Wednesday, November 30, 2011

Understanding Newt Gingrich’s 21st Century Contract with America (pt 3)

For the last few days we’ve been discussing Newt Gingrich’s 21st Century Contract with America.  Today we’re continuing our discussion of Speaker Gingrich’s plan.

Reforming the Unemployment Compensation System

The best way to repair our broken unemployment compensation system is to make the problem of perennially high unemployment obsolete through robust economic growth. But in the meantime, 25 million Americans are unemployed or underemployed. They depend on a system that is costly but does not actually help them get a job. It is a system in dire need of reform. Ninety-nine weeks is too long for any American to be dependent on the government.

Agreed.  The fact that people are able to stay on unemployment for nearly two years is a major problem.  First of all, our system is not setup to fund unemployment for that long. Secondly, many people simply do not look for work while they have government checks coming.  I will never forget a moment when I was briefly unemployed in 2009 where I attended a required seminar on tools available for unemployed people and hearing one of the other people in the seminar saying, loudly to anyone who could hear, "I'm just here so I can get some free money for a while."  I wanted to deck that guy, I really did. 

It is fundamentally wrong to give people money for 99 weeks for doing nothing. That's why we undertook and passed welfare reform when I was Speaker. It is also why I will introduce a training requirement for extended federal unemployment benefits. We can better help these Americans by requiring them to participate in real training programs in private companies, in exchange for temporary unemployment aid.

Our goal is to convert the time and money now lost to a maintenance unemployment program into a human capital investment program that increases the competitiveness of the American worker in the world market in a time of dramatic scientific and technological change.

Translation: Let's make unemployment something that is temporary, while you search for work, and not a lifestyle as it's become for so many people. When 99 weeks is available, it becomes a lifestyle.  Period.

This program should be delegated to the 50 states so each can experiment with the best way to use unemployment compensation as a job training program.

Agreed.  The states are the laboratories of innovation.  A one size fits all solution rarely works, but giving 50 states the chance to create their own system will lead to finding far better solutions because, at least at first, there will be 50 of them.  The best ideas will be adopted by the other states. 

Unleash America’s full energy production potential in oil, natural gas, coal, biofuels, wind, nuclear oil shale and more, creating jobs, stimulating a sustainable manufacturing boom, lowering gasoline and other energy prices, increasing government revenues, strengthening the dollar, and bolstering
national security.

The United States has more energy resources than any other country in the world – more than Russia, Saudi Arabia, Canada, or Brazil. