Showing posts with label Pelosi. Show all posts
Showing posts with label Pelosi. Show all posts

Monday, April 12, 2010

SEIU invested tens of millions on Obama and DemCare in order to replenish its woefully underfunded pensions -- on your dime

The SEIU spent $85 million on Barack Obama's campaign and millions more on pushing for DemCare. Among its biggest rewards will be millions of medical civil servants -- and millions of new, dues-paying members. The Wall Street Journal's September 10, 2009 op-ed ("Read the Union Health-Care Label -- Get ready for Detroit-style labor relations in our hospitals"), describes state-run health care as opening "the door to implement forced unionization schemes" by reclassifying in-home health-care (and child-care) contractors as union members.

But why is the SEIU so desperate for state-run health care? Put simply, union bosses appear to be underfunding their members' pensions, deliberately and systematically, while enriching their own plans. And someone has to make up the shortfall. That someone is you.

Of all major unions, the SEIU appears to be one of the worst at the practice of underfunding its retirement obligations. Aside from being a major supporter of the far left Democrat agenda, it is tied to ACORN and its variants, the the disgraced posse of community agitators. So the act of skirting ethical, legal and moral hurdles doesn't appear to be a stumbling block for this crew.

The Rank Hypocrisy of the SEIU

The SEIU argues on its website that 401(K) plans are bad for workers. It claims that defined benefit funds are superior tools to assure workers' pensions. It would seem reasonable that the SEIU, then, would ensure that its 2 million members would benefit from generous, well-funded pensions.

But that is not the case -- at least for rank-and-file union members. ATR reports that:

• In 2006, the average SEIU members' pension plan was only 82% funded with assets of about $19,000 per person.
• Separate funds for employees of the SEIU itself were 105% funded, with about $85,000 per person.
• And funds covering SEIU officers and employees were 123% funded, holding roughly $80,000 per person.

However, only ten years earlier, in 1996, the SEIU National Industry Pension Fund possessed nearly 110% of the funds it would need for all of its pension obligations.

The Reason for the Disconnect Between Union Bosses and Members

So why are the union bosses' pension plans overfunded at 123% and the rank & file union members plans are near "endangered status" at 82%?

While the union blames market conditions, actual fund performance metrics demonstrate that this is not the case. It appears, instead, that the playing field has been tilted to reward the union bosses and union employees at the expense of the rank-and-file.

The problem exists not only in the SEIU's national plans. The U.S. Chamber of Commerce revealed that 13 SEIU local pension plans were less than 80% funded. Six were less than 65% funded, clearly in a danger zone.

For example, the Massachusetts Service Employees Pension Fund fell from nearly 110% to 70% funded in 10 years; and the SEIU 1199 Upstate Pension Fund fell from 115% to 75% since its inception in 1999.

To regain some semblance of fiscal stability, the SEIU has wagered heavily on forcing other employees to help fund its shattered pension reserves. That was the motivation behind the Employee Free Choice Act (EFCA) ("Card Check"), a major Democrat initiative for 2009, and one on which the SEIU spent tens of millions of its members' money.

Since Card Check is in serious trouble with lawmakers, state-run health care must suffice.

• The public option could force hospital and other health care workers into underfunded pensions, putting their retirements at risk
• The average union pension has resources to cover only 62% of what is owed to participants
• Less than one in every 160 union-represented workers is covered by a union pension with required assets
• The PBGC already supports upwards of 30,000 pension plans
• Pension Benefit Guarantee Corporation (PBGC), the governmental pension insurer, will assume $86.7 billion in liabilities by 2015
• The PBGC limits the benefits in multi-employer plans to $13,000 a year per retiree, compared with roughly $52,000 for single-employer plans.
• In 2007, the PBGC reported a deficit of $955 million, a $216 million increase from the previous year
• In July of 2009, the PBGC agreed to take on $6.2 billion in pension liabilities from bankrupt auto supplier Delphi Corp

DemCare was a Democrat payoff to union bosses, who fear what will happen to them when the massive pension disparity between workers and bosses becomes widely known.

DemCare was designed, first and foremost, to reward the SEIU. It's not about health care. It's about the redistribution of tax dollars from your wallet into the unions' coffers. And, no matter how these central planners, these masterminds, swirl the money around, their unfunded pension liabilities will crush taxpayers as certainly as night follows day.

Saturday, April 10, 2010

Bank for International Settlements: Brace for Impact

The adjective 'sobering' doesn't do the latest Bank for International Settlements (BIS) working paper (PDF) justice. The executive summary of the paper, which is entitled The future of public debt: prospects and implications, concludes with a recommendation that is certain not to be heeded by the current administration.

Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable. Drastic measures are necessary to check the rapid growth of current and future liabilities of governments...

Introduction

2008's historic financial meltdown led to industrialized countries taking on an unprecedented amount of public debt. According to the OECD, public sector debt will top 100% of GDP in 2011 for all industrialized countries. This level has never been seen during peacetime.

