Time for a Plan B - We keep hoping for a real discussion of the fiscal problem, but no such discussion ever seems to take place. Congress won’t act without presidential leadership, it’s said, and presidents always seem to have more important things to do. Two fuzzy questions were asked at the tail end of the third presidential debate in 2016, but by that time neither candidate had the time or inclination to address them. Presidential candidates “grilled” on debt & entitlements, 10/24/16. Similarly, the fiscal problem wasn’t satisfactorily addressed in the two previous presidential elections. See, e.g., Famous last words: my plan will cut taxes, 10/10/08. Maybe it is time to stop settling for misleading half answers to questions that were not asked very clearly in the first place. Maybe the country should demand a real debate about the coming fiscal meltdown before it is too late.
Perhaps the can will keep being kicked down the road until there is a fiscal meltdown. But we’d like to think such a catastrophe could be avoided by persuading America’s political leaders to act in the ways that are needed, e.g., cut spending selectively (not across the board), prune entitlements, reform (not raise) taxes, and start balancing the budget every year. No rocket science would be required, just applied common sense.
We don’t think fiscal visionaries need to “try harder” so much as finding ways to enhance their effectiveness. For as the saying goes (variously attributed to Mark Twain, Henry Ford, or others), “if you always do what you’ve always done, you’ll always get what you’ve always got.” Accordingly, this newsletter will highlight some new approaches that SAFE has been experimenting with as well as the continuation of efforts that seem to be working well. Coalition letters – Over the years, SAFE has attempted to pitch ideas to members of Congress – sometimes focusing on the three members from Delaware and at other times reaching out to members from other states or even all members of Congress. Such efforts are time-consuming, and SAFE’s stand-alone messages have had limited impact. Perhaps due to maintaining a high-quality website, SAFE has begun receiving invitations to join coalition letters with other conservative groups. This seems like a good way to weigh in on current issues and build SAFE’s reputation (its name and logo appear in these letters), with modest time and energy required on our part. During 2016, SAFE joined in half a dozen letters, which were also signed by 30-60 other groups including well-known players like Citizens Against Government Waste, Freedom Works, Heritage, National Taxpayers Union, etc. Here’s the list:
#Limit regulatory red tape: Americans for Prosperity letter opposing stricter ground level ozone standards from the EPA, 5/9/16; AFP letter urging occupational licensing reform to eliminate unnecessary barriers to finding jobs, 8/16/16.
#Push to “repeal and replace” GovCare: AFP letter opposing Medicare Part D proposals; that's not a rebate - it's a tax, 6/21/16; Freedom Partners letter opposing taxpayer bailouts for healthcare insurance companies, 10/12/16.
#Curtail “corporate welfare” programs: AFP letter opposing elimination of procedural restrictions on Ex-Im Bank guarantees of large loans, 9/16/16; AFP letter opposing extension of energy tax credits during the "lame duck" session, 10/28/16. Personal contact – SAFE was represented by Jim Thomen and Bill Whipple at a meeting with Senator Tom Carper on October 3. Our objective was to present some information about SAFE and have a conversation about chronic deficits & soaring debt (the fiscal problem). Handouts for the session incorporated two prior (2011 & 2013) letters to the members of Congress, which sum up SAFE’s overall position. The ensuing conversation ran 30 minutes (as scheduled), and in our view was enjoyable and constructive. Several days later, Senator Carper wrote to Thomen and Whipple (same letter, addressed individually). Like SAFE, he regards the fiscal problem as a critical challenge facing this country. He supports efforts to make taxpayer money go further in all areas and sees control of healthcare costs as particularly important. To this end, he believes that the new president and members of the new Congress should focus on perfecting the Affordable Care Act as a vehicle to not only provide healthcare coverage for more Americans but also bend the cost curve downward.
Although it appears that SAFE did not convince Senator Carper about how to tackle the fiscal problem (we would place more stress on slashing wasteful government programs, not just going after “fraud, waste and abuse,” and less on enhancing revenues), nor vice versa (we believe that perfecting the ACA would increase deficits, not reduce them), the opportunity to understand his viewpoint was appreciated. Perhaps this perspective will be helpful in framing SAFE’s future proposals re the fiscal problem, and it certainly can’t hurt. Kudos to Jim Thomen for his yeoman efforts in arranging this session!
Social media – SAFE has maintained a presence on social media for the past several years, with modestly positive results. You can sample the result by clicking the applicable logos on the SAFE website. Twitter: SAFE’s “tweets” (140 keystrokes or less) are principally descriptions of our weekly blog entries, leavened with occasional messages re other subjects and “retweets” of posts by others. We currently have 16 followers, including Tesla Motors in California (which has shown particular interest in SAFE posts re Bloom Energy). If you aren’t “following” SAFE on Twitter, please improve our numbers by signing up to do so. It’s a simple process, and need only be done once. Followers have the capability of sending messages to SAFE on Twitter or retweeting our posts to their followers.
