The American Spectator : Down With Obamunism

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Down With Obamunism

By Peter Ferrara on 1.13.10 @ 6:09AM

The opportunity is now there to downsize government -- and for starters that means rejecting any talk of a Deficit Commission.

(Page 3 of 3)

Under the revolutionary incentives of these reforms, state officials across the country reversed themselves to assiduously press welfare recipients to go to work. As a result, close to 60% of those formerly served under the old AFDC program went to work and got off welfare. Their incomes consequently increased and child poverty declined.

These same reforms can and should be extended to the 85 other federal, means-tested, welfare programs, including Medicaid, Food Stamps, and housing subsidies, with sweeping savings as a result. With states controlling all this funding along with the complete freedom to innovate and the proper incentives to do so, they can adopt new entirely work based welfare systems that would end poverty in America, unlike the failed liberal War on Poverty. (Note: the last liberal that won a war was FDR, two-thirds of a century ago. They can't do it anymore).

In regard to Social Security, workers should each be given the freedom to choose to substitute personal savings, investment and insurance accounts for some of their Social Security to start. They would each have the choice of shifting some of their payroll taxes to finance such accounts, with the accounts substituting to a proportionate degree for some of their future Social Security benefits. The accounts would be expanded over time to cover all of the benefits provided by Social Security, with life insurance to cover the survivors benefits, and disability insurance to cover the disability benefits.

Because long-term investment returns are so much higher than what Social Security even promises let alone what it can pay (because Social Security does not make any actual investment), workers would actually enjoy much higher benefits through these accounts. These benefits would be backed by a federal safety net guarantee assuring that everyone would get at least the benefits promised by Social Security under current law. But such accounts would also eliminate all Social Security deficits, as the government spending on those benefits is shifted to the accounts instead, as the Chief Actuary of Social Security has confirmed in official scores. This also results in a massive, unprecedented reduction in government spending as a result.

The accounts can then be expanded to cover the Medicare payroll tax, with the resulting benefits used to purchase private health insurance. The general revenues currently used for Medicare would be used for means-tested supplements to ensure that all seniors could afford essential health coverage. These general revenue expenditures would be limited to grow no faster than the rate of economic growth, so that they would not increase federal spending as a percent of GDP.

All Social Security and Medicare benefits would continue to be paid to seniors in full throughout the transition to this personal account system, with the government providing all necessary financing. That transition financing would be covered by the spending reductions discussed above.

These reforms would together reduce federal spending below 15% of GDP. The New Revolution spawned in reaction to the Obamunista socialist throwback power grab makes such sweeping reform possible. This should be the Tea Party agenda. Weak-kneed Republicans need to realize that they have one more chance to get control of Big Government, before they are consigned to the dustbin of history themselves. The above agenda is that chance. Buck up. The grassroots will have your back this time.

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topics:
Big Government, Limited Government

About the Author

Peter Ferrara is Senior Fellow at the Carleson Center for Public Policy, Director of Entitlement and Budget Policy for the Heartland Institute, and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is the author of America’s Ticking Bankruptcy Bomb, now available from HarperCollins.

Letter to the Editor View all comments (20) | Leave a comment

Ryan| 1.13.10 @ 8:22AM

Great summary of what should be done. Theoretically, we were supposed to get a lot of this in 2000-2008, but we had a President that kowtowed to the left far too much.

Indiana Alex| 1.13.10 @ 8:37AM

Personal retirement accounts would represent the biggest transfer of wealth from government to the working poor in the history of our economy.

I mention the working poor as they are most unlikely to have 401k or pensions.

Since many die before they reach Social Security age, they would acutally have assets to leave behind rather than a government promise.

crookedwren| 1.13.10 @ 9:14AM

The downside: whatever will my accountant do in March and April?

Wayne Farrar, CFP, CPA| 1.13.10 @ 12:10PM

crookedwren,

Don't worry about those of us who prepare taxes for a living. Too much of our nation's intellectual talent is currently diverted into nonproductive activities such as helping the true producers comply with government regulations. I can assure you that any CPA worth his salt would be riding high in the economic boom triggered by these policy changes.

