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December 2, 2008
Exclusive: Real World Solutions to Looming Fiscal Crisis
Dick McDonald
People in my Republican club are going fruitcakes over an article by the Governor of South Carolina, Mark Sanford. In it, he concludes:
“It’s not only imperative that our party returns to its fiscally conservative roots but that we do so soon. As a nation, we’re on the hook for $52 trillion, and that represents an invisible $450,000 mortgage owed by every household in America.
We’ve thrown $2.3 trillion toward bailouts and a stimulus this year with little to show for it in the way of results, with seemingly hundreds of billions more being contemplated by Congress each day. Borrowing from Medicare, Social Security, our grandkids and the Chinese to remedy a problem created by too much borrowing strikes me as odd, and hardly the “change” Americans really want.
Where change must come, though, is in once again making our party one that governs on the principles it professes. That change starts with each of us in elected office, and more importantly, with each person who cares about returning to conservative principles making their voices heard.”
We’ve thrown $2.3 trillion toward bailouts and a stimulus this year with little to show for it in the way of results, with seemingly hundreds of billions more being contemplated by Congress each day. Borrowing from Medicare, Social Security, our grandkids and the Chinese to remedy a problem created by too much borrowing strikes me as odd, and hardly the “change” Americans really want.
Where change must come, though, is in once again making our party one that governs on the principles it professes. That change starts with each of us in elected office, and more importantly, with each person who cares about returning to conservative principles making their voices heard.”
If that pulls your chain, then God bless you. To me it is nothing more than an excuse for failing to target our enemy – socialism and the Democrats. They have enacted laws that Republicans seem to ignore – laws that are converting America into a nanny-state. Fifty-three percent of our national budget is nothing more than a socialist state’s mandated entitlements. This is an abomination. It is a political perversion that must be stopped.
As an exercise in assessing his plan to return to conservative principles let’s take Gov. Sanford’s above three paragraphs one at a time.
Paragraph 1
Gov. Sanford states that each American household owes $450,000 as its share of the $52 trillion of funded and unfunded debt as of September 30, 2007. Pray tell what is Mark’s suggestion as to how to pay it off? He doesn’t have any. Why are my people going fruitcakes over that?
Rise Up America (RUA) – OSI’s (Ownership Society Institute) Rise Up America plan extinguishes all but $6 trillion of that $52 trillion with a stroke of a pen. Gee, is anyone interested in an empirically proven method of extinguishing $46 trillion of debt?
Paragraph 2
Gov. Sanford complains that stimulus packages have done nothing to solve our financial crisis and we continue to borrow from China, SS & MC. What is suggestion? He doesn’t have any. Why are my people going fruitcakes over that?
RUA – OSI’s Rise Up America plan infuses Wall Street with new capital of $125 billion a month for the foreseeable future - $125 billion of new capital each and every month. It will make the poor rich and America 50 times wealthier and solve our present crisis – any interest?
Paragraph 3
Gov. Sanford tells us to return to our principles. Earlier in the article he said they were lower taxes, less government and more freedom. He doesn’t mention how we accomplish any of those goals. He has no plan. How does one win in 2010 with no plan? Why my people buy empty rhetoric is beyond me.
RUA – OSI’s Rise Up America plan cuts the national budget in half (smaller government) generates the biggest tax cut in history (lower taxes) and generates more freedom than all the statutes ever passed by Congress in our 232-year history. See www.riseupamerica.us and the mission statement for a list of those freedoms.
Folks you never fight a war with a weapon you don’t have. Gov. Sanford wrote a nice pep talk but substantively he was shooting blanks. He has no plan. He has no weapon. OSI has the skeletal framework of one in RUA. It needs to be fleshed out. Let’s get going, folks.
The RUA plan is spelled out at www.riseupamerica.us. It is a small change in the manner in which we fund retirement but it makes a sea change in the fortunes of the country and its citizens. Presently, payroll taxes collected by the Federal government amount to $1.5 trillion annually. Those funds are not saved or invested but consumed annually in paying Social Security and Medicare benefits and about 15% in pork barrel projects the politicians ask us to pay for twice.
The RUA plan does the following:
1. Repeals the Social Security and Medicare laws but makes currently paid benefits the floor under which no future benefits can ever fall. It therefore honors current benefits for all people for all time.
2. Takes the $1.5 trillion collected and returns the ownership of those monies to each taxpayer that paid them and places those funds in his or her own personal investment account (PIA) to be invested in America’s capital markets for the working life of the taxpayer.
3. This will cause American’s savings rate to increase from zero to 15% of their personal income and dump $125 billion of absolutely new and untapped capital into the stock market EACH MONTH to send the markets and the economy into hyper-drive. It will cure the ills the market is presently suffering and make all of its citizens capitalists.
4. The enactment of RUA will eventually result in the elimination of poverty by the magic of compounding. Funds left to grow and accumulate will enable everyone to retire affluently and personally afford the best medical care on the planet. Today’s average household will accumulate a $4 million nest egg which will generate a $33,000 a-month retirement check without even invading the $4 million nest egg.
5. By enacting RUA the national budget will be cut in half and the largest tax cut in history passed – lower taxes and smaller government are goals worth pursuing.
6. One national pension fund will relieve states like California from saddling taxpayers with $100,000 pensions for prison guards for example. States desperately need help. They too make the mistake of failing to fund pensions and rely on disastrous pay-as-you-go methods. Of course unions won’t need to strike for retirement benefits and manufacturers will be freed of those costs – think the Big Three.
7. RUA simultaneously funds old program benefits, places the taxpayer’s payroll taxes into PIAs and improves the value of the US Dollar – see the article “The Magic Transition” on the website above.
8. The enactment of RUA and the repeal of Social Security and Medicare will immediately extinguish $45 trillion in unfunded debt run up by Washington politicians.
RUA generates many more benefits not the least of which is emancipating women to stay home and rear the kids and still retire a millionaire. You need to read the free book on site Making the Poor Rich and America Wealthier for a more complete view of the many additional benefits RUA will confer on America. As a favor to yourself just go up on the site and click on the tables and charts and verify the mathematics for yourself.
If you are interested in contributing your time, talent or money to the RUA cause contact Dick McDonald or the editor at FamilySecurityMatters.org.
FamilySecurityMatters.org Contributing Editor Dick McDonald is a career financial analyst, accountant and champion of establishing Personal Accounts for American workers in place of the outmoded, inefficient Social Security program. Dick maintains a website at http://www.riseupwarrior.com/.
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