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AgitProp from the LP we don't need. Nevertheless, they are close to the real point...

What some Rs don't get is that debt spending, easy money policies (boy do they love to chear "Mr. Bad Timing" Greenspan), grants and loan subsidies, even the basic structure of the Federal Reserve system and Fannie Mae (especially) are not truly FREE MARKET government solutions. They are statist, with a "capitalist face." Yes, they are definitely LESS destructive than socialist and LIBERAL DEM alternatives, but what animates me to write this is that so many Federalist Republicans have trouble grasping that every debt binge, credit bubble, "wage insurance" program (backed by President Bush to get the trade deal), year not dismantling in its entirety the social security program (even in the managed account form being proposed!), or home ownership grant/subsidy plan (also backed by the President as a key plank of his "compassionate" theme), are DESTRUCTIVE of prosperity and the stability of the Republic over the long run. They rationalize that they are the "good" guys because they aren't going to send the economy into a nose-dive like every two-bit socialist regime in the world, or into a period of "malaise" like Pres. Carter or any social democratic state (as in Europe). But neither are they going to get America back to the stunningly high -- by today's anemic standards -- growth and capital formation rates prior to WW1 and the creation of the modern Federal Reserve system. As ideological conservatives, the current playing at the fringes of the status quo is NOT ENOUGH.

Buchanan pointed out that AMERICA IS DYING, even as Republicans make short-term gains (you know this is short-lived, given immigration rates and demographics -- the Republicans need to GET RADICAL QUICK, WHILE IT LASTS). Many over 40 just don't "get it," because they are the primary beneficiaries of the Federalist Republican lobby. Most conservatives under 40 know exactly what I'm talking about. The economic environment -- created by Republicans and DEMs, has coerced Xers and Ys into delaying household formation and reduced birth rates sharply as a result -- those are MILLIONS OF potential conservatives and Republicans who will never see the dawn of liberty.

How? Corporate subsidies went to inflating earnings, stock prices, and income inflation (the older the worker the higher the inflation rate). Easy money, both at the Fed and Fannie Mae, created a HISTORICALLY UNIQUE economic environment favorable for capital accumulation by Baby Boomers and older folks who already had their degrees, homes, and stock portfolios. However, the massive credit bubble and easy money along with deficit spending and rising taxes resulted in pricing, rent, and real interest rates distortions of a scale not seen since WW2. Little wonder then that net capital FORMATION during that period has been anemic at best, while we have run a POTENTIAL GDP DEPRESSION (actual vs. where we would have been today if long-run norms had held up during the comparatively lagging period from the early 1970s through today).

Everyone under 35 bought in/or are buying in, at the TOP as it were, if they have gotten into the home market at all yet, paid the highest REAL entry costs into the workforce (to the point where it is now economically IRRATIONAL for many -- depending upon career choices -- to get 4-year degrees, let alone graduate degrees, a reality demonstrated by the huge surge in the % of women on campuses as more economically sensitive males substitute out), and paid the highest net tax rates, net real rental costs, and net REAL borrowing costs EVER IN THE HISTORY OF THE UNITED STATES. REPUBLICANS UNDER 40 ARE THE POOREST IN REAL GENERATIONAL TERMS OF ANY GENERATION IN OUR HISTORY. Richer than their DEM peers, yes, because they are brighter (degrees do not = intelligence) and harder-working, but nonetheless far poorer in purchasing power terms than their fathers were.

Little wonder then that business formation by those under 35 is at RECORD LOWS, while most are underemployed or unemployed. And now, we find that the current economic slowdown has been hitting under 35s harder as a % of layoffs than EVER before (very unusual, since a healthy free market would favor youth for a host of reasons).

And don't believe that circa 5.6% unemployment number -- the last time we had a downturn, in 1990, the govt. revised that number sharply upward when they got a good look at state tax returns. Unlike 1990, there are many true Republicans who refused to take unemployment insurance ON PRINCIPLE and are NOT counted on the roles even though they fit the traditional definition. They could afford to this time by drawing down on 401Ks (I know 2 who did so, even though they could have used the cash -- they made real sacrifices to BE FREE OF THE BONDAGE OF DIRTY SOCIALIST MONEY LOOTED FROM THEM IN PRIOR YEARS). In addition, this downturn's unemployment rate does NOT include the 1 million extra prisoners we have under lock and key this time vs. 1990 or the circa 2.3%!!! of the workforce taking DISABILITY (which saw a HUGE jump from under .2% before the Clinton era saw many states create programs that incentivized people to go out on disability rather than unemployment). Add it up! The real unemployment rate (compared to 1990) is closer to 9% (an economist colleague of mine thinks it is closer to 12% when you count the underemployed, as in ex-sales and finance guys doing construction or the circa 200,000 truckers with college degrees! [est. from a BLS study]).

Study after study has talked about the circumstances that Xers and Ys face, but it just hasn't dawned on elderly Republican leaders that they ARE THE FUTURE, AND ARE STRUGGLING TO SET THE STAGE FOR BATTLES IN 2020-2060. If Republican ideals are to have a chance in the fierce struggles you know are coming, we need to give younger Republicans the liberty they need to prosper today. Guess how old Madison, Jefferson, Smith, and a host of founding fathers were when LIBERTY dawned on earth -- 30s. That's why 35 was the age of reason for the presidency. Average age of Republican congressmen today?