Worse, these projections ignore the "off-the-books" obligations -- Social Security and Medicare, for example -- which are many times the size of the documented debt. Given the aging of key demographics in these countries, "there is no definite and comprehensive account of the unfunded, contingent liabilities that governments currently have accumulated."

The current interest rate environment is, in historical terms, exceptionally low. The question BIS grapples with is a critical one: given governments' traditional unwillingness to implement tough frugality measures, when will investors begin demanding higher interest rates that correspond to the real risks associated with out-of-control spending?

When this occurs, the game is up. Higher interest rates to higher debt levels, which lead to higher interest rates, and so on. The question is when, not if, we enter that particular vortex.

The facts

The acceleration in accumulated public debt should be of tantamount concern, according to BIS.

A key fact emerging from the table is that over the past three years public debt has grown rapidly in countries where it had remained relatively low before the crisis. This group of countries includes not only the United States and the United Kingdom but also Spain and Ireland..

...overall fiscal balances have been deteriorating sharply – by 20–30 percentage points of GDP in just three years. And, unless action is taken almost immediately, there is little hope that these deficits will decline significantly in 2011. Even more worrying is the fact that most of the projected deficits are structural rather than cyclical in nature...

Table 1 points to a rather stunning fact: by 2011, U.S. public debt will have increased from 62% of GDP to 100% in just four years. When measured against the other countries in the table, the U.S. will move from seventh highest debt load to fourth, trailing only Japan, Italy and -- drum roll, please -- Greece.

Even more concerning is the fact that the fiscal policy of increased spending unhappily coincides with accelerating -- and unfunded -- spending tied to social programs for the elderly. In the case of the U.S., Social Security and Medicare represent huge expenditures that will increase dramatically as the baby boomer generation retires en masse.

Further compounding the problem is the rise in per capita health care costs in all industrialized countries -- including those with completely socialized delivery of medical services.

A 2007 study -- one of the few that attempted to estimate the total debt situation for seven major countries -- and determined, on average, that each country would have to improve their spending-to-revenue ratio by 4.5% of GDP to make good on their debts. The U.S. was far worse than average -- and, remember, this is 2005 data -- because it required a roughly 7% of GDP budget fix. In today's dollars, that would mean cutting about a trillion dollars in spending annually (or bringing in a trillion more revenue). The situation is far more dire today.

The future public debt trajectory

BIS also attempts to do 30-year projects for the debt/GDP ratio for a dozen major economies: Austria, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, the United Kingdom and the United States.

...in our baseline scenario, conventionally computed deficits will rise precipitously. Unless the stance of fiscal policy changes, or age-related spending is cut, by 2020 the primary deficit/GDP ratio will rise to 13% in Ireland; 8–10% in Japan, Spain, the United Kingdom and the United States; and 3–7% in Austria, Germany, Greece, the Netherlands and Portugal. Only in Italy do these policy settings keep the primary deficits relatively well contained – a consequence of the fact that the country entered the crisis with a nearly balanced budget and did not implement any real stimulus over the past several years.

...in the baseline scenario, debt/GDP ratios rise rapidly in the next decade, exceeding 300% of GDP in Japan; 200% in the United Kingdom; and 150% in Belgium, France, Ireland, Greece, Italy and the United States. And, as is clear from the slope of the line, without a change in policy, the path is unstable.

...Seeing that the status quo is untenable, countries are embarking on fiscal consolidation plans. In the United States, the aim is to bring the total federal budget deficit down from 11% to 4% of GDP by 2015... [but the] consolidations along the lines currently being discussed will not be sufficient to ensure that debt levels remain within reasonable bounds over the next several decades.

...An alternative to traditional spending cuts and revenue increases is to change the promises that are as yet unmet. Here, that means embarking on the politically treacherous task of cutting future age-related liabilities. With this possibility in mind, we construct a third scenario that combines gradual fiscal improvement with a freezing of age-related spending-to-GDP at the projected level for 2011. The blue line in Graph 4 shows the consequences of this draconian policy. Given its severity, the result is no surprise: what was a rising debt/GDP ratio reverses course and starts heading down in Austria, Germany and the Netherlands. In several others, the policy yields a significant slowdown in debt accumulation. Interestingly, in France, Ireland, the United Kingdom and the United States, even this policy is not sufficient to bring rising debt under control.

Given that, BIS asks the question: just what level of spending reductions would be necessary for these countries to achieve economic stability?

For the U.S., 8.1% of GDP must be either cut or found in revenue. In today's dollars, this represents roughly $1.2 trillion -- coincidentally, that's roughly the total amount of the Democrat Stimulus and Omnibus spending packages of 2009.

Each and every year, for the next five years, the U.S. must rein in spending by this amount. And the longer it is put off, the more painful it will be.

Worse still, BIS asserts that interest rates are certain to rise for all of these countries as investors demand higher risk premia. The implications are brutal: as higher amounts of public debt come due, ever larger percentages of an economy's production are dedicated to servicing debt.

The confluence of these factors imply increased taxes, which suppress the prospects for real economic growth. According to BIS, taxes crowd out productive private capital.

Not only that, but a vicious cycle soon emerges: "a persistent slowdown in the rate of economic growth."

