefits were contrasted with the frontier, every-man-for-himself American system.

Now Europe limps from crisis to crisis. Its undemocratic union, coupled with socialist entitlements, is proving unsustainable. Symptoms of the ossified European system appear in everything from a shrinking population and a growing atheism to an inability to integrate Muslim immigrants or field a credible military.
As we enter this new decade, we are being lectured that China is soon to be the global colossus. Its economy is now second only to America’s, but with a far faster rate of growth and with budget surpluses rather than debt. Few seem to mention that China’s mounting social tensions, mercantilism, environmental degradation, and state bosses belong more to a 19th- than a 21st-century nation.

Amid all this doom and gloom, two factors are constant over the decades. First, America goes through periodic bouts of neurotic self-doubt, only to wake up and snap out of it. Indeed, indebted Americans are already bracing for fiscal restraint and parsimony as an antidote to past profligacy.

Second, decline is relative and does not occur in a vacuum. As Western economic and scientific values ripple out from Europe and the United States, it is understandable that developing countries like China, India, and Brazil can catapult right into the 21st century. But that said, national strength is still measured by the underlying hardiness of the patient — its demography, culture, and institutions — rather than by occasional symptoms of ill health.

In that regard, America integrates immigrants and assimilates races and ethnicities in a way Europe cannot. Russia, China, and Japan are simply not culturally equipped to deal with millions who do not look Slavic, Chinese, or Japanese. The Islamic world cannot ensure religious parity to Christians, Jews, or Hindus — or political equality to women.

The American Constitution has been tested over 223 years. In contrast, China, the European Union, India, Japan, Russia, and South Korea have constitutional pedigrees of not much more than 60 years. The last time Americans killed each other in large numbers was nearly a century and a half ago; most of our rivals have seen millions of their own destroyed in civil strife and internecine warring just this past century.
In short, a nation’s health is gauged not by bouts of recession and self-doubt, but by the durability of its political, economic, military, and social foundations. A temporarily ill-seeming America is nevertheless still growing, stable, multiethnic, transparent, individualistic, self-critical, and meritocratic; almost all of its apparently healthy rivals, by contrast, are not.

— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author, most recently, of The Father of Us All: War and History, Ancient and Modern. You can reach him by

Wednesday, December 29, 2010

Is It a Right or Isn't It?

From Ross Kaminsky at The American Spectator:

In an October, 2008 debate against John McCain, Barack Obama said that health care "should be a right for every American."
In rights parlance, his assertion is one of a "positive right" meaning that others may be compelled to provide a person's health care. This is distinguished from essentially every right laid out for Americans in our Constitution: these are "negative rights," meaning that they proscribe others from inhibiting you from exercising your right but do not otherwise require active cooperation of others. Your right to free speech does not require others to help you breathe; it simply requires them to leave you alone (except in a few very specific circumstances where your speech is likely to cause imminent harm to others, thus infringing on their negative right not to be killed, beaten, or robbed).
On the other hand, if health care is a right, that means that an American who for whatever reason does not have access to a doctor must be provided that access, whether that means redistributing taxpayer money to the would-be patient or even the potential of forcing a doctor to provide his services in an area "underserved" by health care professionals.
The problem with Obama's positive right formulation -- as with all positive rights -- is that one never knows where such a right ends, if or when such a right might be curtailed when it conflicts with citizens' other (usually negative) rights.
Those who argue that perhaps our foundational (and negative) American right to the pursuit of happiness is infringed upon by the government's taking money earned presumably "according to our ability" and distributed presumably "according to our need" are called heartless and told that our policy suggestions will lead to children starving in the streets. Conservatives and libertarians have never figured out how to counter such heart-rending arguments -- even if the arguments are utterly belied by real-world outcomes, such as the 1996 welfare reform bill signed by a reluctant Bill Clinton (who now proudly claims that legislation as one of his great achievements).
In the modern welfare state, the asserted positive right seems always to win; in particular, there seems to be no limit to the amount of a "rich" person's money the left is willing to redistribute in order to fund America's own socialism-lite, pleasantly rephrased "the safety net."
Indeed, why should there be a limit if welfare or a retirement income or health care is a right?
But at some point, even the charitable and constitutionally illiterate American populace pushes back on the cost of these so-called rights. With trillion-plus-dollar budget deficits as far as the eye can see, we've reached that point in America and the government is now looking for ways to curtail the cost of the latest created right, the so-called right to health care. And when looking to contain costs, it only makes sense to look where government's costs are highest: in the last year of a person's life.
Studies have shown that the percentage of Medicare spending for people in the last year of their lives has been in a narrow range just under 30% for several decades, with about 5% of Medicare patients dying each year.
Chief of the Centers for Medicare and Medicaid Services, Dr. Donald Berwick, a health care socialist who idolizes the British National Health Service -- that's the group who will only treat macular degeneration in one eye because it's better for a person to go blind in one eye than for the government to spend another £1,500 to save both eyes -- is on record saying that health care must and will be rationed. In that vein, and despite a similar provision being removed from the Obamacare bill during debate in the Senate with cries of "death panels," Berwick has issued a rule allowing reimbursement to doctors for end-of-life planning.
Of course, the only way such planning will save money is if the plan calls for grandma to die a little sooner. (Take that, formerCongressman Alan Grayson.) And suddenly, liberals come face to face with the contradiction, or at least unsustainability, of their assertion of health care as a right.
After all, if it is a right, shouldn't Grandma Smith be entitled to as much of the Jones' and Jacksons' money as necessary to keep her alive for as long as she wants to and can have a pulse in her heart, a breath in her lungs?
The big-picture problem for the left is that in the context of government-run health care Berwick's rule is not only sensible, but it's the only possible outcome. This leaves proponents of a "right" in the uncomfortable position of having to say that it's only a right up to a certain age, a certain degree of sickness, or a certain cost.
Yet, if a "right" ends at an arbitrary point set by bureaucrats and legislators -- a point not based on conflict with other rights but rather with changeable financial or political considerations -- then it can't be a right. Furthermore, if a positive right such as that claimed by supporters of Obamacare can be curtailed because of cost, then every government program that relies on the redistribution of wealth can be curtailed. Either they're all "rights" or none of them is.
Of course, the idea that government, with an incentive to "control costs," would be involved with end-of-life counseling is disturbing enough. But perhaps the biggest problem for Progressivism in the news of Berwick's giant step toward health care rationing is that the country is learning in an unmistakable way that the emperor has no clothes. In our constitutional republic, positive rights are anathema to liberty and to life itself.

