Reagan was the consummate Happy Warrior. He spoke softly, but he carried a big stick. He tapped into the sentiment held by most Americans who, after years of being trapped under big-government deadweight, yearned to breathe free again. And here we are, thirty years later, faced with the same questions. Only Barack Obama and the kooks aren’t your father’s Democrats. They are a wrecking crew who’ve learned not to repeat the timidity and compromise of your father’s Democrats.
That’s why the challenge for us is much more difficult than it was in 1980. The problems are bigger, the economic disaster more catastrophic, the debt so much bigger, government so much more monstrous, and American influence more weakened. We need to seize the moral and practical outrage we felt in 1980 and cube it because this time, the very essence of America is at stake.
That’s why we need to once again become a nation of Happy Warriors, armed with a positive battle cry of renewal, a set of policies, and a relentless optimism that will sustain us even through the harshest kook pushback and the dislocation of unraveling decades of their corrosive policies and entrenched redistributionist mentality.
Is America lost? Not yet, but the hour is late, and with each passing moment we get closer to the tipping point. If we are to find America again, we need to rediscover our inner Happy Warriors and get on with it.
Captain America vs. Robin Hood
* * *
Yes we can!
—Barack Obama to the American people, 2008
Yes we can, but …
—Barack Obama to Jon Stewart, 2010
A funny thing happened to Barack Obama and the leftists on their way to “fundamentally transforming” the nation: many Americans stood athwart history and yelled, “Stop!”
The Americans who make up the Tea Party take their job as sentinels for the nation seriously. If their leaders were going to rape the people, pillage the Treasury, and bankrupt the nation, they would respond with peaceful resistance. And so they did: Americans of all stripes began to organize regular Tea Party protests around the country. Town hall meetings held by members of Congress, usually sleepy affairs, became raucous events during which the people demanded answers about the abuses of power to which they were being subjected. Many of those Democrats, who had gleefully embraced the bust-a-gut spending and the redistributionist nightmare of ObamaCare, recoiled in genuine shock at the response of the people. Some of them refused to face the very people who pay their salaries. Some opted for quick press releases, while others attempted “virtual town halls.” But all were cowering in fear, hiding under their desks, wearing soiled Pampers with pacifiers in their mouths.
Republicans, however, were put on notice too. The Tea Party did not originally grow out of opposition to the agenda of Obama and the Democrats. It first grew out of a failure of the establishment Republicans to stand for constitutionally limited government, fiscal responsibility, and free markets. If the GOP had always stood strong for those principles, there would have been no need for a Tea Party. The Tea Party originated to put a spine back into the Republican Party, to get it to return to constitutional truths. Every time establishment Republicans get defeated, as did Gerald Ford in 1976, George H. W. Bush in 1992, and John McCain in 2008, conservatism always finds a way to come roaring back and give the tired old GOP a course correction.
The Tea Party has establishment Republicans worried, of course, because they fear the end of the big spending gravy train, traditional “I’ll scratch your back if you scratch mine” style of negotiation, and the upset of their comfortable status quo. It has already succeeded in replacing establishment Republicans such as Kentucky’s Trey Grayson and Pennsylvania’s Arlen Specter with principled conservatives Rand Paul and Pat Toomey.
But above all, the Tea Party strikes real, deep, profound fear in the hearts of the kooks. Without wealth redistribution and economic control, they are nothing.
The irony is luscious: Obama and the kooks came to Washington to “fundamentally transform” things, and while they did, they also gave rise to an even more powerful force that changed things in the polar opposite way. The Tea Party forced not only a pullback of the Left’s objectives but a realignment of the way taxpayer money was treated. Gone were the days of the Ted Kennedy three-martini deal-making lunch and the cavalierly spent trillions that went along with them. Gone too was the famous Ted Kennedy/Chris Dodd Waitress Sandwich that always accompanied said three-martini deal-making lunch. Instead, at least some greater awareness of fiscal responsibility and spending restraint took their place.