The vortex of debt sucks the life from the private sector and reduces economic vigor and opportunity.

Conclusion

BIS offers several important takeaways:

• The fiscal problems facing the U.S. and other industrialized countries are far worse than they appear.

As frightening as it is to consider public debt increasing to more than 100% of GDP, an even greater danger arises from a rapidly ageing population. The related unfunded liabilities are large and growing, and should be a central part of today’s long-term fiscal planning.

Unfortunately, today's Democrats are ignoring the looming disaster and -- worse still -- ladling on a brand new and completely unaffordable entitlement.

• Second, the amount of debt that must be financed is outrageously high -- and interest rates are certain to rise as reality confronts bond investors.

• Third, the persistently high levels of debt will severely harm the private sector, which reduces the prospects for long-term growth and recovery. As the debt/GDP ratio approaches the 100% limit, economic instability becomes a distinct possibility.

• Long-term fiscal imbalances (spending far beyond one's means) "pose significant risk" to the entire monetary system. Rampant inflation -- perhaps even hyperinflation -- are possible outcomes as debt is monetized (money is printed to "purchase" the debt) or inflation is outright encouraged by a government that wishes to reduce its real outlays.

Sensible measures -- like raising minimum ages for Social Security, Medicare and Medicaid benefits -- are required in short order. The importance of the November elections -- and restoring fiscal sanity to the country -- can not be overstated.


Global Warming: Two Photos That Prove It's a Scam

Gee, that Arctic sea ice really seems to have thinned out over the last thirty years. Not.


Another warmist in the Arctic: GE sponsors 15-year-old on polar trip... Shortly after twice reporting a temperature of -34 C, he suggests that the ice is “falling apart” around him.

Parker Liautaud, 15 years old, is reporting on his progress skiing his way to the North Pole. He has made his goal to become the youngest person to ski to the North Pole, and to use that attempt to bring greater awareness to the urgent environmental issues of the arctic.

And more importantly for his purpose of letting the world see the ravages of global warming on the arctic - There was a lot of open water today. It really shows what’s been going on in the Arctic – it’s falling apart. Right now we’re camping on this patch of old ice, but all around us is open water, broken and thin ice. To our north there’s a massive pan of very thin ice. Everything is freshly frozen, if not open.


Twitter / Parker Liautaud: Temp -34, Windchill -42. W ... Temp -34, Windchill -42. We did about 11 Nm today, it was a really good day. We have about 35 Nm left, and about 5 before we’re half way. 3:00 PM Apr 4th via API [His previous tweet also reported a temperature of -34]

...I always like to encourage young minds in science, but this is just a glorified field trip with a guide. What a bunch of suckers GE is for paying for such an expedition.

The ice from Cryosphere Today looks better than 30 years ago.

GE is anything but a bunch of suckers, Anthony. They appear to be little more than crony capitalists, taking advantage of the new swing to Statism by the Democrats in power. They're doing so using nationalized health care and the environment, for starters.

And, in the case of global warming climate change, not only is it economically disastrous for the United States, the entire concept is a shameless scam designed to -- surprise! -- redistribute wealth.

The satellite photos tell us everything we need to know.


Hat tip: American Digest and TAB. Linked by: Tom Nelson. Thanks!

Friday, April 09, 2010

Set the Wayback Machine to 'Depression Era', Mr. Peabody!

It's another Obama record!

With tax day fast approaching, it's worth discussing the current state of revenues in the United States. Last year, revenue collection hit a 60-year record low of 14.8 percent of GDP -- which was enough to pay for only 60% of what we spent...

Overall, the income tax is quite progressive -- the top fifth of earners pay over 90% of taxes and the top percentiles pays 36%. In 2009, these earners paid income taxes equal to 13% and 18% of their incomes, respectively. By comparison, the average effective income tax rate is 8%, and nearly half of all taxpayers had no (or negative) net income tax burden at all. Payroll taxes are far flatter, and in fact are regressive on the top-end since workers pay no Social Security payroll tax on income over $107,000.

Whether the tax code should be more or less progressive is an open question, depending what one believes to be the appropriate distribution of income and the extent to which they want to use the tax code (or public policy more generally) to get there.

Distributional issues aide, though, most experts believe the current code is in many ways broken. The complexity of the code makes tax preparation costly in terms of time and money; hundreds of deductions, credits, and exclusions narrow the tax base and distort behavior; and higher than necessary corporate and individual rates tend to discourage work and investment, while reducing international competitiveness. Meanwhile, we still have no solution for dealing with the Alternative Minimum Tax, which is "patched" each year so as not to hit middle-class earners. And at the end of 2010, all of the 2001/2003 tax cuts are scheduled to expire.

Of course, one way to achieve some level of fiscal sanity is to outlaw public sector unions; fire the EPA, the Department of Commerce, the Department of Education, the Department of Labor and a few other useless agencies; and downsize Congressional staffers to one apiece.

And there is only one fiscal roadmap I've seen that really seems achievable.


 

'Brave, brave Sir Stupak ran away. Bravely ran away, away. When danger reared it's ugly head, he bravely turned his tail and fled.'

