Trading Massive New Debt for Unenforcable Promises of Future Cuts is Grossly Irresponsible

AUSTIN, TX -  The plan to raise the debt ceiling agreed on by the House this weekend is a total fraud, a vessel of broken promises, and a gross evasion of congressional responsibility to spend within its means, according to the Republican Liberty Caucus, a national organization of activists with official affiliates in 42 states. The Caucus Board of Directors blasted the latest deal as an insult to the basic American principles of individual liberty, limited government and private enterprise.

“The details will probably be secret until after the law is signed by the President,” says RLC Director Bill Westmiller of California, “but it is certain that it will authorize enough additional debt  to pay the costs of last year’s bailout, the Democrat’s stimulus, all the expenses of ObamaCare, and the continuation of extravagant federal programs implemented by both Republicans and Democrats over the past decade.”

The nearly three trillion dollar increase in the Debt Ceiling will take away all pressure on Congress to implement responsible spending policies for the next eighteen months, ensuring that spending and debt issues will not be prominent during the 2012 campaigns.

“This deal is a blatant violation of the promise from House Speaker John Boehner that every dollar of new debt would be matched by a dollar of cuts,” noted RLC National Chairman Dave Nalle. “All of the cuts are stretched over ten years, while the deficit spending will occur in less than eighteen months,” explains Nalle, “which means that we’re actually getting less than ten cents of current cuts for every dollar of perpetual debt. That’s not a deal, it’s a blank check for bigger government.”

The final plan includes unspecified spending cuts, which would be spread over ten years. For the coming fiscal year, there will be real cuts of less than $100 billion dollars. Since the bill assumes that the same level of reduced spending will continue for ten years, the “savings” are simply added together, for the supposed $1 trillion  of cuts.  There’s no real plan for specific long term cuts.

“Whether it’s one trillion or three trillion, it’s meaningless,” explains RLC Northeast Regional Director Vic Berardelli of Maine. “The Supreme Court has already ruled and all legislators acknowledge, that one Congress cannot impose any obligations on a future Congress,” says Berardelli. “That means that all of the promised cuts are not binding on the federal government after the next election.  They might as well not even exist”

The Supreme Court threw out the Gramm-Rudman Balanced Budget Act in July 1986, as a violation of the Constitution, by a 7-2 vote. Every prior budget authorization must be renewed by the new Congress, or it simply expires.

“There are no real cuts in the debt ceiling compromise,” says California RLC Director David Johnson. “Instead there are just promises of cuts to ‘projected spending,” which is another way of saying they’ve eased up slightly on the accelerator of the car heading for the cliff. These guys aren’t even trying.  I fully understand that the big cuts needed from defense and entitlement are controversial. But where are the smaller uncontroversial cuts? Why are there no cuts in corporate welfare? Why no cuts in foreign aid?”

The main source of added revenue is more than a trillion dollars obtained by auctioning off cell phone frequencies. All of those costs will be passed on to clients of the cell-phone companies with increased prices. Although technically not a “tax increase”, it will produce additional federal revenue that can be applied to new programs or expansions of old programs.

“This authorization, applauded by leaders of both parties, does absolutely nothing to reduce the debt,” says RLC Director Aleq Boyle of Georgia. “The deal actually allows a 50% increase over ten years, from $14.3 trillion to at least $21 trillion by 2021. Even if annual budget deficits were reduced by 100% over the coming decade, the actual public debt and annual interest due will increase more than it has in any prior decade. The pretense that the debt problem is solved is a perverse charade.”

“The fear-mongering about this issue is truly craven,” says RLC Vice Chairman Aaron Biterman.  “Telling people that failure to adopt this huge debt increase will result in U.S. bond rating downgrades, higher consumer interest rates, and possibly cutting entitlement payments. That’s all pure fantasy. The reason that the monopoly federal agencies cut bond ratings is because the interest demanded by the consumers of government bonds has increased, not because an agency lowers their rating.”

Currently, U.S. Federal Debt is nearly 100% of GDP, comparable with Italy (120%) and Ireland (114%). Those countries have had their debt ratings downgraded simply because of the level of their debt in comparison to their GDPs.  Two of the major U.S. ratings agencies say that adding more debt will not prevent a ratings downgrade: the Congress must show an earnest effort to reduce the outstanding debt, not merely the deficit.  This bill does not include enough cuts to offset the massive increase in debt.

“In any case, there is no reason to default on bond debt or interest,” adds Westmiller, “since the government has more than enough incoming revenue to pay all public debt, all pension checks, and everything else enumerated in the Constitution as a federal power. In fact, the Fourteenth Amendment requires that the U.S. Treasury honor all debt instruments and pensions ‘without question’,” says Wesmiller.  “Contrary to the claims of some Democrats, nothing in the 14th Amendment gives the President any power to borrow money at his sole discretion.”