Tuesday, December 28, 2010

Political End Runs

From Thomas Sowell at RealClearPolitics:

The Constitution of the United States begins with the words "We the people." But neither the Constitution nor "we the people" will mean anything if politicians and judges can continue to do end runs around both.
Bills passed too fast for anyone to read them are blatant examples of these end runs. But last week, another of these end runs appeared in a different institution when the medical "end of life consultations" rejected by Congress were quietly enacted through bureaucratic fiat by administrators of Medicare.
Although Congressman Earl Blumenauer and Senator Jay Rockefeller had led an effort by a group of fellow Democrats in Congress to pass Section 1233 of pending Medicare legislation, which would have paid doctors to include "end of life" counselling in their patients' physical checkups, the Congress as a whole voted to delete that provision.
Republican Congressman John Boehner, soon to become Speaker of the House, objected to this provision in 2009, saying: "This provision may start us down a treacherous path toward government-encouraged euthanasia."

Whatever the merits or demerits of the proposed provision in Medicare legislation, the Constitution of the United States makes the elected representatives of "we the people" the ones authorized to make such decisions. But when proposals explicitly rejected by a vote in Congress are resurrected and stealthily made the law of the land by bureaucratic fiat, there has been an end run around both the people and the Constitution.

Congressman Blumenauer's office praised the Medicare bureaucracy's action but warned: "While we are very happy with the result, we won't be shouting it from the rooftops because we are not out of the woods yet."

In other words, don't let the masses know about it.

It is not only members of Congress or the administration who treat "we the people" and the Constitution as nuisances to do an end run around. Judges, including Justices of the Supreme Court, have been doing this increasingly over the past hundred years.

During the Progressive era of the early 20th century, the denigration of the Constitution began, led by such luminaries as Princeton scholar and future President of the United States Woodrow Wilson, future Harvard Law School Dean Roscoe Pound and future Supreme Court Justice Louis Brandeis.
As a Professor at Princeton University, Woodrow Wilson wrote condescendingly of "the simple days of 1787" when the Constitution was written and how, in our presumably more complex times, "each generation of statesmen looks to the Supreme Court to supply the interpretation which will serve the needs of the day."

This kind of argument would be repeated for generations, with no more evidence that 1787 was any less complicated than later years than Woodrow Wilson presented-- which was none-- and with no more reasons why the need for "change" meant that unelected judges should be the ones making those changes, as if there were no elected representatives of the people.

Professor Roscoe Pound likewise referred to the need for "a living constitution by judicial interpretation," in order to "respond to the vital needs of present-day life." He rejected the idea of law as "a body of rules."

But if law is not a body of rules, what is it? A set of arbitrary fiats by judges, imposing their own vision of "the needs of the times"? Or a set of arbitrary regulations stealthily emerging from within the bowels of a bureaucracy?