The Tea Party Express is celebrating the retirement of Bart Stupak.

Bravely bold Sir Stupak
Rode forth from Marquette
He was not afraid to fold
Oh Brave Sir Stupak
He was not at all afraid to be mocked in nasty ways
Brave, Brave, Brave Brave Sir Stupak.

He was not in the least bit scared to be bribed
Or to have his fealty questioned, and his elbow twisted
To have his integrity jeered and his honesty burned away
And his veracity derided and mangled, Brave Sir Stupak.

Brave Sir Stupak ran away. Bravely ran away, away.
When a tough vote reared its ugly head, He bravely turned his tail and fled.
Yes Brave Sir Stupak turned about, He gallantly chickened out.

Bravely taking to his feet, He beat a very brave retreat.
Oh bravest of the brave, Sir Stupak.

I hear what cinched Stupak's decision was President Obama's promise to campaign for him.

 

Thursday, April 08, 2010

Top 3 Charts to Whip Out When Democrats Start Running Their Mouths

Number 3: Borrowed a trillion dollars on the backs of our kids and grandkids, without permission, and utterly failed to deliver on their promises? Check.


Number 2: Continue to deliver a consistent track record of economic fail? Checkety-check.

Number 1: With reckless spending and a complete failure to address a looming entitlement disaster, have bankrupted the country and put the U.S. at the precipice of disaster? Check and mate, bizznitch.

You gonna put some ice on that, Democrats?


Wednesday, April 07, 2010

I want my robust, free health care without preconditions

Expect, oh, every doctor, nurse, hospital, insurer and pharmacist in the country to field millions of questions like these.

It was the most memorable time of my life, I...

...it was a touching moment because I never thought this day would ever happen. I won't have to work out how to put gas in my car, I won't have work out how to pay my mortgage. If I help him, he's gonna help me.

Sorry, wrong quote. These are the kind of questions to expect, multiplied by fifty or sixty million:

Questions reflecting confusion have flooded insurance companies, doctors' offices, human resources departments and business groups.

"They're saying, 'Where do we get the free Obama care, and how do I sign up for that?' " said Carrie McLean, a licensed agent for eHealthInsurance.com. The California-based company sells coverage from 185 health insurance carriers in 50 states.

McLean said the call center had been inundated by uninsured consumers who were hoping that the overhaul would translate into instant, affordable coverage....

"We tell them it's not free, that there are going to be things in place that help people who are low-income, but that ultimately most of that is not going to be taking place until 2014," McLean said...

The Obama administration is embarking on a years-long public education campaign about the overhaul, including a Web component. However, much of the guidance will depend on Department of Health and Human Services regulations that are still being developed.

Add all of those video and web production jobs to the swelling ranks of IRS employees and Labor Department snitch-handlers, and we're looking at boom times, baby!

If you're still not convinced this yet-to-be developed scheme to overhaul the entire health care system will actually work, I'd like to remind you that President Obama supports tough, direct presidential diplomacy with health insurers without preconditions.


Linked by: Michelle Malkin.

Monday, April 05, 2010

Presidential Stand-Up Comedy: Okay, My New Plan to Create Jobs is to Throw Sand into the Private Sector's Transmission! Can I Get a Rimshot?

The President continued his war against the private sector today, announcing Phase 72 of his purposefully ineffective plan to "create jobs". Best I can tell, this phase involves carefully listening to small business owners' suggestions, discarding their ideas, and creating bizarre central planning tenets straight out of Nikita Khrushchev's Little Black Book.

• ...we’ll forgive payroll taxes for businesses that hire someone who’s been out of work for at least two months – a tax benefit that will apply to unemployed workers hired between last month and the end of this year... (what??)

• ...provide tax credits to over 4 million small businesses so they don’t have to choose between hiring workers and offering coverage... (eh, what????)

• ...we’ll reform municipal bonds to encourage job-creation by expanding investment in schools and clean energy projects... [Oomph, more government debt?]

• ...Finally,this jobs bill will maintain crucial investments in our roads and bridges as we head into the spring and summer months, when construction jobs are picking up... [because $840 billion in borrowed money isn't quite enough?]

Say, I've got an idea, Mr. President!

Stop throwing sand in the economy's transmission. Business owners are scared senseless, unable to act because of the many forthcoming fees, taxes, regulations, dictates, bureaucracies and mini-Politburos they'll be forced to deal with:

• 2,700 pages of new health care regulations, most of it mandated on businesses large and small

• New (and illegal) EPA regulations that control the deadly toxin CO2, despite the fact that global warming is a proven scam

• The expiration of the Bush tax cuts, which means if you earn over $30K a year, you'll be getting a nice, healthy cut in take-home pay

• And, thanks to the oil drilling shell game that the White House, the EPA and the Department of the Interior are playing, we'll get no new oil supplies for the next ten years -- but plenty of lawsuits by the flat Earth, no growth, enviro-Marxists -- as oil prices skyrocket

By the time businesses figure out how to cope with the avalanche of government intrusion, the economy will be in full Cloward-Piven meltdown mode.