OK, so things may change. But will they? And how much damage has already been done? The most tangible effect is on delays in household formation -- check your stats on the trend in average age for first marriage and home ownership -- now into the late 20s (that's the avg. of the distribution, many more than ever before are delaying into their late 30s!).

All of the issues cited above lead to fewer American children. Is it any wonder then that certain companies managed by globalizing elites BETRAY their countrymen by lobbying for H-1B visas and immigration?

It is NOT ENOUGH if we wish to save the Republic simply to prevent socialism and put troops on the border. Real Republicans need to address the impediments to household formation and the capital formation / power base formation of Xers and Ys -- and they are not what some Republican leaders think they are.

My recommendations, which target generational household and capital formation issues (TO START):
* The new SS savings scheme advanced by the Bush administration should NOT be structured as a gimmick to get the Federal government into stock ownership (socialistic) -- you control the allocation, but the Feds control the votes and get a direct mechanism for manipulating stock prices! Rather, the total burden of the SS/Medicaire tax (save us from Medicaire, TOO) should be cut in HALF, with resulting cuts in payouts for current recipients based on a NEEDS TEST (guys like Jack Welch should have the courage to refuse to take SS, if he doesn't -- THEN NEEDS TEST HIM), with the second half withheld to be directed into Retirement Security plans controlled entirely by the individual. Individuals should be allowed to draw on that money, and borrow against it prematurely like a 401K!!!! If we can do that starting at age 40, only the desperate will be without home, assets, or friends, family, etc. to help at 65, in which case put them on WELFARE and stop pretending the payouts are part of the SS system). The end-game should be the TOTAL ELIMINATION OF SS PAYOUTS FOR EVERYONE UNDER 40 TODAY WHEN THEY HIT RETIREMENT AGE IN 2028. THE SS SYSTEM DISAPPEARS THEN, IF WE HAVEN'T GONE BANKRUPT AS A COUNTRY LONG BEFORE THEN.

* TAX BREAKS FOR STUDENT LOAN INTEREST COSTS AND CREDIT CARD INTEREST. Homeowners (Boomers and Greatest Gen) get one, how about younger folks? The credit card deduction was removed in the mid-1980s, but how the younger consumer could use it now! Credit card debt is running up in large part because price levels have been artificially inflated by the generationally-biased income inflation (yes, boomer managers and older workers are taking a larger share of the company payroll than ever before [even though Xers and Ys are the most highly educated and over-qualified workforce in history]), credit bubble, asset bubbles, tax rate increases (Fed, state, local), subsidies, etc., etc.. Xer and ys have disposable incomes far less in purchasing power terms than any generation in the history of the US, while DEMs and REPUBs tax the tar out of them. Give them a break!

* Finally, and this one really gets me, the Republican Party, which is the Party of conservative Christians and business uber alles (spend, spend, spend, be good little consumerists even if that means buying Chinese), also REFUSES to be good Christians and regulate the tar out of banks and lending institutions that are guilty of CRIMINAL USERY. JC threw the money lenders out of the temple. So what do our Republican leaders do to the many predatory lenders targeting homeowners and young consumers -- with interest rates on some credit cards of 24% or higher? Takes their lobbying dollars! Prior to the inflationary 1970s, most states levied JAIL time, and not just civil liabilities on individuals and companies that charged interest rates higher than in the 15-18% range (only mobsters and unethical businesses would do that back then). Inflation, and Fed interest rates went way above that in the 1970s: prompting most states to bump the ceiling for CRIMINAL USERY to 24-30% depending upon the state. If you didn't know it already -- your credit card company would charge a LOT more than they do now, but they are prevented from doing so by state and federal laws. REAL profit margins on credit card debt were still below 10% in the late 70s into the mid-1980s. Then Congress wiped out the deduction, but most States NEVER CHANGED THE USERY LAWS. A clever game by the predators -- by eliminating the deduction they eliminated pressure on governments to keep CRIMINAL USERY ceilings reasonable (the more profitable the credit card companies have become, they no longer had to worry about tax revenues falling as people took higher deductions). This relationship helps to illustrate yet another DIRECT CORPORATE SUBSIDY. The entire credit card industry is a creature of the regulatory environment, and it always will be, because the "natural"/market interest rate for lending not based on tangible assets/receivables is the worst instinct of the lender (heck, most credit card companies don't even bother to look at net worth). Today, credit card companies have carrying costs of 2% on their funds, and are raking in fees at REAL avg. rates of 18-20%. No wonder their profit margins are are historic highs (though peaking, while the Fed is running out of room to drop short-term rates), while bankruptcy numbers are soaring!!!! It's the fault of the credit card companies!!! The Republican response -- the bankruptcy reform act. Talk about money buying politicians....How about civilizing credit card lending again? Dear Mr. President, if you want this economy to get a real KICK-START, just reinstitute the credit card interest deduction and bring sanity and morality back to interest rate caps!!!!!!! The Fed is almost out of bullets (it's starting to remind me of Japan) and we are heading into a war...give consumers, younger ones especially, a tax break they will LOVE you for (they will vote and send money your way for campaigns in numbers that will DWARF that offered by the credit card companies).