Louis Brandeis was another leader of this Progressive era chorus of demands for moving beyond law as rules. He cited "newly arisen social needs" and "a shifting of our longing from legal justice to social justice."
In other words, judges were encouraged to do an end run around rules, such as those set forth in the Constitution, and around the elected representatives of "we the people." As Roscoe Pound put it, law should be "in the hands of a progressive and enlightened caste whose conceptions are in advance of the public."

That is still the vision of the left a hundred years later. The Constitution cannot protect us unless we protect the Constitution, by voting out those who promote end runs around it.

The West and the Tyranny of Public Debt

From Jacques Attali at Newsweek:

The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes. But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes.

Anyone saying this today is accused of pessimism. The first signs of economic recovery, harbingers of a supposedly falling debt, are held up to contradict him. Yet we wouldn’t be the first to think ourselves uniquely able to escape the fate of other states felled by their debt, such as the Republic of Venice, Renaissance Genoa, or the Empire of Spain.

The history of public debt is intimately tied to the evolution of the state itself. In the ancient empires—Babylon, Egypt, China—rulers must at least occasionally have found it necessary to borrow on the expectation of future conquests, harvests, or taxes. But it’s in Greece where the first known records of sovereign loans appeared in the 5th century B.C. With insufficient taxes and war booty to finance their military campaigns in the Peloponnesian War, the Greek city-states took to borrowing from the religious authorities, who had been hoarding temple offerings from the faithful. The debt habit quickly spread throughout the Greek city-states, and the hubris of debt played no small part in the erosion of Hellenic power and the rise of Rome.

Government borrowing continued, although during the entire first millennium A.D. it remained the exclusive right of princes, motivated—and reimbursed—mainly by warfare. Debt did not become truly “public” until national authority became something separate from the person of the prince. Once sovereignty finally became embodied as a state, an abstract and immortal entity, a nation’s debt could be carried over from one ruler to the next. This distinction, between the signer and the entity he represents, first appeared in Europe’s only stable organizations at the time: Christian religious orders. The first known institutional loan was contracted by the English monastery of Evesham in 1205.

The distinction proved useful and soon caught on in the Italian city-states. From the 13th to the 15th century, the princes and shipowners who governed Venice, Florence, and Genoa never stopped borrowing from merchants in order to finance their wars against one another for commercial supremacy. It was the Italians who invented the public treasury. In 1262, Reniero Zeno, Doge of Venice, explicitly allocated debt to the city, confiding its management to a specialized bureaucracy called Il Monte. His innovation quickly found imitators in rival Italian city-states and beyond.

With the rise of public treasuries came instruments for a more sophisticated management of public debt. Moratoriums, inflation, and defaults became stages of the debt cycle, and this inexorable pattern kept repeating itself, sometimes disrupted by revolutions, as in 18th-century France. Ruined by the Seven Years’ War and aid to the rebels in the American Revolution, the French kingdom was on the verge of bankruptcy. In 1787, public debt reached 80 percent of GDP and debt servicing accounted for 42 percent of state revenue. The taxpayers at the time—the bourgeoisie—took fright. What happened next is schoolbook history: finance minister Jacques Necker attempted a last-ditch effort to cut budgets and stabilize the deficit, Louis XVI summoned the Estates-General, and the French Revolution erupted.

Across the Atlantic, meanwhile, the leaders of the newly independent United States of America were struggling to manage the consequences of their own revolution. The rebels had taken out loans to finance the War of Independence, and now the young federal state had to decide how to deal with the public debt. The matter was settled on June 20, 1790, over dinner in New York. Alexander Hamilton conceded the establishment of the national capital in a neutral location; in exchange, Thomas Jefferson and James Madison agreed to roll the individual states’ war debts into bonds to be underwritten by the new federal government. In a sense, Washington, D.C., and America’s public debt were twins.

The American and French revolutions opened a new phase in the history of debt. With power now in the people’s hands, state spending grew to cover a wide range of public services: transportation, communication, police, health care, education, even retirement. These new needs drove more and more borrowing, resulting in the creation of ever-more-sophisticated financial instruments. But trouble arose as the amount of borrowing spawned doubt about governments’ capacity to repay, leading markets to demand ever-larger returns. Faced with unsustainable debt, states often simply defaulted. Between 1800 and 2009, the world experienced more than 300 national defaults, some on all debt, others only on the debt held by foreigners. That mortal combat between states and markets is now transfixing the world. Each side is anxiously watching the other’s every move.