Despite the media's incessant marketing that a recovery is imminent, there's no masking the fact that the real economy continues to bleed.

[In March] were over 158,000 bankruptcy filings in the personal sector in the U.S. (that’s 6,900 per day!) which was a 35% surge over February’s result and up 19% from last year’s elevated levels. This also shows the extent to which fewer people are attempting to save their homes. They realized that their mortgage payments are not affordable and their attitudes towards residential real estate as a viable retirement asset have been altered permanently as many now see their house as nothing more than a debt-laden ball and chain.

Not only did the headline unemployment rate not budge, at 9.7%, but the broader U6 measure actually rose for the second month in a row, to 16.9% (the highest it ever reached in the prior recession/jobless recovery in 2003 was 10.4%, just to show what we are up against this time around). So long as we have this much spare capacity in the labour market — with nearly one in every six unemployed Americans vying for every job opening — deflation pressures can be expected to build...

...the ranks of the unemployed who have been looking for work for at least six months soared 414k in March, or nearly 7%, to 6.5 million. This is double from 3.2 million this time last year when equity investors believed the world was coming to an end. Of course, the world did not end for the equity investor who was bailed out by massive government incursion, but the world for the long-term unemployed has tragically become even darker... Long-term unemployment as a share of the total jobless pool now stands at a record 44% versus 26% and the last time the official unemployment rate was as high as is today was back in the early 1980s. There are three main reasons for this:

* The first has to do with the lack of mobility in a distressed national real estate market.
* The second reflects the permanent job loss that permeated this recession because the jobs in bubble sectors like construction and finance are simply not going to be coming back any time soon.
* Thirdly, large states such as California, Florida, Illinois and New York could always be relied upon in the past to be significant drivers of employment opportunities but they are just too cash-strapped today to play any role at all.

Finally, there are many factors related to the tragedy of rising long-term unemployment that lead us to the conclusion that deflation will prove inevitable, because the longer it takes to find a job — the average duration of unemployment just hit a fresh all-time high of 31.2 weeks from 29.7 in February — the more likely it is that these people will be rehired at a lower wage than they were receiving before they were let go from their previous job.

Welcome to the Obamaconomy! Welcome to the Democrat recovery!

Thanks to the Democrats, the country is heading for a deficit disaster with absolutely no cushion whatsoever.

Consider: we have no spending buffer whatsoever for a military emergency. And that's by design.

But don't worry, peasants. It's not like the suicidal terrorists running Iran are building nukes or anything.


Sunday, April 04, 2010

'The price of their infidelity will be high'

Adapted for the web from a speech by Rep. Paul Ryan at the Oklahoma Council of Public Affairs on March 31, 2010

Last week, on March 21st, Congress enacted a new Intolerable Act. Congress passed the Health Care bill - rather, one political party passed it - over a swelling revolt by the American people. The reform is an atrocity. It mandates that every American must buy health insurance, under IRS scrutiny. It sets up an army of federal bureaucrats who ultimately decide for you how you should receive Health Care, what kind, and how much... or whether you don't qualify at all. Never has our government claimed the power to decide when each of us has lived well enough or long enough to be refused life-saving medical assistance.

This presumptuous reform has put this nation, which was once dedicated to the life and freedom of every person, on a long decline toward the same mediocrity that the social welfare states of Europe have become.

Americans are preparing to fight another American Revolution, this time, a peaceful one with election ballots. But the "causes" of both are the same:

Should unchecked centralized government be allowed to grow and grow in power -- or should its powers be limited and returned to the people?

Should irresponsible leaders in a distant capital be encouraged to run up scandalous debts without limit that crush jobs and stall prosperity -- or should the reckless be turned out of office and a new government elected to live within its means?

Should America bid farewell to exceptional freedom and follow the retreat to European social welfare paternalism -- or should we make a new start, in the faith that boundless opportunities belong to the workers, the builders, the industrious, and the free?

What kind of nation do we wish to be? What kind of society will we hand down to our children and future generations? In the coming watershed election, the nature of this unique and exceptional land is at stake. We will choose one of two different paths. And once we make that choice, there's no going back.

This is not the kind of election I would prefer. But it was forced on us by the leaders of our government.

These leaders are walking America down a new path: creating entitlements and promising benefits that model the United States after the European Union: a welfare state society where most people pay little or no taxes but become dependent on government benefits ... where tax reduction is impossible because more people have a stake in the welfare state than in free enterprise ... where high unemployment is accepted as a way of life, and the spirit of risk-taking is smothered by a tangle of red tape from an all-providing centralized government.

Am I exaggerating? Are we really reaching this "tipping point"? Exact and precise measures cannot be made, but an eye-opening study by the Tax Foundation, a reliable and non-partisan research group, tells us that in 2004, 20 percent of US households were getting about 75 percent of their income from the federal government. In other words, one out of five families in America is already government dependent. Another 20 percent were receiving almost 40 percent of their income from federal programs, so another one in five has become government reliant for their livelihood.

All told, 60 percent - three out of five households in America - were receiving more government benefits and services (in dollar value) than they were paying back in taxes. The Tax Foundation estimates that President Obama's budget last year will raise this "net government inflow" from 60 to 70 percent. Look at it this way: three out of ten American families are supporting themselves plus - through government - supplying or supplementing the incomes of seven other households. As a permanent arrangement, this is individually unfair, politically inequitable, and economically dangerous.

It raises a subtle but real threat to self-government when the few are paying more and more of the bill for government services and subsidies to the majority: "He who pays the piper calls the tune." The next chapter is the rule of "crony capitalism," where those who pay most taxes get the privileges, and government by and for the people is replaced by government by and for the few. The end of this story is soft despotism.

We already see enough of "crony capitalism." When government sends bailout money to Wall Street firms they label "too big to fail," that's "crony capitalism." When government buys shares in General Motors, names their management, and dictates their salaries, that's "crony capitalism." When big health insurance companies, instead of competing for market, team up with Congressional Health Care writers to order every individual to buy their products, that's "crony capitalism." When thousands of small businesses have to meet bottom lines with no government bailout, well, you're too small to succeed: good luck!

The Democratic leaders of Congress and in the White House hold a view they call "Progressivism." Early Progressives wanted to empower and engage the people. They fought for populist reforms like initiative and referendum, recalls, judicial elections, the breakup of monopolies, and the elimination of vote buying and urban patronage. But Progressivism turned away from popular control toward central government planning. Teddy Roosevelt and Woodrow Wilson would have scorned the self-proclaimed "Progressives" of our day for handing out bailout checks to giant corporations, corrupting the Congress to purchase votes for government controlled health care, and funneling billions in Jobs Stimulus money to local politicians to pay for make-work patronage. That's not "Progressivism," that's what real Progressives fought against!

Does anyone recall Norman Rockwell's famous "Freedom of Speech" painting of an average working Joe standing and speaking his mind at a town hall meeting? Today's Progressivists ridicule average Americans speaking out at tea parties across the nation and denounce their criticisms as "un-American." Millions of average Americans reject their big government solutions, and that scares them.

Progressivists say the Founders' Constitution -- including its amendments, with its principles of equal natural rights, limited government, and popular consent -- is outdated. We should have a "living constitution" that keeps up with the times. Progressivists invent new rights and enforce them with a more powerful central government and more federal agencies to direct society through the changes of history. And don't worry, they say. Bureaucrats can be controlled by Congressional oversight.

Would you like an example of how successful Congressional oversight is? Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (or GSEs), underwrote trillions of dollars in junk mortgages. Year after year their officials and others from HUD, Treasury, and other agencies who supervise them marched up to Congress for hearings. Red flags were raised. The oversight committees had other priorities and dismissed them out of hand. With the housing market already tanking, Financial Services Committee Chairman Barney Frank said: "This ability to provide stability to the market is what, in my mind, makes the GSEs a congressional success story." Less than 18 months later, the ‘market-stabilizing' GSEs went belly-up due to their shoddy business practices, collapsing the mortgage credit industry and sparking the worldwide financial meltdown. No one knows the ultimate cost to the taxpayers but it will be gigantic.

If Congress can't control what a few mortgage finance bureaucrats do with your dollars, why would anyone trust Congress to control what tens of thousands of bureaucrats will do with your health?

The Progressivist ideology embraced by today's leaders is very different from everything rank-and-file Democrats, independents, and Republicans stand for. America stands for nothing if not for the fixed truth that unalienable rights were granted to every human being not by government but by "nature and nature's God." The truths of the American founding can't become obsolete because they are not timebound. They are eternal. The practical consequence of these truths is free market democracy, the American idea of free labor and free enterprise under government by popular consent. The deepest case for free market democracy is moral, rooted in human equality and the natural right to be free.

A government that expands beyond its high but limited mission of securing our natural rights is not progressive, it's regressive. It privileges the powerful at the expense of the people. It establishes the rule of class over class. The American Revolution and the Constitution replaced class rule with a better idea: equal opportunity for all. The promise of keeping the earnings of your work is central to justice, freedom, and the hope to improve your life.

In their hearts Americans know this, but people were alarmed in 2008 by rising unemployment, falling home values, a credit crunch, and a financial meltdown.

They voted for a change of parties in the White House, and elected the largest Democratic Congressional majority in more than three decades. So overwhelming was their majority that the opposition is unable to do anything to stop them from running roughshod over our foundations. Harry Reid had a supermajority in the Senate that could not be filibustered. Still, the people's mandate for Congress and the new President was clear, simple, and unmistakable: get employment back on track --- get our economy growing again.

Americans have lost jobs nearly every month since these leaders took over the federal government in January 2009, more than 4 million at last count. The official unemployment rate hovers near 10 percent, but if we add in folks who have stopped looking for work due to lack of job prospects, the rate is a lot higher.

They began by passing the first Stimulus, a taxpayer giveaway to their favorite special interests. The price tag was $862 billion. They pushed through a second stimulus bill that cost you another $18 billion. Let's see: since 4 million Americans have been unemployed since they passed these "stimuli," that averages $220,000 per job lost. Think about that. Democrats can't even put people out of work without spending near a trillion dollars!