“The most grievous flim-flam in this deal was trashing the requirement that Congress send a Balanced Budget Amendment to the states,” notes RLC Secretary Corie Whalen, “which simply won’t happen. The deal was modified to simply require one vote on the issue, which Democrats will easily defeat in the Senate. That ends any hope that Congress might actually allow the states to make a decision on balancing the federal budget.”

“The entire budget deal is a shameful fraud,” says RLC Chairman Dave Nalle. “It doesn’t do what our leaders say it will do; it allows increased revenues demanded by the President; it only pretends to cut spending, and it gives Democrats the power to force tax increases and other revenue raising measures through a Super Committee before the end of the year.”

“Although this agreement was a failure and a fraud,” concluded Nalle, “some praise goes to the small cadre of newly elected fiscal conservatives in the House, most of whom were endorsed by the RLC.  They at least spoke up for fiscal respnsibiity and forced a change in the terms of the debate. They stuck to their principles in the face of hysteria and doomsday threats. The RLC will be looking for more responsible candidates to join them in the House and the Senate in 2012.”

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The Republican Liberty Caucus is a nationwide grassroots organization which promotes individual liberty and limited government within the Republican Party.   You can find more information about the Republican Liberty Caucus at www.rlc.org

Speaker John Boehner is engaged in an epic struggle to pass some sort of compromise plan to raise the debt ceiling while cutting spending, moving forward with desperation and a certain amount of bullying to push through a plan which has now been modified and reduced to the point where it can only be described as absurd. Feeling the pressure from the endless fearmongering of President Obama and Timothy Geithner, Boehner seems to have gone off the rails with a plan which actually offers fewer cuts than the Democrats and no spending cap at all.

It’s a very heated issue in which some of the facts are being lost, so let me straighten them out.

Boehner’s Plan

Boehner’s current proposal is being described in some quarters as an increase in cuts from his earlier proposals, but in fact the cuts included are bizarrely inadequate. The plan currently includes $1.2 trillion in cuts over 10 years with another $1.8 trillion in unspecified cuts to be implemented by a special committee at some point in the future, in exchange for a $2.7 trillion increase in the debt ceiling.

There are a number of problems with this proposal.

The first phase of cuts only comes out of discretionary spending and all cuts to entitlements are left to the bipartisan committee at some future date. Whether this committee or its cuts will ever happen is highly debatable when the balance in Congress shifts next year and plans get rewritten.

The cuts are spaced out over a 10 year period, amounting to only $300 billion a year, and with more than half the cuts still in abeyance, the real cuts in the first year are only $120 bilion or likely even less. In fact, the way the cuts are structured the cuts in the next year may be as low as $6 billion. And because the cuts are not enough to offset increases in debt just from interest, spreading them out over 10 years means that they will be outpaced by debt increase and never come close to catching up. Ten years of small cuts to offset an immediate debt limit increase only works if there are not more debt limit increases down the road, and with cuts so small further increases are unavoidable.

The total cuts over a 10 year period, assuming even the entitlement cuts happen is less than the proposed budget deficit for the next two years, leaving 8 years worth of further debt increase in the next 10 years adding up to an increase of almost $10 trillion in the national debt. So the net result of the plan is a massive increase of the debt, not any real reduction.

The current Boehner plan also includes no provision to pass a strong Balanced Budget Amendment as a prerequisite to any debt limit increase. Every Republican in the House and Senate signed on to the Cap, Cut and Balance pledge and Boehner’s plan fails to meet its requirements. It also puts no caps on federal spending except for discretionary spending which makes up about a third of the budget.

Boehner’s plan is so bad that Sen. Harry Reid can actually make an argument that his proposed plan has more real cuts than Boehner’s does, because Reid’s plan includes substantial cuts to military spending and more overall cuts per year. It still results in a huge net increase in spending, and it raises taxes on those who already shoulder most of the tax burden, but in total it’s just a different bad plan, not really any worse than Boehner’s.

The Fearmongering

Perhaps the biggest lie in this whole melodrama is the claim coming from the White House and from Tim Geithner that the US will default and have our credit rating downgraded next Tuesday if we don’t raise the debt ceiling. These claims are nothing but an irresponsible intimidation tactic.

As Senator Rand Paul eloquently points out, and as I explained in detail in a previous article, there is absolutely no need to default on our debt if the debt ceiling is not raised. By prioritizing spending we can easily meet the requirements to servie the debt and provide for entitlements out of incoming revenue and we could probably keep doing that for 6 or 8 more months before it became a real problem.

Of course, this would put a lot of pressure on the administration because Obama and Geithner would be the ones who would have to make those spending decisions and they would get the blame for cutting subsidy programs, furloughing federal workers, closing down national parks and the other small short-term austerity measures necessary to meet obligations. They’d rather scare us with empty threats than admit the truth that we’re broke and need to tighten our belts – even in the federal government.

The other big lie here is that raising taxes on the “wealthiest among us” will actually solve the problem. If we were to raise taxes substantially on the top 1% of earners that would not be enough to balance the budget. Even raising taxes to the 70% rate of the Reagan era – almost double the current rate – would only raise about $300 billion more a year at a huge cost to the economy. So when Obama talks about raising taxes on the rich, he’s mostly making an argument for a symbolic act of class warfare.

What they also don’t point out is that we’re just as likely to have our credit rating downgraded if either of the current proposals passes. Because both Boehner’s and Reid’s plans are so inadequate they don’t represent the kind of real solution to the long term debt problem which international credit agencies are looking for, so they’re really worth nothing at all.

Real Solutions

The reality is that we need to put all this bickering aside and pass a real plan which actually addresses this problem in a substantive way. We’re not getting out of this mess without major cuts and a real cap on spending along with some policy changes which will spur economic growth.

• Pass a Balanced Budget Amendment and cap spending at a level tied to a percentage of GDP like the 18% proposed in the Cap, Cut and Balance pledge. Only by capping future spending can you make long-term cuts offset short term debt increases.

• Make cuts equal to or greater than any increase in the debt limit and make them take effect more quickly so that they reduce debt faster than interest increases it. A minimum of $600 bilion a year for 5 years would be a responsible proposal. And to do this you would need to go beyond the Boehner proposal to go after both military spending and entitlements. Just ending our current foreign deployments would take care of most of these cuts.

• If a tax increase is what it takes to get President Obama on board for real cuts, then let him have an increase of 10% on those earning in the top 1% (over $380 million a year), but offset that increase with a 10% cut in capital gains, which would have a great stimulative effect on the economy.

• Do the only thing which will really spur the economic growth which will get us out of a recession relatively painlessly. Cut corporate taxes. They don’t bring in that much money and that revenue is going down as companies offshore to avoid what is now the highest corporate tax rate in the world. Cut the rate substantially or eliminate all corporate taxes so that they will come to the US as a tax haven instead of fleeing and taking jobs and money out of the country with them. Short of lowering wages – which is not at all popular – cutting taxes on businesses is the easiest way to create jobs and grow the economy.

At this point the melodrama surrounding this issue is becoming embarrassing. Real problems need real solutions, not pandering, fearmongering and passive-aggressive walkouts on negotiations. Boehner, Reid, Geithner and Obama need to start acting like grown-ups, make serious proposals and work out compromises which give up more than either side wants for the good of the people and the nation.

This article appeared previously on Blogcritics Magazine.

New Hampshire Democrat Governor John Lynch announced that he will let a $10.2 billion, Republican-crafted budget for the state become law without his signature.

The Republican Liberty Caucus of New Hampshire sent out a press release congratulating House Speaker William O’Brien and House Republicans for passing a responsible budget that completely reverses the course of previous legislatures and historically cuts spending in New Hampshire by 11.7 percent, setting state government on a new course to fiscal sanity.

The RLC endorsed over 80 of the current elected House members. That coalition, no doubt, has given the Republican House the backbone needed to tackle the budget, Right to Work, and a favorable business climate.

“There is no doubt that this budget is historically positive for the people of New Hampshire,” said Andrew Hemingway, chairman of the Republican Liberty Caucus of New Hampshire. “Speaker O’Brien and the House members we elected in November [did] exactly what they promised voters they would do by cutting taxes and spending without any budget gimmickry.”

The balanced $10.2 billion New Hampshire budget for Fiscal Years 2012-2013 relied heavily on House leadership’s position that budget writers could not exceed revenue projections. The Senate was only able to shift revenue projections by 0.4 percent from the House projections in January. At the same time, House leadership was also able to convince Senators not to raise new taxes, fees or add additional downshifting to the counties, cities or towns of the state. In fact, the House was even able to secure additional tax cuts to increase business traffic from out-of-state shoppers.

In general and education trust fund spending, the House was able to secure a $4.42 billion budget, a 12.8 percent decline from the previous cycle. The budget cut is the largest in modern history—maybe longer.

“As an organization that understands the principles that lead to the most prosperity for the most people involve less government spending, lower taxes and fewer bureaucrats enforcing senseless regulations, we are looking at this budget as the first gleam of light from a new dawn of common sense governing,” Hemingway said. “I expect the voters of New Hampshire to respond quite favorably to the principled stand taken by House Republicans, and against the scare tactics and deception of those who would prefer politics as usual.”

Not only did this budget historically reduce appropriations by about $1 billion in all funds and $467 million in general funds, it also eliminated 1,500 unneeded government positions (most of them unfilled, anyway), and it reduced some of the more onerous taxes and fees instituted by the Democrats when they were in power, such as the surcharge on auto registrations. The budget also included comprehensive reforms to the State Retirement system—the first step toward eliminating an unrealistic system that taxpayers can no longer afford.

At the same time, the House compromise budget fully funds education by sending $4 million more than the governor’s budget and 9.5 percent more than the current budget to the local cities and towns. As recognition that restorative change takes time, the budget also funds Health and Human Services programs for the developmentally disabled, children in need of services, children with special needs, domestic violence programs and adoption subsidies, while also prohibiting the use of taxpayers’ money for abortions.

What the heck is going on in Montana?

Montana Republicans have a huge majority in the State House and a small majority in the State Senate, so they should be moving productive legislation along without trouble. Unfortunately, two recent examples show that they are not committed to common sense government at all, but are instead beholden to special interests, corporate socialism, and the nanny state.

You’re not even going to believe the legislation being courted by Montana Republicans! Check it out:

Montana Republicans Try to Gut Medical Marijuana Law

With the exception of Republican Liberty Caucus-endorsed State Representatives Jerry O’Neill and Mike Miller and several moderate Republicans, the rest of the Republican elected officials in Montana voted to gut the voter-approved medical marijuana law last week.

Because Governor Brian Schweitzer (Democrat) vetoed the Republican attempts to kill the law, BusinessWeek reports that “Many lawmakers from both parties say something needs to be done to rein in medical marijuana in Montana now that it has reached beyond those with severe illnesses for whom voters in 2004 meant the law to apply.”

According to the Montana Department of Public Health and Human Services, there are 29,948 registered users in the state. As we reported earlier, last month the federal government decided they needed to step in by raiding medical marijuana businesses in the state under the guise of investigating “drug trafficking and tax evasion.” This despite a promise from the Obama Administration claimed it would not override state law.

According to BusinessWeek,

“Three lawmakers from each chamber will begin meeting this week in a conference committee to figure out the final form of the overhaul measure, Senate Bill 423, before it lands on the governor’s desk. Since the beginning of the session House Bill 161, a repeal of the voter-approved marijuana law, has been the favored measure of Republican leadership. House Speaker Mike Milburn, R-Cascade, carried the bill through the Legislature but the possibility of a governor veto forced Republicans to work up a contingency plan.

Last month, Republican lawmakers made a last-minute introduction of a bill to overhaul of Montana’s medical marijuana industry. After Republican fears of a governor veto became a reality Wednesday, the overhaul measure carried by Senate Majority Leader Jeff Essmann, R-Billings, has become what is likely the last chance the Legislature has to restrict medical marijuana. But the measure has not had an easy passage and it still has key hurdles left to clear with just a few days left in the session to do it.”

The only common sense on this issue, aside from Governor Brian Schweitzer, is from RLC-endorsed legislators like Jerry O’Neill and Mike Miller. According to Representative Miller, “If the federal laws (related to the Montana state medical marijuana law) were gone, it could be just another prescription filled by a pharmacist. The bottom line is that the legislature did not do its job and put the appropriate rules/laws in place once the initiative passed in 2004. I believe it is up to the legislature to fix the mess it created. And it is a huge mess and it is being grossly abused by some,” Miller said.

Miller took what apparently is an unpopular position, concluding at his website, “While many people disagree with my vote to not repeal, I hope this helps them to understand it a little better.”

RLC-endorsed Reps. Jerry O’Neill and Mike Miller voted to protect the Montana medical marijuana law.

Renewable Energy, Curbing Property Rights via “Corporate Socialism”

According to LibertarianRepublican.net, “Sounding like something straight out of an Ayn Rand novel, a renewable energy corporation out of Canada is pushing legislation to allow for seizure of private property rights in Eastern Montana. The Bill pits small landowners such as ranchers in Eastern Montana, against government-backed corporate interests and many environmental groups in support of renewable energy.”

From the Great Falls Tribune, “Montana Senate revives eminent domain bill”:

“HB 198 would grant private developers — including Canadian developer Tonbridge Power — the ability to use eminent domain authority to condemn private property so that transmission lines can be built.

The company wants to build a 214-mile international Tie Line through Montana and Alberta. The bill would [give] Tonbridge the authority it needs to condemn private property along the proposed MATL route in Montana.”

After nearly three hours of debate, 16 Democrats sided with 12 Republicans to pass the measure.

Republican proponents of the measure said if the legislature failed to enact HB 198, it could doom the state’s economy.

“We need an export economy in this state,” Senator Alan Olson said. “We make money to fund our education system, and we make money to fund our senior services on an export economy. If a minority interest is going to shut down an export economy, if we continue to circulate that same stale dollar around the state, we’re done.”