How do we break the deadlock? The first step is to recognize that the worst is possible. History provides lessons. The first concerns the very nature of public debt: it is an obligation handed down from the present generation to future ones. The latter must always pay, one way or another—which is why public debt is acceptable only under certain conditions. First, it is tolerable only if you anticipate that future generations will be large and rich. Second, it is legitimate only if it finances forward-looking investment. Public debt can encourage growth and help make future generations richer. But for that, one must parse unwise debt (debt that finances running costs) from intelligent debt (public infrastructure for energy, transport, health care, or education).

History also teaches that public debt must be handled carefully even when it’s intelligent debt and even when the borrowing is moderate. Nobody can predict what will trigger a sovereign debt crisis because in practice such crises arise more from a subjective loss of confidence than the crossing of any specific threshold. But history has shown that almost all excessively indebted states eventually default. France did it six times, including the notorious 1797 Bankruptcy of the Two Thirds, in which the government repudiated 67 percent of the national debt. Some states have actually collapsed under sovereign debt crises: Venice in 1490, Genoa in 1555, Spain in 1650, and Amsterdam in 1770.

Still, accumulating excessive debt is far too easy. Spending naturally rises faster than revenue. But once the fatal spiral begins, how can a state escape disaster? There are only eight options: (1) higher taxes; (2) less spending; (3) more growth; (4) more lenient interest rates; (5) worse inflation; (6) war; (7) external aid; or (8) default. All eight options have been used in the past, but only one of them is both plausible and desirable today: growth. A growing economy (which raises tax revenue) permits the absorption of debt and restores sustainable public finances. Then borrowing can resume—if it will encourage further growth. Responsible governments do not finance their everyday expenses by borrowing, and they keep their investments at a level they can repay.

History offers one final lesson. The power of sovereign states can foster a sense of impunity that encourages excessive debt. In the past, sovereign states have sometimes rid themselves of creditors by simply driving them out (as they did repeatedly with Europe’s Jews), by tormenting them, or by simply refusing to pay. When modern states borrow from a range of anonymous investors on global markets, sovereign immunity protects their assets against seizure—China cannot seize the White House as collateral for U.S. Treasury debt. But creditors can still negotiate, even with sovereign debtors. When a state loses the market’s confidence, the threat of a financial cutoff is a jolt back to reality. Just ask Greece, as its leaders scramble to reduce its public deficit as quickly as possible. The West needs to wake up now, shake off the yoke of public debt, and take the path of liberty. That path is long and difficult. It means balancing budgets and stabilizing the financial sector. But the great reward will be a return to confidence and growth—for those who put in the effort, and for those with the audacity to see it through.

Monday, December 27, 2010

Turning America Around

From Pete DuPont at The Wall Street Journal:

Barack Obama promised to change America, and he did. Federal spending has increased in two years to $3.72 trillion from $2.98 trillion, a 25% increase. The national debt has swelled to almost $14 trillion from $10 trillion in the same period, and the Office of Management and Budget estimates that it will reach $26 trillion by 2020. ObamaCare is moving 17% of the U.S economy from individual choice to government management and direction. Protectionist policies have stopped trade agreements with several countries.
As Newsweek declared on its cover in February 2009, "We Are All Socialists Now." The magazine added: "America of 2009 is moving towards a modern European state," so that we "will become even more French" and there will be "more government taxing and spending" and "more government intrusion into the economy will almost surely limit growth."
The American people didn't like what they saw--didn't like the recession, didn't like the vast expansion of government, didn't like government control of much of our economy, didn't like the huge increases in government spending, the tax increases that were scheduled to take effect automatically on Jan. 1 or the huge federal debt, and didn't like America's decline in the world's opinion.
So on Nov. 2, the voters changed much of America's leadership. They increased the number of Republican senators by six and House members by 63, and let them all know they believed individuals and marketplaces were more important to opportunity than governmental economic control and regulation. More Republican state legislators were elected too, giving the party 3,941 of them, the greatest number since 1928.
So a new Congress with very different thinking will arrive next week. We have already seen substantial changes in the lame-duck session of the past few weeks. Its performance was remarkable. First, the Bush tax cuts were extended for all taxpayers. Second, Republicans stopped the budget-busting and earmark-filled omnibus spending bill that the Democrats wanted to pass as their last spending hurrah.
The same week, a federal judge in Virginia declared portions of ObamaCare unconstitutional. As The Wall Street Journal declared: "The single most important result of the November 2 election is the marginalization of the House Democratic left. . . . Paul Ryan has replaced Barney Frank as the most prominent House spokesman on economics."
When the Republican House comes into session there will be new rules, new procedures, and very new thinking about what the government should be doing.
There are many goals at the center of the new congressional thinking. One of them, averting a tax increase, has been achieved. But the need for reforming the tax code by making the current lower tax rates permanent, simpler and fairer, with fewer deductions and lower rates, would be an important next step. A flat tax is the best goal.
Three more goals are important. Obviously getting government spending under control is the first. As I pointed out in my September column, since the end of World War II, average annual government spending was 19.6% of gross domestic product, but it is now 24% to 25%. Rolling it back to the 19% to 20% range should be the Republican goal. Nondefense discretionary spending has risen 88% in the past three years. Rolling its increase back to the rate of inflation--3% or 4% a year-- is another Republican goal.
Second comes reducing the huge increases in government regulation. The election ensures that the Waxman-Markey "cap and trade" bill, which the House but not the Senate passed, won't become law. It would have regulated wages, corporations, states, cities, lights, houses, snowmobiles and on and on. Getting rid of government mandates and subsidies--minimum ethanol usage, prevailing wage requirements, the inability to purchase health insurance across state lines, farm subsidies, and green energy subsidies, for example--is the next step. America needs to return to the market choices that individuals should have.
The third goal is amending ObamaCare to get the government out of health-care regulation. Last Tuesday Health and Human Services Secretary Kathleen Sebelius issued a 136-page rule providing for price controls on health insurance, thus expanding federal regulation of an industry generally regulated by states. Starting in 2012 the government will set price thresholds for each state, and this is in an area where markets rather than government have been able to decide on consumer products. These new rules are just one example of the growing reach of the federal government that the new Congress must fight and limit.
These changes are the public policy goals for the new House of Representatives, but probably not of the Obama administration. So the battle that begins next week will be the most significant change in public policy discussions in several years. And we can be sure the new Republican House and Democratic Senate won't agree on much. House Republicans have their work cut out for then in 2011. Their New Year's resolution should be: "Let's get to it."