Fool us once, shame on you. Fool us twice, shame on us. As Obama’s kook march pressed on, more and more Americans began forming a line of resistance. We put the “but” into “yes we can, but …”
We are witnessing the great final battle between the statist, wealth-distributing, central-economic-planning ideology of Barack Obama versus the dynamic, free market, individual liberty, limited government philosophy of traditional America. It’s a battle between the kooks and the rest of us. It’s a battle between Robin Hood and Captain America. Which side will win?
The path back to America must, of course, begin with replacing Obama as president. The country’s foundational principles cannot withstand his relentless assault for much longer. If he and his team are allowed another term, they will, in the words of Obama himself, “finish the job.” By that, he means finishing off the country. Whatever he will not be able to get through the standard legislative process, he will effect through executive fiat. And without the worry of reelection, there will be no stopping him.
So Job One must be to “de-kookify” our leadership. After “de-kookification,” we must move to salvage the nation from decline and decay.
Where do we begin? The world is a complicated place, rife with complex problems to which there are no easy solutions. Usually, there are also big trade-offs in any course of action, in which certain principles and goals have to be sacrificed in service to others. What follows is not meant to be a comprehensive, detailed, or exhaustive set of policy prescriptions. Instead, it’s a general look at how to begin to restore America. As John Milton wrote in Paradise Lost, “Long is the way and hard, that out of Hell leads up to light.” We mustn’t let the difficulty of the task discourage or deter us. The kooks have been 100 percent committed to their project, and we must be 100 percent committed to our restorative one. We must gird Captain America with every possible tool to use in his battle against the kooks’ demented Robin Hood.
America at Home. As we survey the domestic damage of the past few years, we’ve got to recognize that the first step is to prevent more harm from being done. That means taking the keys of the kingdom away from the skinny socialist and his toxic band of radicals.
Next, we must counter class warfare with a prosperity vision for America. We must adopt commonsense economic solutions that will put the U.S. economy back on its traditional rocket path. This is the strength of America. It is the source of our greatness. My Bulgarian cabdriver gets it. The American people get it. Billy Idol gets it. Obama and the kooks get it; they just wage war on it.
No great nation can remain so if its people are burdened with shouldering the irresponsibilities of the state. As Thomas Jefferson put it in his First Inaugural Address in 1801, “[A] wise and frugal government … shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”
In order to restore the nation, we must remove the sources of economic destruction and uncertainty and replace them with policies that will inspire certainty, confidence, and optimism. This will require a multilayered attack on the Obama agenda and institutional inertia while simultaneously advancing pro-growth, deregulatory, and limited government policies. In other words, doing the exact opposite of what Obama has done and using a blueprint similar to what President Reagan used to spur the tremendous economic recovery
of the mid-1980s. Reagan’s emphasis was on economic liberty, and that’s the way forward today, just as it was thirty years ago.
Out of the gate, we should demand from our leaders a fundamental attitude adjustment on spending. By adding to the deficit, the feds are stopping businesses from borrowing to create jobs and blocking consumers from getting the capital they need. Treasury debt is up by about 40 percent over the past few years while commercial and consumer debt is down by roughly 20 percent. There’s very little movement in the broader economy largely because the government is monopolizing the loan window. The entire economy is tied in to the spending levels of Washington.
We can no longer tolerate a federal government that refuses to restrain even the growth of government, never mind refusing to actually cut it. We need a fundamental change in the budget’s engineering, something Representative Paul Ryan began to propose with the Republicans’ 2012 and 2013 budgets. Ryan, the chief conservative green-eyeshade guy, has been hip-deep in budget matters for years. His ideas represent a clear path forward to fiscal sanity and ultimately the economic health of the nation. Implementing even parts of his plan may be exceedingly difficult, but it has already accomplished two critical things: (a) It has gotten our leadership and the public focused on the reality that we cannot go on spending and amassing debt at these levels. And (b) it recognizes that we’re in an economic war—and its solutions embody the principles of the Happy Warrior. His program may or may not be the endgame, but it—like Obama’s blown-off bipartisan deficit reduction commission—truthfully acknowledges the seriousness of the economic battle and the weapons and will we’re going to need to fight it.