Grant Johnson| 1.13.10 @ 10:00AM

Amen.
You have perfectly captured the agenda we need to pursue if we are to retain freedom and prosperity in this country.
It is also a perfect summary of the agenda the Republicans must truly embrace (as opposed to paying lip service) if they are to retain relevance. Democrats have fouled things up so badly the last year or three that Republicans may get another chance despite themselves, but they better understand that chance will be probationary. If they break faith again, they will go the way of the Whigs and a new party will eventually emerge to voice genuine opposition to the Democrats=Socialists.
Unfortunately in the time it will take for a new party to coalesce, my country may be irretrievably lost.

Kenneth Allen| 1.13.10 @ 11:45AM

Sell off surplus federal lands that are not part of national parks or historic preservation? I assume this would mean selling off all National Forests (and grasslands etc). Are you nuts? This would be the largest land sale in US history - about 10% of the total US land area, an area about the size of Texas.

SCM| 1.13.10 @ 12:26PM

......and the problem with this is what?

Howard| 1.13.10 @ 12:42PM

Nice dream! Unfortunately it will never come to pass. There is too much power concentrated in Washington. The lobbyist influence is too vast. Look, even a "capitalist" outfit like GE has been performing fellatio on the Democrats. They are looking for a managed economy (as long as they have no competition). We need to chip away on a hand full of vital issues and limit the rise of government. Bringing it back to 1920's levels will not happen. But, we need to stop Obama, Reid & Pelosi sooner than later!

Grant Johnson| 1.13.10 @ 1:27PM

People will say that these principles are not realistic and achievable. They are probably right in a technical, absolute sense.
However, these are essential to making any progress (and to gaining the trust of a fiscally conservative majority). Without these types of bedrock reality check principles, you end up voting for the $800 billion stimulus measure because, after all, you were able to negotiate a compromise smaller than the $1 trillion plus that was initially proposed. By contrast, someone fully focused on these ideals would recognize that 80% of a bad idea (or 50% or 1%) is still a bad idea.
The stimulus and a lot of other fooling legislation could have been stopped by a Republican party guided by these principles.

led mining light| 11.25.10 @ 1:56AM

For most Americans, Obama doesn't seem to be giving them something they don't have, but instead to be taking away something they already value.

Oldefarte| 1.13.10 @ 2:25PM

Great article and information, Peter! Bravo, and thank you! What is absolutely essential initially though is for the American taxpayer-voters, tea-partiers, etc to defeat any/all Democrats [and yes Republicans also] who have been responsible for our deficit/debt to get to the point of destruction that it now is. All of us have to vote for any/all conservatives who pledge/promise to begin abiding by the will of the people who elected them, who pay their salaries; instead of those who head their respective political parties in DC. Once we get the right political leaders in place in Washington, then and only then can we begin to institute the intelligent ideas that Peter has put forth here. It is useless and moronic to think that we have a chance of success toward accompolishing his suggested procedures, if the current bunch of liberal, socialists in DC are still in charge!!!!!

bluecollarbytes| 1.13.10 @ 8:58PM

article: "Add in state and local government spending, and total government spending will be well over 50% of GDP. Counting the Obama spending increases and the negative effects on the economy from all this Overwhelming Government, total government spending will grow to over 60% of GDP."

Showing that where we're headed is exactly the opposite of govt by/for the people. The very purpose of life itself will become to live in order to fund govt, which dovetails with Obama's earth-centered religion. I wonder if 60% of GDP would even cover all the growing Leftist demands of the future. What we're seeing today is just the bare minimum of their desires.

Mike| 1.13.10 @ 10:15PM

the Obama explosion in Big Government.

Lets review the bidding.

Who started two wars and did not include the cost of those wars in the federal budget?

Who created the HSA, a gigantic federal bureaucracy, when he promise to bring us small government?

Who sponsored the drug prescription program without a word about paying for it?

Who squandered the budget surplus and left us witgh an enormous federal deficit.

Bush.

And Ferrara is talking about the explosion of Big Government. You are a joke Ferrara. Too little, too late, Pal

Yosemeti Sam| 1.14.10 @ 2:26AM

Now, now - liberals.

Complaints about Iraq and Afghanistan - wars?

What you all are advocating is - best to have left those of those countries to the barbarian mercies
of 'same' - with their guns and medieval methods
of terrorized subjugation.

What empathy! What courseness! What phoney
baloney humanism!

Get thee under your rocks!

dfa| 1.14.10 @ 4:13AM

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