Opponents of the measure, including Sen. Art Wittich, R-Bozeman, said the bill would give private corporations unprecedented power, while sacrificing the rights of private property owners.

“It’s corporate socialism at its best,” Wittich said.

“To me, good government is limited government that respects everyone’s rights and properties,” Wittich says. “I support accountability in government spending and promoting private sector prosperity by adding value to our resources.”

The bill goes for a final vote on Thursday. Then, it heads to Democrat Governor Brian Schweitzer for his signature.

It is not known if Schweizter would sign the legislation, but it appears likely that he would.

RLC member Eric Dondero worked to get a property rights initiative on the ballot in Montana in 2006. Here, he is collecting a signature from a resident.

Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, RLC-endorsed freshman State Representative Glen Bradley of Youngsville wants North Carolina to issue its own legal tender backed by silver and gold. He introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit — potentially allowing residents to trade gold for groceries. “I think we’re in the process of inflating a dollar bubble that could be very devastating. The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury.”

Bradley predicts that world events could soon prove him prescient. “I don’t necessarily believe [the Federal Reserve] is about to collapse right now,” said Bradley, 37. “There are still a few things they can do with qualitative easing to sort of extend their survival. It’s just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today.”

Mr. Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I.

A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines.

Bradley’s bill has yet to attract any co-sponsors among his fellow Republicans. The office of House Speaker Thom Tillis declined to say whether the Republican Party leadership supports Bradley’s proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die. “There are a lot of diverse opinions and diverse views in our caucus,” said Jordan Shaw, Tillis’ spokesman. “I don’t think we’re going to forecast what will happen.”

Thanks to the Raleigh News Observer, DrudgeReport.com, and libertarianrepublican.net for covering Rep. Bradley’s legislative proposal.

Despite the fact that over 70 Representatives were not present in Congress to vote, December 21 was a terrible day for advocates of individual liberty and limited government.

First, the Federal Communications Commission’s 3 Democrat majority voted to approve proposed rules that amount to a hostile takeover of the Internet by a government agency. The proposal — misleadingly described by proponents as an attempt to insure “net neutrality” by guaranteeing equal access to the Internet — was introduced a year ago by Obama’s appointed FCC chairman Julius Genachowski.

A federal court has ruled that the commission has no authority to regulate the Internet, and a bipartisan group of Senators and Representatives warned Genechowski not to attempt to impose a regulatory regime on the Internet earlier this year. The FCC, an unelected bureaucracy, still has not released the full text of its net neutrality rules yet.

You better believe that this unconstitutional power grab to secure “net neutrality” by the FCC is just a small sign of whats to come in the realm of federal regulation of private citizen behavior.

And, on that note, the U.S. House of Representatives and U.S. Senate both passed the so-called Food Safety and Modernization Act — the largest government power grab as it relates to food since 1938 (when Congress gave the FDA the authority to oversee the safety of food, drugs and cosmetics).

But, have no fear, it will only cost $1.4 billion to implement the new “safety” regulations.

The law will give the Secretary of Health and Human Services and the FDA tremendous control over the U.S. food supply. It also puts all food and all U.S. farms under Homeland Security and the Department of Defense in the event of contamination or an ill-defined emergency. The bill includes NAIS, an animal traceability program that threatens all small farmers and ranchers raising animals. And it will allow the government to mandate antibiotics, hormones, slaughterhouse waste, pesticides and GMOs.

Not only did 74 members of Congress fail to vote on the measure, but the bill also passed the Senate without a single dissenter. Fortunately, the new Congress will be in session soon, where I have no doubt there would have been someone with the courage to hold up this anti-liberty legislation.

As we switch to a session of Congress with Republicans in the majority of the House of Representatives, the Republican Liberty Caucus’s newly released Liberty Index ratings for 2009 provide an important reminder of the positive impact that being out of power — and in the minority — had on Republican legislators. With a clear anti-liberty, big-government agenda coming from the White House and the Democrat leadership, Republicans embraced their role as the “party of no” in 2009 and were more true to basic principles of limited government and individual liberty than they have been in many years. Our Liberty Index, which has been compiled every year since 1992, reflects this environment with more high ratings on both the Personal and Economic Liberty scales than ever before, particularly in the U.S. House.

A not-so-surprising standout in the House of Representatives rankings is Jeff Flake (R-AZ), who is the first member of Congress in the history of the Liberty Index to score a perfect 100/100 in the Economic and Personal Liberty components of the index. Flake was not alone at the top, with perennial top scorers Ron Paul (R-TX) and Dana Rohrabacher (R-CA) not far behind. They both scored 100 on Personal Liberty and 96 on Economic Liberty because of problematic votes on earmarks and a technology bill. Other than these minor exceptions, Paul and Rohrabacher were outstanding champions of liberty.

