“I’m hoping for such a clean sweep of Rino’s and Rats by 2012 America can not only repeal this but dismantle a whole bunch more of the welfare state.” ~ Nateman
Me to!
Check out the New Zealand solution:
Date: Fri, 7 May 2010 10:56:46 -0400 (EDT)
From: Forbes Newsletters newsletters@forbes.com
To: Matchett-PI
Subject: The Gilder Friday Letter v.429.0
http://www.gilder.com/ | Issue 429.0/May 7, 2010
The Week /CuttingGovernment is All Upside
GILDER TELECOSM FORUM MEMBER # 1(05/05/10):
Marc Farber (Bloomberg): I can tell you, all governments will eventually have to be bailed out in the western world. It’s either going to be through money printing, as I think, or default. They are over indebted, especially if you consider the unfunded liabilities like future pensions, social security, medicare, medicaid and so forth.
It does not add up, they will all default or they will all print money. But the outcome won`t be pretty, that I can assure you.
GEORGE GILDER, Gilder Telecosm Forum (05/05/10): Or someone will try the New Zealand solution, the only real remedy, imposed by a Labor government two decades ago, when they shocked everyone by zeroing out all government programs. The result was an amazing boom, particularly in agriculture, where huge farm subsidies and regulations were abolished and the entire department dismantled. New Zealand moved from being a massive net importer of food to provoking Wisconsin to protect its dairy products from unfair competition from down under. Abolishing government programs turned out to be all upside.
This is not a problem. It is an opportunity. The key to doing it is rescission of pensions extorted from the government by public sector unions, which are unconstitutional self-dealers trading their campaign agitprop and contributions for runaway benefits and absurd early retirements.
GILDER TELECOSM FORUM MEMBER # 1(05/05/10): Any recommended reading on the New Zealand solution?
GEORGE GILDER, Gilder Telecosm Forum (05/05/10): The entire saga was told in detail in a Heritage Foundation tape that I gave to Steve Forbes (and he lost without mentioning). I bet Heritage could track it down and has paper records of the contents. It is the best libertarian story ever told. It is definitely worth chasing down. They zeroed out all the departments and all spending had to be justified from scratch. It changed New Zealand from a Third World basket case into a thriving economy for several decades.
Everybody expected disasters, but cutting government (except defense) is all upside.
Imagine zeroing out the department of agriculture, department of commerce, department of education, department of labor, etc. etc. Think anything bad would happen?
Friday Feature / Washington Possessed
DAVID MALPASS, Forbes.com: My Nov. 10, 2008 column warned that big government was walking away as the knockout winner over the private sector in the financial crisis. But it’s going much further than I’d feared. The federal government has accelerated its takeover of the economy, adding a mega-trillion-dollar health care entitlement, despite the damage to health care and the national debt this will cause. Washington is frenetically cutting unfunded checks. Capital is being channeled away from small businesses toward big government. Looming on the horizon is the bailout of state and local governments, which will concentrate more and more of the nation’s debt onto the diminishing base of federal taxpayers.
Washington’s excess spending is now running $1.5 trillion annually, and both the Treasury and the Federal Reserve are relying heavily on short-term credits for funding. The marketable national debt has ballooned to more than $8 trillion, but wait ... the Obama Administration has budgeted an increase to $20 trillion over the next few years, bringing it to more than 90% of GDP. Even that huge sum—$100,000 for every working-age American—doesn’t include the rapidly escalating debts of Fannie Mae (FNM) and Freddie Mac (FRE) or the government’s unfunded liabilities for Social Security and Medicare. And to keep the debt estimate down the budgeteers are making wishful assumptions that millions of high-paying jobs will reappear and health care reform will pay for itself.
Every month Congress adds more federal powers and debt, voting as if its allegiance were to Washington, city of cranes, instead of to the voters and taxpayers. The financial services reform bill does little to reopen lending to small businesses but adds huge new federal powers, including the imposition of corporate taxes, to create a giant new bailout fund (think Son of Tarp). And the President’s ten-year $45 trillion spending budget makes crystal clear Washington’s hunger for a value-added tax. After the health care law it’s the next huge step in Washington’s expansion.
Given temporarily low federal borrowing costs, the government can concentrate the nation’s debt onto federal taxpayers without properly recording the cost. This process is stimulative in the short run—more debt for less cost—but is clearly dangerous in the longer term. The government is not only choosing health care treatments and mortgage clauses but also has taken responsibility for allocating credit throughout the economy—this state versus that state, this industry versus that one.
Delaying the day of reckoning, the Fed has committed its institutional credibility to monetary supercharging, as it did in 2003. By arbitrarily pegging the interest rate near zero for big banks and the Treasury, we’re living in a surreal framework in which the more federal debt, the better for GDP. Except that there are three huge losers: savers earning 0%, small businesses not hooked into zero-rate loans and future taxpayers saddled with the debt when interest rates zoom . . .
HERE: http://www.freerepublic.com/focus/news/2511847/posts?page=14#14
sfl