As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it, avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear. The execution of these maxims belongs to your representatives, but it is necessary that public opinion should co-operate. To facilitate to them the performance of their duty, it is essential that you should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment, inseparable from the selection of the proper objects (which is always a choice of difficulties), ought to be a decisive motive for a candid construction of the conduct of the government in making it, and for a spirit of acquiescence in the measures for obtaining revenue, which the public exigencies may at any time dictate.
~~George Washington
(with some help from Alexander Hamilton)
in GW's Farewell Address, 1796

Classic Republican Simplicity.

1. Public Credit is essential.

2. Spend public money frugally--but don't be penny wise and pound foolish. Spend it when you must (to ensure national security).

3. Pay your own way. Don't mortgage the future. Don't burden future generations with your profligacy.

4. Elective government is responsible for holding the line on spending, but, ultimately, expenditures will reflect the popular will.

5. To pay down debt, government must tax. Taxes are inconvenient and unpleasant--but necessary.

6. Good government is responsible government. Government must be worthy of our taxes.

Back to Basics. The Party is Over. While this may be contemporary GOP heresy, it is time to reclaim Classic Republican good sense.

We need to get serious about taxes--for two reasons:

1. We desperately need the money. We are amassing a national debt that poses an existential threat to American independence. The only way to protect our liberty is to RAISE REVENUE and CUT EXPENSES--and do both of those things in a meaningful way.

Brace yourselves: this is going to sting.

2. We need to tax everyone until it hurts. We need to tax George Soros, Warren Buffet, Steven Spielberg, AND YOU AND ME until we all feel the pain of taxation and cry out for a more responsible government.

The tax burden ought to be such that even rich liberals come to understand that there is a price to pay for a government that aspires to be all things to all people. Most importantly, we must tax all citizens of all socioeconomic ranks so that all Americans are invested in good stewardship. For those who pay no taxes, every government program is a good one.

We must face reality. Our current president won election promising 98 percent of America a tax cut. We must overcome the sophistry that the masses will benefit from a tax structure that only "inconveniences" the fortunate few. Those numbers do not add up--and we should disabuse ourselves of such foolish notions. They defy common sense.

The Party is Over. Twentieth century "tax and spend" liberalism yielded the stagflation, systemic insolvencies, and malaise of the 1970s. As a well-intentioned alternative to over-taxation, the market conservatives offered what tragically amounted to "borrow and spend," which produced a generation of high times but ultimately led us to this desperate moment of reckoning. Let us return to our Classical Republican roots.

Let us commit ourselves to frugality and moderation. Let us understand that sustainability, living within our means, is our primary national priority. But first we must take drastic measures to meet this moment of crisis. The transition back to fiscal health will not be pleasant--but it is time to change our indulgent habits forever--or die.

Acknowledgement: this is not especially original thinking on my part. Among other influences, the Okie Gardener offered a compelling essay on this subject last Octber.
Although I hate that is has become so cliche, for a long time my watchword for the American future has been sustainability.

1. Of course, I advocate "Going Green." While "environmentalism" is much too often merely a nebulous catch-all talking point designed to score political advantage, we must move away from our plastic disposable society.

2. More fundamentally, I also advocate sustainability as an essential element of domestic economic policy. We can no longer promise what we cannot afford. We can no longer count on borrowing money on the strength of our prodigious economic history, while our economic future is increasingly at risk and enfeebled as a result of our profligate present. We can no longer rely on the illogical assumption that sustained deficit spending ensures perpetual prosperity. In essence, our government cannot be all things to all our citizens. To survive, our government must learn to say "no." As I have said before, we must understand that the Keynesian Interlude is coming to an end.

3. Perhaps most importantly, I advocate sustainability as a governing principle in terms of foreign relations. Idealism and pure humanitarianism regarding foreign affairs are luxuries we cannot afford in light of my second proposition. We must be much more circumspect in defining our vital interests. To put it bluntly, we must be much more frugal and selfish in wielding our military power. The era of Pax Americana is no longer tenable in the age we are about to enter. The argument over the intentions or benefits concerning the projection of American power is now moot. Rather, our new economic realities dictate a more humble and realistic approach to the world.

Ironically, I have a strong sense that the new post-America world order will be a tragedy for humanity in terms of security and quality of life. Notwithstanding, we stand at a crossroads in which our basic needs and vital interests must trump our evangelical impulse to ameliorate the human condition.

We are a long way from facing up to this inevitable radical change in our status. I firmly believe that we will not come to grips with these new facts of life until we are absolutely forced to. But I am increasingly convinced that they are out there waiting for us--like it or not.
Health care reform is no longer just a moral imperative, it's a fiscal imperative.
President Barack Obama

He is right, of course. The health care debate has shifted beneath our feet.

Why? The Party is Over.

One day, we will look back wistfully on this moment and recall our privileged status regarding health care in America. How good was it? Almost anyone with a job, or was married to someone with a job, or lived with parents with a job, enjoyed nearly unlimited access to a truly miraculous system of health care. Although we have NOT spent a lot of time appreciating the wonder of the current system, the vast majority of us have been privy to the best-trained physicians, the most advanced medical technologies, and the most comprehensive network of doctors and facilities ever assembled in the annals of medical history.

Those days are necessarily coming to a close.

Why? Not merely because the "Radicals have taken over." True, Barack Obama and his brain trust seem intent on finally fulfilling the ancient New Deal promise of national health care, which has always portended a leveling effect on the quality of care--but that fact is merely incidental to this story. This inevitable change is not driven primarily by the "social justice" side of the political ledger--or, as the President characterizes it, "the moral imperative."

For decades, we have been very close to totally deaf to the sad refrain of "forty million uninsured" fellow citizens. Why so unresponsive? Partly because the claim is something of a distorted and transparent political manipulation, but mainly because the vast majority of us were thriving under the status quo. We are not a blindly utilitarian society, but when the great bulk of the citizenry are prospering under a given regime, they are loath to sacrifice their advantage for a disadvantaged minority. In that regard, nothing has changed. Collective compassion will not be the impetus for the massive change in the offing.

What then? Unsustainable costs necessitate our coming transformation. Ironically, we are victims of our own success. The wonders of medical research and development and production have outdistanced our financial resources. Most of us do NOT assume we are inherently deserving of the very best and most-advanced products in our consumer culture. We make choices commensurate with our ability to pay. Most of us do NOT feel entitled to drive top-of-the-line automobiles regardless of our ability to afford one. Most of us understand that we must settle for the computer, television, or stereo that fits within our budget.

But not in regard to health care. If we are sick, by God, we figure we ought to have access to as many PET scans, CAT scans, and MRIs as we can fit into an afternoon visit to the Medical Plaza. That sounds fine, doctor, but let's bring in the specialist for a consultation. Private Room or Semi-Private? Do you even have to ask?

Conservatives bristle when Liberals enumerate health care as one of the recently found bedrock undeniable human rights. In the abstract, if we are compassionate conservatives, we prefer to characterize universal access to medical care as a positive good that falls within the scope of community interest--but not an inalienable right endowed by the Creator. We delude ourselves. We should acknowledge the acute sense of entitlement among the American middle class (regardless of party or ideology) concerning medical care. While we robustly debate the level of care society owes the "poor folks," we have no doubts that we deserve the platinum treatment. We work hard; therefore, we warrant the very best medical care available.

Part of our disconnect rests in our sense that health care appears free to us. Of course, rationally, we understand perfectly well that nothing in this life is free. As Milton Friedman loved to remind us, "there is no free lunch." Somebody always picks up the bill. For most of us, as intimated above, it is our employers--and then gets passed back on to us indirectly and discretely. But the truth is, and here is the rub, the rising costs are fast-approaching a prohibitively burdensome strata. How much longer can companies continue to shoulder this cost of living as part of our compensation packages? Not forever.

But this also begins to obscure a more important point. It is not just that our employers can no longer afford our health care, because, as we say, the money for health insurance comes in the form of compensation and is part of the overall cost of doing business and is passed back into society and absorbed by all us indirectly. Conceivably, we are getting paid less (and, hopefully, taxed less) because our employers are compensating us with benefits rather than salary. In itself, shifting the burden from the private sector to a one-payer system (national health care) will do nothing to solve the problem.

To repeat, the fundamental problem rests in the UNSUSTAINABLE rising costs. As a society, we CANNOT afford to pay for health care through government agency anymore than we can afford our current system of health care as an employee benefit.

The obvious solution is cost control, which means rationing care, which means the Golden Age of carte blanche health care is concluding.

How we get there remains undetermined, but the ultimate destination is certain.

The Party is Over, and the time has arrived to pay the piper. We are not going to like it, but we better get ready for it nevertheless.
Category: The Party is Over
Posted by: A Waco Farmer
The Party is Over.

As I have written, the End of the Party means releasing unreasonable expectations and assumptions about the nature and meaning of life. The End of the Party means a return to reality. The End of the Party is an opportunity to purge our lives of pernicious distractions and reconnect with ancient human truths. Again, this is essentially positive--although it will have its inconveniences. Up until a few days ago, I believed most of us were in the process of coming to grips with these resurgent facts of life.

An Important Aside: the End of the Party, however, should not be confused with the "End of the World." The End of the World is a much scarier scenario, although, unfortunately, altogether possible.

A Note on Terms: to be clear, the "End of the World" speaks to the reality that we are flirting with a titanic economic collapse. A complete financial meltdown so mammoth that the government and culture of the United States would cease to exist in a form recognizable to our generation.

What to do? We the people must change our ways, and, more importantly, we must demand that the government change the way it does business to avert the eventual economic cataclysm is this country.

Perversely, massive federal borrowing to avert a bank collapse seems logical to me. We know exactly what happens when the banks fail (the Panics of 1819, 1837, 1857, 1873, 1893, 1907, and 1929). Who knows what chaos such a financial calamity might wreak on our modern society? We cannot take that chance. Seven-hundred billion or three trillion dollars, restoring the financial sector in this country is a matter of national security; it is the proper role of government.

Having said that, the banking crisis and the recession are two different problems; they are connected but distinct. The difference? Most of us have lived through many recessions; few of us have lived through a bank panic. Fix the banks and heal the credit sector and the recession fixes itself naturally. However, there is a much bigger systemic liability: we are approaching a moment in which our collective ability to generate revenue can no longer support our extravagant national lifestyle.

What next? What must be done in Washington? Our government must work out a sustainable plan for the USA going forward. Understand our basic problem: we cannot be all things to all people. We can no longer believe that the key to economic success is spending every dime available and then some. We must face the unhappy reality that the Keynesian Interlude is finally over.

Although I dutifully voted for John McCain and divided government, for a brief moment during the transition, I allowed myself to believe in Barack Obama as the agent of necessary change. Why?

1. I am a person of hope.

2. As a nation, our other options were so dismal.

Barack Obama was uniquely qualified to bear bad news to an admiring nation. Only Nixon could go to China. Only Barack could explain our new reality to a nation in need of tough love.

Why was I hopeful that he would rise above partisanship and ideology to be a great American president? Because it was so necessary; our posterity depended on him doing just that. In my heart of hearts, no matter how illogical or un-biblical, I continue to trust in Providence as it concerns American government. I was optimistic about Barack Obama for the same reason I was optimistic about the "surge" in Iraq. Not because it was logical or likely--but because failure would be lethal. It just had to work.

Our economy today faces a crossroads that dwarfs Iraq in terms of importance. It is not an exaggeration to assert that our very survival as an independent nation is at stake. Would Barack Obama rise to the occasion? If he failed to grasp the urgency of the moment, we would be in dire straits.

The Bad News: the events of last week demonstrate clearly that he does NOT get it. Instead of folding our bad hand and leading us to a new epoch of real sustainability, the President has decided to double-down. If our pattern of spending, taxing, and borrowing regardless of sound economic principles and plain old good sense got us in to this mess, then more of the same will surely get us out.

What Now? I still support and respect this duly elected President of the United States. But it is now time to face facts. I am now painfully aware of how much I disagree with his governing philosophy. This President's political ideology is destructive, and we need to defeat his proposals.
I have been using the phrase, "the party's over," on this blog and on the street for some time now. I feel compelled to offer a bit of explanation and background.

Provenance: Several months ago, at the beginning of the financial meltdown, my wife and I were driving through the campus of our beloved alma mater. As we passed beautiful coed after beautiful coed driving new sports cars, talking on cell phones, and cruising handsome young men, I remarked to her, "someone needs to come down here and tell these kids the party's over."

I exercised my prerogative to interpret her raised eyebrow as an invitation to expound. "This is all over," I said. "The college experience can no longer merely be about seizing the opportunity to hang out with exotic people, party all weekend, shop, and find romance outside the confines of parental supervision." Time is short. We must return to teaching and learning as our number one educational priority.

I can't remember her exact words, but, in essence, she accused me of being a cranky old man. She gently reminded me of my own college experience. She had me there. No one had ever taken better advantage of the party than I--but that ironic observation, in fact, no matter how incisive, misses the greater point: the party's over. It is not really important whether this new fact of life is fair--or some kind of double standard--it mainly matters that the new reality really is the new reality.

The party's over.

Meaning: So much of the culture we have invented for ourselves during the last half century (accelerating over the last quarter century and last decade) is not sustainable. The world is suddenly very serious--but the kids on the campuses of our major universities, like their parents and teachers, are still in "party" mode.

Therefore, if we suddenly and unexpectedly live in a very serious world, we can no longer be careless or whimsical with our personal, national, or institutional resources. The old republican virtues are, by necessity, very much back in vogue: frugality, modesty, integrity, sacrifice, humility, etc.

The New Reality. We no longer live in a fantasy world without consequences. We can no longer pretend that path to prosperity and security is paved by spending beyond our means. We no longer have the luxury of wasting large blocks of time on the pursuit of temporary pleasures and self indulgences. The decades-long magic carpet ride is over. It is time to walk the earth once again and rediscover the limits and natural laws of the human experience.

A Self-Conscious Aside: having said all that, I am keeping the blog.