With Democrat spending completely out of control, many Republicans were given an opportunity to oppose their policies and as a result score very well on Economic Liberty. Forty-eight House members scored perfect 100s on Economic Liberty. Personal Liberty scores were less consistent, though 115 House Republicans scored in the Libertarian quadrant on their combined scores.

Senate Republicans were somewhat less impressive than their House allies, but five did manage to score perfect 100s on the Economic Liberty scale. Because of the types of votes that came up in the Senate, it was more difficult to score well on Personal Liberty, but 31 Senate Republicans did have combined ratings in the Libertarian category.

In both houses Democrats scored substantially less well on both Economic and Personal Liberty issues. Two-hundred and twenty-five Democrats in the House and 36 in the Senate scored so low that they were scored Authoritarian, siding with increasing government power and reduction of civil and personal liberties. Three House Democrats, all from California and including outgoing Speaker Nancy Pelosi, scored perfect 0/0 results, voting against liberty on every major issue to come before them. Senate Democrats did somewhat better, especially on Personal Liberty, but Senator Ted Kaufman (D-DE), who was fortunately never elected to office, was the one Senator to score an imperfect 0 on Economic Liberty.

In many cases the deciding issues which separated those who did well from those who did poorly were votes that were split on non-partisan lines, particularly over issues of military spending, foreign policy and national security, where both parties have strong internal divisions.  Many Republicans are rejecting the policies of the Bush era and moving toward limiting America’s overseas commitments, while some of the most powerful Democrat leaders remain committed to a policy of war and nation building.  And, of course, many of the important votes where Republicans took a stand against bigger and more intrusive government were votes where their efforts were doomed and produced nothing more than good ratings on this index due to their minority status.

The Liberty Index is based on forty roll call votes, twenty on issues of Economic Liberty and 20 on issues of Personal Liberty in each chamber. The votes are compiled and analyzed by Professor Clifford Thies who holds the Eldon R. Lindsay Chair of Free Enterprise in the Economics Department of Shenandoah University. He is assisted by an anonymous panel of experts who have worked with him on the project for many years. This year his work is dedicated to the late David Nolan, whose system of charting political ideologies has been a valuable tool for educating voters and promoting libertarian ideas.

The full results of the 2009 Liberty Index are available in PDF format from the Republican Liberty Caucus, including charts of the distribution of the ratings and detailed analysis by Professor Thies. For comparison you can find past results going back to 1991 in the RLC archives.

In his historical tour de force, On Power, Bertrand de Jouvenal traces the process of centralization of power in Europe from the fall of Rome. He paints a picture of an unstoppable centripetal force, power, whose ever tightening grip on humanity was hastened first by the increasing power of monarchs and then by the rise of democracy.   Prior to mass rule that began with the French revolution and Napoleon, war was limited by the resources of local feudal rulers.  Total war became possible with the rise of democracy and nationalistic centralization. The great wars of the twentieth century which saw unprecedented numbers killed were the product of nationalism, mass rule and socialism, indeed, of national socialism and socialism in one country.  These last are the ideologies of both the Democratic and Republican parties today.

For a century the United States showed that in the absence of centralization economic progress would come quicker, the public made better off, and war limited to local expansionism.  But the Civil War began a process of Progressive centralization, and elite Americans of the Gilded Age after the Civil War, envious of the status of German universities, sent their sons to graduate school in Germany and were surprised when they returned advocating ideas that would forestall freedom and progress.  Not having access to the ideas of von Mises, Hayek and Schumpeter, elite Americans adopted German historicism, according to which they, as an expert elite, deserved power and that power ought to be centralized to that end. They chose to remake America in Germany’s image fifty years before the rise of Hitler.

We live with the heritage of their nationalist and now internationalist Progressivism.  Progress has slowed; retirement savings are insufficient to cover the needs of the largest cohort of retirees in the history of the world; the Progressive health care system has faltered and  been redesigned to  restrict care; and for the past forty years Americans have seen the”promise of American life”, an ever increasing standard of living, betrayed and slowed to a halt as the Federal Reserve Bank and the federal government  have transferred ever more resources to banks and speculators.

De Jouvenal saw the rise of Franklin D. Roosevelt as the ultimate success of “power” in the United States.  But the process has taken longer and become more intense as the centralizers’ ideas, one after the next, have failed and destroyed sections of America’s freedom and affluence.  The nation retains its preeminent role because of  the nineteenth century’s gains and because its diminishing sphere of private initiative remains larger than under the rigid socialism that dominates Europe and the rest of the world.

No one can calculate the damage that power has done to the nation.  It is probable that, based on the absence of real wage growth since the gold standard was abolished in 1971 and the 2% compounded growth of real wages between 1800 and 1971,  the real hourly wage today is but 40% of what it might have been without the depredations of the federal and state governments.  But Americans are relatively worse off than that because of increases in taxes at the state and federal levels.

Both parties, Republican and Democratic, have participated in the relentless expansion of power.  The Republican is the more likely of the two to be transformed from a socialistic, elitist party, to one that represents freedom and decentralization. Hence, there is no more important task in politics today than that which the Republican Liberty Caucus has set before itself: to reform the GOP and transform it into a party of freedom and decentralization; to overturn the process of centralization of power; and to reestablish America as a land of freedom.

Given the low quality of public debate and the domination of the public media, this is a difficult task. Struggle we must.

Governor Gary E. Johnson has been called the next Ron Paul.  He has not yet announced his candidacy for president, but has been widely mentioned as a potential Republican presidential candidate who reflects the Tea Party’s and liberty Republicans’ perspectives.

I recently blogged about Governor Johnson’s background.  He received good grades from the Cato Institute when he was governor and has a taste for honesty that is rare in politics and business today.

Besides serving as governor of New Mexico for two terms, he had built a significant corporation from scratch, which he sold in 1999.  Readers who would like to contribute or help Governor Johnson can find contact information on http://ouramericainitiative.com/. He also has a Facebook group page with 2,000 members.

Langbert: Governor Johnson, it is a privilege to interview you.  I teach business administration at Brooklyn College.  What are three things that you learned from your business career that could be applied to the federal government or that you did apply as governor of New Mexico?

Johnson: I started my company in 1974 and I was the only employee.  In 1994 we had 1,000 employees.  Things that I learned and applied as governor include the importance of hiring good people; cutting mistakes short; and sticking to basic principles.

I’m good at hiring people and have a great track record.  But mistakes are inevitable. When you make a mistake in hiring, you need to cut it short.   As governor, I avoided political appointments as much as possible.  There was one instance where I was forced to make one, and I closely monitored the individual’s performance.

The obvious things are most important. The basic principles:  being on time, sticking to principles, telling people to tell the truth.  As governor, I sat down in cabinet meetings and I told people to tell the truth.

L: One of the realities of large organizations is the use of information to manage conflict and improve social compatibility and coordination.  Managers call these patterns interpersonal skills.  Might not 100% truth telling interfere with interpersonal skills? Of course, if everyone in industry tells the truth, costs and performance will be improved.

J: On the contrary, being honest 100% of the time makes it easy.  If you tell the truth, you don’t have to remember anything.  What you’re talking about is managing conflict.  Someone once said that honesty is where what you say and what you think are the same as what you do.  But of course you can say things that minimize conflict.

L:  To what degree is it possible to cut the federal budget? How would you go about cutting?

J: I faced the same situation in New Mexico as the president faces.  I could have cut big government in New Mexico drastically and no one would have noticed.  (That is, these government employees produce no value for the economy.) The spending train is out of control.  But the Democratic legislature fought me and the courts handed down adverse rulings.  The legislature was 2 to 1 Democratic.  Common sense has gone out the window.  First you have to stop the spending.  The time is ripe for doing so in Washington, and it’s accomplishable.

We are a bankrupt nation.  We’re not taking care of our own house. Unlike the generation before us, interest and principle payments are due now. The enormous budget deficits will lead to inflation and an ever weaker dollar.

L:  What is your position on the bailout and TARP?

J: I would have opposed both.  Government should not have been involved in this. The Paulson connection amounts to this being an inside job.  Why should Goldman and AIG be saved but not Lehman?

L: What is your position on health reform?  How would you recommend the system control health costs?

J:  I would recommend a free market approach to health care reform.  Increase supply through the free market.  Gall Bladders R Us. We ended up with an insurance entitlement rather than health care.  Extending the current approach will lead to shortages and rationing health care.

The same principle applies to education.  We should blow the lid off publicly controlled education.

L: What is your position on the Fed and the gold standard?

J: The Federal Reserve deserves full responsibility for the housing bubble and as well deserves credit for mitigating the bust.  Overriding that, the dollar is now worth a nickel.  I understand the arguments for a free market in money and I support them.  I shy away from the phrase “regulate the Fed” because I do not want Barney Frank deciding monetary policy.  I wouldn’t say the Fed needs to be abolished.  I understand the argument for a gold standard, though.  The US government should be pursuing a strong dollar policy, which the Fed hasn’t done.

L: What is your position on the Middle East and Israel?

J: I’ve been to Israel and the Golan Heights and I understand the threats Israel faces from outside and within. I can’t summarize my position as the issues are too complex. I do believe in a strong national defense.  But our security is not threatened by Iraq and Afghanistan.

L: Where do you stand on Iraq and Afghanistan?

J: I believe we should pull out of both and return our focus to fighting terrorism. The focus needs to be protecting America. I’m not sure if that is still the mission in Iraq and Afghanistan. I was surprised that Obama increased US presence in Afghanistan.

L: What about Social Security reform?

J:  Social Security is flawed.  When it was brought into existence the life expectancy was  55. Benefits started at 65.  Now, life expectancy is 75, and benefits start at about the same age. It’s a Ponzi scheme.  A combination of benefit reduction and/or privatization are necessary.  At least part of Social Security should include private accounts that are counted in your estate.

L: What do you think of making Social Security voluntary and converting it into a defined contribution plan?

J: That would make it viable.

L: What is your position on states’ rights and state sovereignty?

J: The states are 50 laboratories of democracy.  The burden that the federal government places on the states is outrageous.  The same is true of health care.  A return to federalism is needed.

L: Thank you, Governor.  I am certain that liberty Republicans will be interested in learning more about your ideas.

Walter Weyl was one of the three founders of the New Republic, all of whom were pivotal in the creation of so-called “state activist liberalism”, an Orwellian phrase if there ever was one. Weyl was a professor at the Wharton School of Business and advocate of socialism. His book, New Democracy, is not as popular today as Herbert Croly’s and Walter Lippmann’s, his partners’. But Weyl’s book is the most prophetic and forthright. In it he argues (unlike Croly and Lippmann who were not so explicit) that Progressivism (the ideology of Theodore Roosevelt -R- and Woodrow Wilson -D-) would lead to socialism.

The culmination of Weyl’s ideas has occurred. The close linkage between the Progressivism of the Rockefeller Republicans (of whom Theodore Roosevelt was the first) and the social democracy of the Democrats (that traces back to Franklin Roosevelt and William Jennings Bryan) is now evident. With the bailout we see that both Progressivism and social democracy are, as Weyl knew and advocated, complementary versions of socialism.  The triumph of Progressivism was, as Gabriel Kolko put it, the triumph of conservatism.

One side effect of this is we now know what to call them. They are not  “liberals”, which is what libertarians should be called. They are not “Progressives” because no ideology is more conservative than socialism.  Nor are they “social democrats” because they do not believe in democracy, preferring pandering to Wall Street and other special interests, especially public sector unions, failed manufacturing firms and banks to democracy.  Rather, they are SOCIALISTS.  I therefore say to you now:

KNOW YE BY THESE PRESENTS THAT HENCEFORTH I, MITCHELL LANGBERT, REFUSE TO CALL  ROCKEFELLER REPUBLICANS AND DEMOCRATS BY ANY OTHER THAN THEIR TRUE NAME: SOCIALISTS.

A second side effect is that there is an important struggle ahead: to retake control of the GOP.  In the early twentieth century the GOP was the party of Progressivism.  William Howard Taft was what today would be called a conservative, and Theodore Roosevelt bolted the GOP to start the Progressive or Bull Moose Party by which time he was aggressively socialist.  William Jennings Bryan had captured the Democrats in 1896 on behalf of populism, and these ideas found final articulation not in the Progressivism of Wilson, who was for most of his life a Bourbon or laissez faire Democrat, but of Franklin D. Roosevelt. The fact is that most of FDR’s ideas had already been advocated by TR in 1912.

The GOP never recovered from the harm that TR did. Subsequent presidents, Harding and Coolidge, were not ideologically astute and did absolutely nothing to alter the Progressive institutions that Roosevelt and Wilson had initiated. Hoover was a Progressive from the time he had worked for Woodrow Wilson as his food industry price fixing Czar during World War I.  The New Deal was just a continuation of Hoover’s failed Progressive ideas such as using public works to cure unemployment. Eisenhower did nothing to reduce government and added his share, such as the Interstates.  Goldwater and Reagan were a departure, but George W. Bush was part of the Progressive tradition, and waited until several years into his office to make it clear.

We are left with a situation where socialist extremists are in control of both parties. The pro-bailout Republicans of McCain and Bush and the socialist Democrats constitute a twin-headed hydra.  We can win, though, because a healthy 30 percent of America still favors freedom.  If we align ourselves with various other interests, such as the religious,  we can win.

But there is a big fight ahead. Liberty Republicans need to think about how to convince the Rockefeller Republicans to move to their true home–the Democratic Party.  Yes, let’s get rid of them.  They predominate in the unwinnable Blue states anyway, and the public will not care if oil, health care and insurance executives align themselves with the party of greed, the Democrats.

In any case, we have a good argument:  the pro bailout Republicans lost because of their ideas. They have failed. They should step aside.

Mitchell Langbert blogs at http://www.mitchell-langbert.blogspot.com.