Facebook: Your faithful scribe has added a SAFE page to his Facebook account, and at this point 12 people are signed up to “like” it. There is no hard and fast limit on length, and our posts are a bit more diverse than on Twitter. People who are registered with Facebook can post comments or ask questions on the SAFE page, although very few people are taking advantage of these capabilities. If we could get some conversations going in this space, it could potentially be a powerful communication tool. Blog comments – E-mails announcing SAFE’s weekly blog entries include a request for comments (“keep them coming!”). If feedback is received on a given entry, a “reader feedback” note is added at the start of the blog and the comments are posted at the end. Whether readers agree or disagree with SAFE on any given issue, this is their chance to chime in. An interesting diversity of opinion often emerges. See, e.g., the comments on Robust debate is the best antidote for bad thinking, 11/28/16.
Networking: US history - Sam Jacobs of ammo.com recently called our attention to their write-up about the Gadsden Flag (image of a timber rattlesnake on yellow background with “Don’t tread on me” caption). Among other things, it was interesting to learn that the inspiration for this flag may have been a political cartoon by Ben Franklin published in 1751 (at which point the senior statesman of the Revolutionary War era was probably something of a firebrand.) Here’s a link to the story. Enjoy! Networking: Barron talks turkey about monetary policy - SAFE members have lined up many speakers for the Retired Men’s Luncheon Club over the years. The most recent was economist Patrick Barron, who spoke about “negative interest rates” on November 18. A graduate of the University of Wisconsin’s School of Banking, Mr. Barron has enjoyed an extensive career in the banking industry, working both in the private sector and academia. He’s also presented lectures on monetary policy to members of the European Parliament, published numerous economic essays and columns, taught a course on Austrian economics (basically free enterprise vs. central planning) at the University of Iowa, and is a director of the Conservative Caucus of Delaware. In his talk to the RMLC, Barron began by observing that “there is no such thing as negative interest.” Why? Interest is a fee charged by lenders who are willing to forego current consumption and make their funds available for the temporary use of others. While lenders may accept a higher or lower interest rate, depending on risk and market conditions, they won’t willingly pay a charge for the privilege of making loans. While it’s true that central banks in Japan and several European countries have recently begun charging fees (e.g., 0.5% in Sweden) for bank reserves kept on deposit with them – which is meant to encourage banks to extend loans rather than holding their funds on deposit – this practice will destabilize the banking system unless banks can pass the charge on. Savers will predictably choose to hoard cash instead of paying a charge on bank deposits, so the “negative interest rate” experiment is doomed to fail. Fearing that private sector demand will not suffice to maintain full employment, Keynesian economists advocate low interest rates to stimulate the economy. An ulterior motive may be to minimize government borrowing costs and thereby facilitate deficit spending (a favored device of many politicians).
Book review – The government is financially overextended, writes Michael Tanner of the Cato Institute, and the outlook is bleak. In addition to providing an updated assessment of the fiscal problem, Tanner’s book lays several misconceptions to rest. (1) The essence of the fiscal problem is top-heavy government, which can only be alleviated by cutting spending (tax increases fuel government growth); (2) While it’s commendable to eliminate waste, fraud and abuse, the potential savings aren’t big enough; (3) Even drastic cuts in discretionary spending could only postpone the day of reckoning, although again some cuts can and should be made; (4) It won’t be possible to solve the problem without restructuring entitlement programs (Social Security, Medicare, etc.) so as to spend less money; (5) Don’t count on a “grand bargain,” the success of the 1983 Greenspan Commission in “saving Social Security” has been greatly exaggerated. Going for broke, Michael Tanner, 2015. “Pin drop” speech, Trey Gowdy, Liberty University, video (14:57), 7/6/16. If politics is the art of persuasion, how can one be persuasive? Rep. Gowdy offers some sound advice for conservatives and liberals alike. For example: Don’t insult people with different views, listen and show that you care about them.
SAFE Board Andrew Betley, (302) 239-9679 Suzie Dickson Edgar Fasig, (302) 999-0611 Dan Kerrick, treasurer, (302) 658-7101 Steve McClain, (302) 998-3910 Jerry Martin, (302) 478-5064 rycK Stout, (302) 478-9495 Bill Whipple, president, (302) 464-2688 For e-mail addresses see: link About SAFE - SAFE is a non-partisan, all-volunteer organization that was founded in 1996. We advocate smaller, more focused, lower cost government, to be achieved by cutting spending, restructuring “entitlements,” simplifying taxes, and rationalizing regulations. The SAFE agenda is promoted through: (1) Our website, including issue statements, a weekly blog, and a “Delaware Chatter” microblog; (2) Letters to the editor, public events, legislative contacts, etc., which are also posted and/or recapped on the website; (3) This quarterly newsletter, available in print (since 1996) and now electronic editions; and (4) Posts on Twitter and/or Facebook (click icons on the website to access).
SAFE dues are $10 per year for subscribers to the print edition of the newsletter and zero for electronic subscribers. Contributions are also appreciated and may be tax deductible (SAFE is a Section 501(c)(3) non-profit organization).
To join SAFE, renew your membership, or make a contribution, please print and complete this form and mail it with your check to SAFE, 115 Dungarvan Drive, Wilmington, DE 19709. Thank you!