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UNCONTROLLED
GOVERNANCE
by Senator Doug Whitsett 3/30/10
Our progressive
democratic government is simply out of control at
all levels. Their rapidly expanding entitlement
programs are a Ponzi scheme that, if not reined-in,
will bleed this nation dry.
Those in charge are
exhibiting near complete disregard for our state and
our federal constitutions. They are displaying
unreserved indifference to the will of the people
that they were elected to represent. They have even
begun to label those of us who disagree with or
abhor their actions as dissidents. Some are
suggesting that we may be right wing terrorists.
Others speculate that we may be racists.
They appear to be
unable to comprehend that the people they represent
are genuinely concerned with their uncontrolled and
unsustainable spending that is bankrupting our
states and our nation. They deny that we should be
upset that in the face of the worst recession since
the 1930’s our federal, state, and local governments
continue to levy new and expanded taxes and fees
that further oppress our economies. They dismiss our
concerns that we have no way to pay for the expanded
entitlements they insist on creating .They persist
in defending the stifling, job killing regulations
that have caused the near destruction of our private
sector economy. They maintain and accelerate their
absurd plans to replace earth’s fossil fuel driven
economy with non-nuclear renewable energy as well as
their claims that the fundamental change can be
accomplished without creating world-wide poverty,
hunger and misery. They continue to assure us that
regulation of everything that moves or breathes is
required to save our environment even though the
United States’ environment is second to no place on
earth. They deny the reality that only wealthy
nations can afford to invest in protection of the
environment.
Only private sector
wealth can create the family wage jobs that generate
the tax revenue required to support government
services. We all know that public sector jobs are
not sustainable without that private sector source
of tax revenue. Yet they continue to escalate their
effort to redistribute America’s rapidly diminishing
private sector wealth. Wealth cannot be created by
the government taking from those who work to give to
those who will not work. It is a self-fulfilling
prophecy of failure.
The progressive
democrats do not appear to comprehend that it is
their own actions that are systematically destroying
the economic wealth and the moral fiber of this
great nation. Their celebration of the recently
passed ObamaCare is a classic example of their lack
of economic understanding.
That bill effectively
nationalizes one sixth of the United States economy,
purportedly to save our economy large sums of money.
However, the ink on Obama’s signature was barely dry
before publicly owned companies began to file
sharply reduced earnings projections that are the
direct result of provisions of the bill. Those
earnings reductions can only result in either
increased consumer prices or reduced job
opportunities. The companies are required by the
Security and Exchange Commission to promptly file
changes in earnings projections under penalty of
fines and prosecution. In the classic “shoot the
messenger” response, the Congressional progressive
democrats are now summoning these corporate leaders
to committee hearings to explain the audacity of
their actions.
The fact of the matter
is that we the people have allowed our government to
become our master rather than our servant. And
government has not become a good master; rather, it
has become more like an abusive dog owner.
Picture an owner that
uses a chain to choke their dog nearly to death, and
then expects, and receives, the dog’s gratitude and
affection when that pressure is temporarily
released. Consider in your mind the image of that
dog licking the hand of the abuser and groveling at
their feet.
How does that image
materially differ from what our government is now
doing to its citizens? Moreover, how does the image
differ from that which existed when our founding
fathers pledged their wealth, their sacred honor and
their lives to throw off King Georges shackles?
Sir Winston Churchill
said it best:
“If you will not
fight for right when you can easily win without
bloodshed; if you will not fight when victory is
sure, and not too costly; you may come to the
moment, when you will have to fight with all odds
against you; when you have only a precarious chance
of survival. There may be a worse case. You may have
to fight when there is not hope of victory at all,
because it is better to perish than to live as
slaves”
After the end of World
War II, Winston Churchill was voted out of office by
progressive socialists that promised the people tax
funded universal health care, and a cradle to grave
welfare state. Their campaign slogan read “Let us
face the future”. It could just as well have
read “Change you can believe in”
That was the tipping
point from which Great Britain has never recovered.
That once great empire has been reduced to an island
nation with little economic global relevance.
I believe that our
nation has arrived at a similar tipping point. To
continue on the current path will result in the
descent into socialism. Historically, all socialist
states have failed, and most have eventually fallen
into communist dictatorships.
The time for we the
people to take back our government is here, today.
We must not be intimidated. We must speak out and
demand to be heard. We must build momentum toward
the November elections.
This time,
failure is not an option. We must all work together
for the common purpose of restoring a strong, fiscal
conservative America.
STATE AND FEDERAL
STIMULUS REPORT
The 2009 Oregon
stimulus has spent a little more than $93 million of
borrowed money on deferred maintenance projects. The
good news is that a number of needed improvement
projects have been completed. The bad news is that
the cost of projects like reroofing an abandoned
building, painting, moss removal, and replacing
light bulbs will be amortized over twenty years.
The annual debt service
cost for the $93 million spent to date will be about
$7 million and will total more than $140 million
over twenty years. Using federal job creation
accounting standards, the state stimulus has created
about 600 jobs according to a recent Oregonian
article. The cost of creating a single job for a
single year appears to exceed $235,000 over the
twenty year debt service of the bonds.
The 2009 federal
American Recovery and Reinvestment Act (ARRA) has
invested more than $1.5 billion in Oregon and more
than $200 million in the five counties in Senate
District 28. That borrowed money has been spent
almost entirely on five entitlement programs.
The Supplemental
Nutrition Assistance Program (food stamps) has been
increased by $80 per month for a family of four and
has been extended to an additional 90,000
Oregonians. More than 680,000 Oregonians were
receiving food stamps in January 2010.
More than 675,000
elderly and disabled Oregonians received a one-time
payment of $250 to supplement Social Security,
Supplementary Security Income, Railroad Retirement
or disabled veterans benefits. The total payout was
about $169 million.
Unemployment Insurance
benefits have been extended since 2008 through the
Emergency Unemployment Compensation program. Those
benefits were due to expire this month but were
recently extended yet again. A second unemployment
benefit increased the monthly payment by $25 per
month. More than 385,000 Oregonians have benefited
from these programs funded by an increase in the
Unemployment Insurance payroll deduction.
Finally, the Making
Work Pay credit provides up to an $800 tax credit
for a joint filing couple or up to $400 for a single
filer for both the 2009 and the 2010 tax year. The
6.2% credit is paid in each paycheck. The credit is
refundable for those whose tax burden is less than
the total tax credit.
The rational
for ARRA job creation is that spending this
entitlement money in the economy will result in job
retention and new job creation. Although models have
been created to estimate the stimulus job creation,
the federal government has not determined a
statistically confident method to calculate and
measure how many jobs the ARRA spending has
affected.
The ARRA entitlement
spending has created a welcomed safety net for
Oregon’s many unemployed and underemployed citizens.
However, for each month that the ARRA entitlements
have been available, more than 10,000 additional
Oregonians have joined the ranks of the 300,000
unemployed Oregon workers. The program has done
little to create the permanent private sector jobs
necessary to drive a meaningful economic recovery.
Private sector job creation requires investment in
the private sector economy. That investment requires
both capital and confidence. Both are sorely lacking
under our current governance.
THE TAXPAYERS’ TICKING
TIME-BOMB
Oregon’s Public
Employee Retirement System (PERS) currently has an
unfunded liability of about $13 billion. Seventy
percent of PERS revenue comes from investment income
while the other 30% comes from employer and employee
cash contributions. The PERS funding formula is
based on the assumption that investment earnings
will average a return of 8%. This assumption is made
by the Oregon Investment Board even though the
historical investment earnings over the past twenty
years have only averaged about 4 ½%.
A March 22nd Wall
Street Journal article by The American Enterprise
Institute’s Andrew Biggs concisely states the
immensity of the future PERS liability. He points
out that $414.60 would need to be invested in twenty
year United States Treasury bonds yielding 4 ½ %
interest to be certain to be able to pay each $1,000
needed for PERS benefits in 2030.
Alternatively, $214.50
could be invested in equities accompanied by “put
options” costing $200.80 that would guarantee that
PERS could sell the equities for no less than $1,000
in 2030. The total investment cost of this
alternative is $415.30.
A third option is to
simply invest $214.50 in equities and hope that the
“market holds” for twenty years at an average 8%
return on investment. Unfortunately, this is the
speculative option that the Oregon Investment Board
has chosen for PERS to invest the public employees’
retirement funds. In the likely event that
investment earnings do not average 8% over the next
twenty years, the Oregon taxpayer will be
responsible for the balance because vested PERS
benefits are constitutionally guaranteed in Oregon
By 2015 the PERS
employer taxpayer contributions will be an
unsustainable 30% to 35% of payroll even in the
event that investment earnings do average eight
percent. Taxpayer contribution will be much more
oppressive than that if investment earnings do not
average the predicted eight percent.
Fiscal conservatives
have been sounding the alarm on this ticking
financial time bomb since PERS reform was last
addressed in 2003. Your progressive democrat
legislative leadership has refused to even address
the impending PERS financial collapse.
Please remember, if we
do not stand up for rural Oregon no one will.
Best regards,
Doug
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