A Radical Solution to our Fiscal Crisis

I have been writing for decades, but I have probably used the word "crisis" more in the last two years in my articles than in all the other years combined. There is a reason for that, the use of such hyperbole gets old. I think such words should be used with restraint or they will eventually fall upon deaf ears. Unfortunately, any word short of "crisis" simply does not make the grade in the times we live in today. The government is doing more (poorly) and spending more (than ever) and it is bankrupting our futures and the futures of those who will not even be born for several generations to come.

Currently the national debt is now growing at a rate annually that originally took almost 200 years for our country to reach for the first time. We are a nation in financial ruin and we continue to spend as if money grew on trees. Desperate times call for desperate measures. It is time for Americans to seriously consider the damage that comes from mob rule.

According to the government's own statistics, less than half of all Americans even pay taxes. This is significant because we now have a country where the majority is lulled into sleep as the minority is essentially oppressed by those who have "no skin" in the political process. They have absolutely no problem with spending growing out of control because whatever they receive is with minimum burden on them.

Meanwhile USA Today reports that well over half of the population receives direct assistance of various types from the federal government. This includes perennial welfare moms and the super rich who enjoy government bailouts.

The terrible situation we are in begs for radical change. The Constitutional type. In the early days of the Republic, people had to be property owners and even taxpayers before they were allowed to vote. Furthermore, the federal government was very limited in what it could do. With only seventeen enumerated powers and those voting having a vested interest, frugal government was much easier to achieve and maintain.

The principles of frugal government can be found on the micro level. If a board of directors of an organization or business has a vote on an item that directly benefits one of those decision makers, that person is expected to abstain. It only makes sense. If that did not happen there would be cries of impropriety and would plant the seeds of financial ruin for any group or company.

The United States is going to have to take a similar approach to solve its financial problems. The classical economist John Stuart Mill advocated the bold proposition that, if people received any government assistance, they would have to turn in their right to vote until they were no longer on the government dole. This policy would apply to the mega rich, the very poor and everyone in between who were getting direct government assistance. People seem to be concerned about "influence peddling." They warn about lobbyists and political action committees throwing money at politicians in order to get their vote on key issues. Yet, influence peddling runs both ways -- it is a two sided coin. Politicians who want to get reelected make all sorts of promises of money, goods, or services in order to buy votes. If the voter became disenfranchised while on the government's budget, politicians would have to find other ways of getting our votes. Maybe they would boast about how frugal they are in the way they represent the voters. A radical approach to government? Maybe, but it seems to me it could be long overdue.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Lessons Obama Should learn from FDR

We are familiar with the various quotes about the lessons of history. Bottom line, if we do not learn them, we will find ourselves reliving them. Since the election of Barack Obama to the President of the United States, we have seen this Administration try an approach to government that we have seen before and we have plenty of evidence as to how effective it is.

During the Great Depression, Franklin Roosevelt moved to have the government take over huge amounts of the economy after the nation experienced a meltdown.. The man he hired to over see that project was Secretary of Treasury Henry Morgenthou, Jr. Morgenthou was both a trusted adviser to Roosevelt and one of his very close friends.

Morgenthou was called on to take an ambitious approach to the nation's economic problems with a primary objective of relieving the pain of unemployment caused by the protracted decline in the economy. That approach was centered on massive increases in government spending and intervention in a manner never seen in our nation's year. After eight years of this expansion, the Secretary had the following to say to Congressional leaders: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"

During the Great Depression, the government assumed a larger role in "helping" people with their poverty through politically driven programs that rewarded battle ground states that money could influence into the Democrat column. Furthermore, by taking away the personal accountability that came from state run agencies and private organizations, the government's approach led to chronic unemployment and the crushing of the spirit of people who simply wanted a job. Most disheartingly in the end, it didn't work. After a decade of throwing money at the problem, nothing had fundamentally changed.

Albert Einstein is credited with saying that the definition of insanity is doing the same thing over and over again and expecting different results. People are the same now as they were back in the 1930s. Human nature hasn't changed. Free markets and individual responsibility works and government does not. Let's hope we learn that lesson sooner than Henry Morgenthau.

For additional lessons from the Great Depression, consider New Deal or Raw Deal? by economic historian Burt Folsom.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

How Much Will Barack Obama Pay for Your Vote?

Free meals and movies have long been illegal devices to get your vote, but Barack Obama has figured out how to persuade you to give him his vote -- his "unique" tax cut program. It is against the law for him to buy your vote, so in a stroke of genius he is going to use "OPM" -- other people's money -- the tax system. He is not even subtle about it, but his campaign has created a "calculator" for you to be able to see exactly how much you will get back from Barack Obama.

If you are in the top 5 percent, you are not going to see savings. In fact, these work horses who saddle the majority of the tax burden are going to be asked to give more. Much more. Herbert Hoover taught us that tax increases during a recession creates a depression. This doesn't appear to be a lesson candidate Obama hasn't learned.

There is nothing subtle about Obama's calculator. You put in a few pieces of basic information and you find out both how much you will get from the Democrats if they win and how much you will get from McCain in his plan. Since approximately half of the population doesn't pay income taxes and McCain has deemed money going back to groups that fit this description as "welfare," you will not find much (if any) return from the Republican. Obama, on the other hand, wants the bulk of the "tax cut" to go to those who don't pay taxes. I know, it isn't easy to understand.

One of the most common concerns we have today is "influence peddling" by organizations trying to control public policy. But influence peddling is a two headed coin, in my opinion. The other side is made up of politicians like Barack Obama who want to spend money in order to buy votes. Barack Obama's "tax cut" seems to be an excellent example of such an approach.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.