Just to return to where we were at the end of 2007, 8.4 million jobs have to be created. To reduce unemployment to its pre-crisis level of 5 per cent by the end of President Obama's term, our economy needs to create 247,000 new jobs per month. But we are headed in the wrong direction --- except in one field: the government is growing at breakneck pace in expanding federal payrolls.

Has any Congress in history enacted, or tried to enact, so many foolish, squalid, and counterproductive programs?

As their first major item of business last year, these leaders pushed through a budget so bloated that it will double the federal debt in five years, and triple it in ten.

Now the Administration has sent Congress a budget that's far worse. The nonpartisan Congressional Budget Office [CBO] reports that 10 years from now, this budget will drive the federal debt burden up to 90 percent of the nation's entire economic production. It propels spending to a new record of $3.8 trillion next year [FY 2011]. It widens the annual deficit to a new record of $1.5 trillion this year [FY 2010], and raises $1.8 trillion in new taxes through 2020.

Two and a half years after this recession started, and no new private jobs? Think what these mind-boggling tax increases and mountain of debt are signaling to people who want to open or expand job-creating businesses. Congress keeps raising the barriers against work and production - that's your answer.

At a time when economic and job expansion should be Washington's highest priority -- and as if the multi-trillion dollar Health Care debacle were not enough -- the Progressivist leadership in Congress are adding insult to injury by promoting their energy and climate agenda through their Cap and Trade plan. Put aside the fact that there is growing disagreement among scientists about climate change and its causes. This bill is a big mistake for other reasons.

CBO estimates that Cap and Trade's total cost is another near-trillion dollars. By one CBO estimate, the tax and energy cost bills for the average American household may grow by $1,600 a year. Other studies put this cost a lot higher.

If you don't believe me, let me quote Barack Obama:

Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal-powered plants...natural gas...whatever the plants were, whatever the industry was...would have to retrofit their operations. That will cost money. They will pass that money on to consumers...So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.

Economists across the spectrum tell us that Cap and Trade would make our long-term national economic production fall below potential, causing higher unemployment. Federal spending is on an unsustainable path that can only get worse if this happens. There is general agreement that the environmental improvements from Cap and Trade are either nonexistent or too small to measure.

Congressional leaders are also pushing an unprecedented expansion of the Federal Reserve Board's regulatory powers over financial institutions under the belief that government must protect the people from themselves. The same leaders who never knew the government mortgage giants were supplying credit for worthless mortgages now want Fed bureaucrats to regulate the businesses that supply personal and commercial credit? If that happens, economic recovery will be a longer time coming.

And now I want to return to the Health Care Frankenstein. Most Americans understand that government-run Health Care is not free, not cheap, and not compassionate. I think most Americans believe Congress has no idea of what the public demand will be for subsidized Health Care. They are correct. When Medicare was enacted, Congress guessed it would cost about 10 percent of what it turned out to be after 25 years. Heck, Congress couldn't even figure the cost of the 3-month long Cash for Clunkers subsidy last year, underestimating it on the order of 1 to 9. Most Americans know the Congressional majority are clueless about what their government-run Health Care system is going to cost.

The drama that brought this creature to life was part tragedy and part farce. Ethical categories went out the window. Never in history have the deliberations of Congress been subverted on this scale. The secrecy, the lack of transparency, the half-truths were stunning. The votes called at midnight; the two- and three-thousand page bills members of Congress had no time to read before the votes; the sordid backroom deals; the Cornhusker Kickback that shamed Nebraska; the Louisiana Purchase; the "Gator Aid" Medicare privilege for Florida; the additional Medicare dollars for states whose wavering representatives only yesterday were ferociously denouncing earmarks; the federal judgeship dangled for one lawmaker's brother; the raid on the Medicare piggy bank; the lie that $250 billion for "doc fix" shouldn't count as a Health Care cost; the double-counted deficit estimate scam that would land any accountant in jail; the proposed Slaughter rule that Congressmen not record a vote on a bill their constituents hate, just "deem" it passed and vote on the amendments; and to complete the farce, the phony Executive Order pretending not to fund abortions when the Health Care bill, as "the supreme law of the land," does fund abortions. The level of political corruption to buy the votes for this debacle makes all past examples look penny ante by comparison.

Self-government stands or falls on integrity, not only in those who represent you but in the enactment of law. This indecency soiled our freedom and embarrassed the democracy we promote in other nations. And this may not be the last of it. To enact its transformative agenda, this leadership employs the Machiavellian saying that the end justifies the means. America was born in a revolution against that whole idea. Soon it will be the norm.

The Constitution and the consent of the people are all that stand between limited and unlimited government power. Zealous ideologues with the best of intentions brush aside the limits on power in order to get whatever they believe is good for the people -- no matter what the people believe. Our system of freedom can survive an assault, but it won't survive if the people are frightened, or angry, or asleep at the switch. A great Democrat, President Andrew Jackson, once said: "eternal vigilance by the people is the price of liberty." We can thank our current leaders at least for this: they have awakened the nation to the danger of taking self-government for granted.

Congress is not only enacting a social welfare state agenda over the objections of the people. It is failing to address the problems that threaten to engulf our country, principally economic decline and entitlement-driven debt crisis. The coming election will be a referendum on the agenda of our current leadership. Either it will give them a mandate that says "more of the same," or it will end the abuse of power and put America back on the path of growth and freedom.

Supposing the American people use their referendum in November to elect a new majority, what would the next Congress do?

The first order of business will be "repeal and replace." We will work to repeal federalized Health Care and replace it with a robust, competitive open market in health care that puts patients and their doctors at the center - not employers, not insurers, and not government agents. This takes at least two elections, and we must show our perseverance.

A new Congress will then turn to the great problem of our stagnant economy and the debt tsunami bearing down on us. The days of pretending not to notice are over. The next Congress will understand this threat and act after transparent deliberation and real debate.

I have put forward my specific solution, called "A Roadmap for America's Future," to meet this challenge. The CBO confirms that this plan achieves the goal of paying off government debt in the long run - while securing the social safety net and starting up future economic growth.

The problem in a nutshell is this: Medicare, Medicaid, and Social Security, three giant entitlements, are out of control. Exploding costs will drive our federal government and national economy to collapse. And the recession plus this Congress' spending spree have accelerated the day of reckoning.

Today, Medicare is $38 trillion short of its promised benefits. In five years, the hole will grow to $52 trillion. Your family's share of this gap is $458,000. Medicaid will add trillions more in state and federal debt.

Social Security's surplus is already gone, and its debt is mounting. Unless its finances are strengthened, the government will be forced to cut benefits nearly 25 percent or raise payroll taxes more than 30 percent.

Both Republicans and Democrats have failed to be candid about this. And we have only postponed the crisis by shaking a tin cup at China and Japan.

A new Congress could start by making you the owner of your health plan. Under my Roadmap reform, a tax break that now benefits only those with job-based health insurance will be replaced by tax credits that benefit every American. And it secures universal access to quality, affordable health coverage with incentives that hold down health-care cost increases.

Everyone 55 and over will remain in the current Medicare program. For those now under 55, Medicare will be like the health-care program we in Congress enjoy.

Future seniors will receive a payment and pick an insurance plan from a diverse list of Medicare-certified plans - with more support for those with low incomes and higher health costs. To reform Medicaid, low income people will receive the means to buy private health insurance like everyone else.

Under the Roadmap's Social Security proposal, everyone 55 and older will remain in the existing program with no change. Those under 55 will choose either to stay with traditional Social Security, or to join a retirement system like Congress's own plan. They will be able to invest more than a third of their payroll taxes in their own savings account, guaranteed and managed by the federal government. For both Social Security and Medicare, eligibility ages will gradually increase, and the wealthy will receive smaller benefit increases.

The Roadmap offers taxpayers an option: either use the tax code we have today, or use a simple, low-rate, two-tier personal income tax that gets rid of loopholes and the double taxation of savings and investment. And let's replace corporate income taxes with a simple, competitive 8.5 percent business consumption tax. These low-rate and simple tax reforms would provide the certainty and the incentives for investors to open new enterprises and for workers to find a marketplace expanding in new jobs.

The Roadmap plan shifts power to individuals at the expense of government control. It rejects cradle-to-grave welfare state ideas because they drain individuals of their self-reliance. And it still honors our historic commitment to strengthening the social safety net for those who need it most.

I would welcome honest debate in the next Congress on how to tackle our fiscal crisis - and the larger debate on the proper role of government. It's time politicians in Washington stopped patronizing the American people as if they were children - deferring tough decisions and promising fiscal fantasies. Tell Americans the truth, offer them a choice, and count on them to do what's right.

A political realignment is on the way. Democratic leaders are staking their party's future on their ideological agenda. Financial Services Committee Chairman Frank candidly admits that his party "are trying on every front to increase the role of government." Former President Clinton told a Netroots convention last year that "We have entered a new era of progressive politics, which if we do it right could last 30 or 40 years."

The question is, do we realign with the vision of a European-style social welfare state, or do we realign with the American idea?

My party challenges the whole basis of the Progressivist vision of this country's future. We challenge their attack on American exceptionalism. We challenge their claim that bureaucratic centralization is the only way the US can meet the economic and social challenges of our time.

Those leaders have underestimated the good sense of the American people. They broke faith with independents, Republicans, and their own rank-and-file. They walked away from the foundational truths that made America the wonder and the envy of the world. The price of their infidelity will be high.

Knowing America, I am confident that the American character is up to every challenge. America is not over. This exceptional nation will not go down the way of mediocrity. Ronald Reagan used to say: "Freedom is never more than one generation away from extinction ... It must be fought for, protected, and handed on for [our children] to do the same." We are that generation. The fight is our fight, and it begins now! The time is at hand to reclaim America for freedom.


Paul Ryan represents Wisconsin's First Congressional District. He serves as ranking member of the House Budget Committee and senior member of the House Ways and Means Committee.