Don't Spare the Boomers

From Robert Samuelson at RealClearPolitics:

WASHINGTON -- I received my Medicare card the other day, recognizing my 65th birthday and making me part of one of America's biggest problems. By this, I mean the burden that the massive baby-boom generation will impose on its children and the nation's future. There has been much brave talk recently, from Republicans and Democrats alike, about reducing budget deficits and controlling government spending. The trouble is that hardly anyone admits that accomplishing these goals must include making significant cuts in Social Security and Medicare benefits for baby boomers.

If we don't, we will be condemned to some combination of inferior policies. We can raise taxes sharply over the next 15 or 20 years, roughly 50 percent from recent levels, to cover expanding old-age subsidies and existing government programs. Or we can accept permanently huge budget deficits. Even if that doesn't trigger a financial crisis, it would probably stunt economic growth and living standards. So would dramatically higher taxes. There's a final choice: deep cuts in other programs, from defense to roads to higher education.

Yet, neither political party seems interested in reducing benefits for baby boomers. Doing so, it's argued, would be "unfair" to people who had planned retirements based on existing programs. Well, yes, it would be unfair. Indeed, it's hard to imagine a worse time for cuts. Unemployment is horrendous; eroding home values and retirement accounts have depleted the elderly's wealth. Only 19 percent of present retirees are "very confident" of having enough money to live "comfortably," down from 41 percent in 2007, reports the Employee Benefit Research Institute.

But not making cuts would also be unfair to younger generations and the nation's future. We have a fairness dilemma: Having avoided these problems for decades, we must now be unfair to someone. To admit this is to demolish the moral case for leaving baby boomers alone. Baby boomers -- I'm on the leading edge -- and their promised benefits are the problem. If they're off-limits, the problem is being evaded. Together, Social Security, Medicare and Medicaid represent two-fifths of federal spending, double defense's share.

Solutions are clear. Social Security's eligibility ages (66 now for full benefits and 62 for reduced benefits) could be gradually raised. Benefits could be cut for wealthier retirees. At 65, new Medicare beneficiaries could pay some or all of their insurance costs until they reached eligibility for full Social Security benefits. Even then, better-off recipients could pay higher premiums. These and other changes should start soon -- in a few years once the recovery strengthens.

Confession: I've written columns like this for years. Little has changed. Medicare premiums for wealthier recipients (income thresholds: $85,000 for individuals, $170,000 for couples) have increased modestly, affecting about 5 percent of beneficiaries. But politicians fear making major changes. They dread an assault from the AARP, the main senior lobby, and the rage of millions of retirees and near-retirees. Public opinion is hostile. It's high on reducing deficits and low on changing the programs that create the deficits. In a Pew poll, 58 percent of respondents opposed higher Social Security eligibility ages and 64 percent rejected higher Medicare premiums.

As a society, we've recoiled from a candid discussion of public and private responsibilities for retirement. The long-ducked question is how much government should subsidize Americans for the last 20 to 30 years of their lives. Social Security and Medicare have evolved from an old-age safety net into a "middle-aged retirement system," as Eugene Steuerle of the Urban Institute puts it. In 1940, couples reaching 65 lived an average of almost 19 years, Steuerle notes. Now, the comparable figure for couples is 25 years. For Americans born today, the estimate approaches 30 years.

Overhauling Social Security and Medicare has many purposes: to extend people's working lives; to make them pay more of the costs of their own retirement, as opposed to relying on subsidies from younger Americans; to prevent spending on old-age welfare from crippling other government programs or the economy; to create a bigger constituency for cost control in health care. America's leaders have tiptoed around these issues, talking blandly about limiting "entitlements" or making proposals of such complexity that only a few "experts" understand.

Just because this is an awful time to discuss these questions does not mean they shouldn't be discussed. The longer we wait, the more acute our fairness dilemma grows. We can't deal with it unless public opinion is engaged and changed, but public opinion won't be engaged and changed unless political leaders discard their self-serving hypocrisies. The old deserve dignity, but the young deserve hope. The passive acceptance of the status quo is the path of least resistance -- and a formula for national decline.

Coburn predicts 'apocalyptic pain' if spending isn't reined in now

At The Hill:

Senate Republicans' "Dr. No" spending hawk warned Sunday that America would experience "apocalyptic pain" with 15-18 percent unemployment and the "middle class destroyed" if it didn't get its fiscal house in order.
"If we don't fix the problems in front of us everybody's going to pay a significant price," Sen. Tom Coburn (R-Okla.) said on "Fox News Sunday."
Coburn warned of the United States ending up like Greece or Ireland if proper austerity measures aren't taken, or like Spain, Italy or Japan, which are in danger of similar financial collapse.
In May, the IMF and EU agreed to extend a $145 billion bailout package to Greece. In November, a $113 billion bailout package was extended to keep Ireland afloat.
"Everyone else in the world that's doing this today is getting punished," he said of runaway spending.
Coburn said he didn't believe the lame-duck Congress got the message from voters on reining in spending, and that this next Congress should chart a much different course.
"There's well over $300 billion a year that I can lay out for you in detail that most Americans believe we should eliminate," he said, though it "remains to be seen" how much the 112th Congress will slash.
"There will not be one American that will not be called to sacrifice," Coburn said. "Those who are well-to-do will be called to sacrifice to a greater extent." 
Everything should be on the table for cost-cutting, the senator said, stressing that the U.S. needed to make those decisions first before measures are forced on America by the international business community.
Coburn said that about $50 billion a year could be cut without "truly" impacting anyone by eliminating repetitive programs and bureaucracies, such as 105 separate programs encouraging science and technology careers.
He said he hoped President Obama "gets out, holds hands with us and we make significant cuts."
"Will he help lead in making the hard choices?" Coburn said. "Will he help us fix the problems that are created by the new healthcare bill?"
The senator said that even with a bad economy, a "down payment" could be made by cutting $100-200 million from the get-go.
Otherwise, in the next decade, the U.S. could experience higher unemployment, an 8-9 percent drop in GDP, hyperinflation and a financial crisis that would hurt the poorest of the poor the most, Coburn predicted.
"The history of republics is they average about 200 years of life," and they always "rot from within" over financial issues, the Oklahoma Republican said.
"We need to go after what the real problems are, not the symptoms," despite the "naysayers" on the right and left," he said. "I'm not in the Senate for the Republican Party, I'm in the Senate for America."
Coburn confirmed that this will be his last term in the Senate. "My goal is to do what I think is the best right thing for our country," he said of his crusade against spending.

Friday, December 24, 2010

Voters elected Republicans to end Obamaism, not expand it

An editorial from The Washington Examiner:

It has probably escaped the attention of all but the few who make it their business to pay attention to such things, so we note here that a subtle but dangerous piece of revisionism about the meaning of the November election crept into the national political conversation this week.
Nowhere was that revisionism more evident than in President Obama's comments late Wednesday in lauding the just-ended 111th Congress, and in particular its lame-duck conclusion: "A lot of folks in this town predicted that after the midterm elections, Washington would be headed for more partisanship and more gridlock. And instead, this has been a season of progress for the American people. That progress ... is a reflection of the message that voters sent in November, a message that said it's time to find common ground on challenges facing our country." A few paragraphs later, it became clear that Obama wants us to believe that voters meant for congressional Democrats and Republicans to find that common ground so they can do more of what made the 111th Congress "the most productive two years that we've had in generations."
No, Mr. President, voters in 2010 did not demand bipartisan cooperation in 2011 to advance Obamacare, increase out-of-control federal spending that drove the national debt to $13.4 trillion and the annual deficit to $1.4 trillion, add thousands of bureaucrats to the government payroll even as private-sector unemployment remains near 10 percent, create hundreds more wasteful, duplicative federal programs that mainly benefit Democratic-favorite special interests like Big Labor, impose thousands more growth-killing environmental regulations, or erect multitudes of additional obstacles to achieving energy independence here at home.
To be sure, voters have lost patience with the endless partisan harangues, elitist arrogance, political corruption, and hypocritical pandering to special interests that long ago came to define Washington and its professional politicians in both parties. That was why Republicans were tossed out of congressional power in 2006. The same factors further coalesced in 2010 with disgust with Obamacare, the failed $814 billion economic stimulus program, the "Always Apologize for America" foreign policy, and exploding spending and debt. The result was that voters tossed Democrats out of control of the House and handed Republicans their deepest midterm election victory since 1938. Only in a liberal fantasy world does such an electoral result represent an electorate demanding bipartisan cooperation for more of the same.
Historians may someday describe the just-ended lame-duck session as the high-water mark of Big Government. Come Jan. 5, the reality of what voters did on Nov. 2 will become incontestably clear as a Republican House majority takes office. Then, as Sen. Tom Coburn said Wednesday, henceforth, "there will be no more big spending bills." The new year cannot come too soon.

'We the people' to open next Congress

House to read Constitution

From The Washington Times:

The Constitution frequently gets lip service in Congress, but House Republicans next year will make sure it gets a lot more than that - the new rules the incoming majority party proposed this week call for a full reading of the country's founding document on the floor of the House on Jan. 6.
The goal, backers said, is to underscore the limited-government rules the Founders imposed on Congress - and to try to bring some of those principles back into everyday legislating.
"It stems from the debate that we've had for the last two years about things like the exercise of authority in a whole host of different areas by the EPA, we've had this debate in relation to the health care bill, the cap-and-trade legislation," said Rep. Robert W. Goodlatte, Virginia Republican, who proposed the reading. "This Congress has been very aggressive in expanding the power of the federal government, and there's been a big backlash to that."
Read it all at the link-SP

America’s First Christmas How we reversed our fortunes in the Revolutionary War

From Rich Lowery at NRO:

Gen. George Washington’s army retreated from New York in ignominy in November 1776. As it moved through New Jersey, Lt. James Monroe, the future president, stood by the road and counted the troops: 3,000 left from an original force of 30,000.

In December 1776, the future of America hung on the fate of a bedraggled army barely a step ahead of annihilation.

The Americans confronted about two-thirds of the strength of the British army, and half of its navy, not to mention thousands of German mercenaries. Ron Chernow recounts in his new book, Washington: A Life, that when the British fleet showed up off New York, an American soldier marveled that it was as if “all London was afloat.”

The defense of New York was barely worthy of the name. When British troops crossed into Manhattan at Kips Bay, the Americans ran. Washington reportedly exclaimed in despair, “Are these the men with which I am to defend America?”

Later, from the New Jersey Palisades, he watched as the British took Fort Washington across the Hudson, held by 3,000 American troops, and put surrendering Americans to the sword. According to one account, Washington turned away and wept “with the tenderness of a child.”

British strategy depended on shattering American faith in the Continental Army and reconciling the rebellious colonies to the Crown. As the Americans fled to the Pennsylvania side of the Delaware River, the British occupied New Jersey and offered an amnesty to anyone declaring his loyalty. They had thousands of takers, including one signer of the Declaration of Independence.

As David Hackett Fischer emphasizes in his classic Washington’s Crossing, the American revival began spontaneously. Low on supplies, occupying troops had to forage for food. The forage turned to plunder. That fueled a grassroots rising among “the rascal peasants,” in the words of a Hessian officer.

With New Jersey boiling and expiring enlistments about to reduce his army further, Washington decided on a scheme to cross the Delaware on Christmas and surprise the Hessian garrison in Trenton. “If the raid backfired,” Chernow writes, “the war was likely over and he would be captured and killed.”

Behind schedule, Washington’s main force of 2,400 started crossing the river that night. Yes, most of them were standing up in flat-bottomed boats. Yes, there were ice floes. It wasn’t until 4 a.m. that all the men were across the river. They had nine miles still to march to Trenton in a driving storm and no chance of making it before daybreak. Washington considered calling it off, but he had already come too far.