To start, we must aim to shrink spending by trillions of dollars over the next ten years. Ryan’s budget calls for $6.2 trillion in savings. Other plans offer similar spending reduction targets. We’ve got to reduce the percentage of debt to GDP and adjust the spending trajectory to bring down the debt. Ryan’s plan brings spending below 20 percent of GDP. Other recommendations go even further, aiming to push federal spending down to 18 percent. Getting federal spending down to those levels would reduce deficits by about $4.4 to $5 trillion. In the context of a national debt speeding toward $17 trillion, it’s not a cure-all, but it’s a start.
Several key reforms must be carried out to bring spending down. Spending on domestic government agencies should be kept at or below 2008 levels and frozen for five years, while unnecessary and redundant departments and bureaucracies should be eliminated entirely. EPA, I’m looking at you. If the government wants to study the mating habits of the North American egret, then they should get a private organization to fund it. Taxpayers don’t exist to pay for bird sex. In addition, permanently banning earmarks; getting rid of Fannie Mae, Freddie Mac, and other tax dollar–sucking government-sponsored enterprises; and eliminating “green” and farm subsidies such as ethanol would also cut federal outlays significantly. Numerous subsidies also should be terminated or reformed, the federal workforce cut through slashed budgets and attrition, and wasteful spending at the Pentagon eliminated rather than hitting Defense through the Obama cuts and the pell-mell reductions coming in 2013, thanks to the Super Committee mega-choke.
We’re in such a deep debt hole that if Ryan’s reform plans were put in place and kept “as is” (which never happens in Washington over any duration), it would still take us twenty-eight years to balance the budget. Senator Rob Portman, who served on the Super Committee, has suggested a “dollar-for-dollar rule” as a permanent debt-limit policy. He argues that if we match debt increases with spending cuts, we could cut over $5 trillion over the next decade and balance the budget without raising tax rates. Representative Connie Mack has advanced the “Mack-Penny” plan, which would cut federal spending by 1 percent each year over the next six years, cap spending at 18 percent of GDP by 2018, and reduce overall spending by $7.5 trillion over the next decade. The Ryan, Portman, and Mack plans are serious proposals that deserve serious attention. We can debate their individual merits, but we can’t stall deep spending cuts for much longer.
To spur economic growth, consequential tax reform is a critical companion element to spending cuts. Reform that would simplify the tax code and infuse it with pro-growth incentives would increase competitiveness and fire up job creation, consumer spending, and investment and other economic activity. Ryan suggested two rates: 25 percent and 10 percent. Steve Forbes has argued for years for a flat tax, in which all existing tax rates would be junked and replaced with a flat, across-the-board 17 percent rate and expanded exemptions for individuals and children so that a family of four would pay no income taxes on the first $36,000 of income. Furthermore, there would be no tax on Social Security, pensions, or personal savings, and his plan would zero out capital gains. Newt Gingrich proposed an optional 15 percent flat tax, and Herman Cain championed a 9 percent individual federal income tax rate, a 9 percent corporate tax rate, and a 9 percent national consumption tax. A flat federal income tax has the virtues of being simple and equitable; everyone would have to pay something, giving everyone a stake and a responsibility. Nations that currently have a flat tax include numerous former Soviet bloc states such as Hungary, the Czech Republic, Lithuania, Georgia, and my cabdriver’s place of birth, Bulgaria. Iraq has also instituted a flat tax.
Other tax reform advocates have suggested scrapping all federal taxes on personal and corporate income and replacing them with a Fair Tax, which would be a national consumption tax on all retail sales that would provide rebates to poorer Americans to offset its regressive nature. Various concerns about revenue neutrality (but not about spending!), the development of underground economies, and general workability come up in discussions about a flat or fair tax, but they deserve real attention.
More traditional approaches to tax reform involve lowering the top individual and corporate rates from 35 percent to about 25 percent or below. The Simpson-Bowles deficit commission recommended reducing and flattening individual income tax rates to 8 percent, 14 percent, and a top rate of about 24 percent depending on how many and which tax breaks were eliminated. Another bipartisan deficit commission, Rivlin-Domenici, advised reducing tax rates to 15 and 27 percent. Simpson-Bowles recommended cutting the corporate tax rate to 26 percent and Rivlin-Domenici suggested a corporate rate of 27 percent in exchange for jettisoning multitudes of corporate subsidies and tax breaks. Obama and most Democrats wouldn’t hear of it. Their mission is to soak the rich and hit their enemies, and that doesn’t involve cutting tax rates on them. That’s why we must insist on it, for the health of the economy as well as the body politic.
Of course, the Machiavellian Obama may pretend to move toward adopting some of the Simpson-Bowles recommendations before the 2012 election to appear newly “fiscally responsible.” If he does, be aware of the charade. As his long record of profligacy shows, he has no intention of seeing through major fiscal reforms. Tax increases of any kind would damage an already fragile economy by taking more money out of what’s left of the private economy. Besides, we hope that Republicans have finally learned their lesson about agreeing to Democrats’ tax increases in exchange for promised spending cuts. In 1982 President Reagan agreed to a budget deal in which the Democrats promised to cut $3 in spending for every $1 in tax hikes. They lied. The tax hikes arrived but the cuts never did. George H. W. Bush was duped in similar fashion when he agreed to tax increases in exchange for spending cuts, which of course never materialized. Most Republicans have finally tired of sprinting eagerly toward the spending-cut football while Lucy the Democrats constantly pull it away.
We need a flatter and broader tax base, which would force everyone to pay something to the federal government rather than exempt about half from paying anything at all. With everyone having at least some skin in the game, everyone would then have a stake in how their money is spent. Demands for accountability would rise, as would revenues. We also need permanent tax cuts and incentives, not gimmicky temporary ones that fail to stimulate growth because they d
o nothing to reduce uncertainty. The kooks’ goal is to institutionalize their new spending levels of 25 percent of GDP, which will then require ratcheting up tax rates forever. We cannot allow that spending level to become the “new normal.” Most reform advocates—and most of the American people—agree that the current labyrinthine tax code discourages the working, saving, investing, risk taking, and hiring necessary for growth and prosperity. Tax reform along any of the proposed lines would also raise revenues not by raising tax rates but by stimulating growth, jobs, and greater wealth creation.
Structural reform of the big-budget monsters of Medicare, Medicaid, and Social Security is also necessary to save those programs from complete collapse. Those who oppose major reforms of these programs argue that they would be imperiled by exposure to major cuts and the whims of the market. And yet, if nothing is done, the programs will buckle under the weight of their own unsustainability. All significant entitlement reform proposals take pains to ensure that those at or near retirement age would be grandfathered in to the existing programs and benefits. There must, however, be responsible changes for future program recipients. Ryan suggested replacing the giant, opaque, and fraud-ridden slush fund of Medicare with the same kind of health care plan enjoyed by members of Congress. Later gaining the bipartisan support of Democratic senator Ron Wyden, Ryan built reform around the concept of a “premium support” system where seniors, with federal financial help, could choose from a menu of private plans, each offering Medicare-equivalent benefits and with providers competing for their business. In a premium-support model, Medicare would make payments to the plan chosen by the patient, subsidizing its costs while giving the beneficiary more freedom to make decisions over his own health. Furthermore, the Ryan-Wyden plan would still offer the traditional fee-for-service option and provide more help for lower-income Americans and those who are sicker and at higher risk for getting ill. Medicaid would be converted into a blockgrant program to the states, in a way similar to the Clinton-GOP welfare reforms of the 1990s. This would allow the states to design a better range of options for their residents and increase the program’s efficiency. Ryan proposed similar reforms to the food stamp program in order to eliminate the perverse incentives that reward states for adding to their rolls. These proposals have provoked the ire of the leftists and others who refuse to acknowledge the dangers of the status quo. But we mustn’t get lost in the fog of political passions: these plans offer at least a meaningful starting point for reform, without which Medicare and Medicaid are going to end up in the emergency room, unable to be resuscitated.
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