Arriving at Trenton at 8 a.m., his spirited troops seemed “to vie with the other in pressing forward,” he wrote afterward. They surprised the Hessians, not because they were sleeping off a Christmas bender. Harried in hostile New Jersey, the Hessians had exhausted themselves on constant alert. They didn’t expect an attack in such weather, though. The battle ended quickly — 22 Hessians killed, 83 seriously wounded, and 900 captured, to two American combat deaths.

“It may be doubted whether so small a number of men ever employed so short a space of time with greater and more lasting effects upon the history of the world,” British historian George Trevelyan wrote.

The American troops found 40 hogshead of rum in the town, which temporarily blunted their effectiveness. Washington followed up soon enough with another victory at Princeton. In the space of a few weeks, the Americans killed or captured as many as 3,000 of the enemy and irreversibly changed the dynamic of the war.

David Hackett Fischer sees in that resurgence after our fortunes were at their lowest a reassuring aspect of our national character in this season of discontent: We respond when pressed. Dr. Benjamin Rush, a great supporter of the American cause, wrote: “Our republics cannot exist long in prosperity. We require adversity and appear to possess most of the republican spirit when most depressed.” May it still be so. 

Thursday, December 23, 2010

The Never-Ending "Business of Centralization" What’s wrong with placing a few limits on federal power?

From via Instapundit:

On May 27, 1935, the U.S. Supreme Court handed down its unanimous decision in the case ofSchechter Poultry Corp. v. United States. At issue was the National Industrial Recovery Act (NIRA) of 1933, a centerpiece of the New Deal’s first 100 days hailed by President Franklin Roosevelt as “the most important and far-reaching legislation ever enacted by the American Congress.”
FDR wasn’t kidding about the law’s reach. Through the creation of more than 500 “codes of fair competition,” the NIRA sought to micro-manage even the smallest and most local aspects of the American economy, mandating everything from the price of food to the cost of having a shirt hemmed. As justification for this unprecedented power grab, Congress cited its constitutional authority to “regulate commerce...among the several states.”
But the Supreme Court wasn’t having it. The NIRA must fall, Chief Justice Charles Evans Hugheswrote for the majority, otherwise there would “be virtually no limit to the federal power, and, for all practical purposes, we should have a completely centralized government.” Progressive Justice Louis Brandeis, usually a hero to the New Deal set, was equally blunt, informing White House lawyers Tommy Corcoran and Ben Cohen, “This is the end of this business of centralization, and I want you to go back and tell the president that we’re not going to let this government centralize everything.”
It’s worth remembering that noxious law and its well-deserved fate as the battle over federal power heats up once more. After all, if you listened only to the defenders of President Barack Obama’s health care plan, you might think there was something un-American about favoring any limits to the government’s regulatory reach.
Consider the response to last week’s ruling by federal Judge Henry Hudson—which held that requiring individuals to purchase health insurance from a private company exceeds congressional authority to regulate interstate commerce. Hudson’s decision would overturn the New Deal, cried John Marshall Law School professor Steven D. Schwinn. That’s “bad for us all, and bad for democracy.” Mother Joneswriter Nick Baumann was equally apoplectic, claiming the decision “shows how the court could neuter the entire federal government.” It’s “the slippery slope to the libertarian paradise,” Baumann wailed.
There’s been a similar freak out in response to the “Repeal Amendment,” another prominent effort to limit federal power. Drafted by libertarian Georgetown law professor Randy Barnett and endorsed by politicians including Virginia Attorney General Kenneth Cuccinelli and incoming House Majority Leader Eric Cantor, this would-be 28th Amendment would empower two-thirds of the states to overturn any federal law or regulation.
It’s a plan “to blow up the Constitutional system,” moaned Talking Points Memo’s Evan McMorris-Santoro. It’s a form of right-wing “radicalism in which nothing, not even the Constitution, is sacrosanct,” asserted Slate’s Dahlia Lithwick.
The truth is less terrifying. Only a profoundly unpopular law could unite two-thirds of the state legislatures in opposition. What’s so horrible about giving the states a veto power in such rare cases? Besides, as Barnett has argued, the amendment simply “reflects confidence in the collective wisdom of the men and women from diverse backgrounds, and elected by diverse constituencies, who comprise the modern legislatures of two-thirds of the states.” What’s so illiberal about that?
As for the legal challenge to the health care law, the Supreme Court is unlikely to do more than strike down the individual mandate in a narrowly crafted opinion (if it does even that); the New Deal’s flawedlegacy will almost certainly survive intact. Yet the upshot would be a long-overdue reminder to both Democrats and Republicans that the Constitution is not a blank check, that “this business of centralization” has gone too far. If that position was good enough for Justice Louis Brandeis, it should be good enough for his liberal descendants today.
Damon W. Root is an associate editor at Reason magazine.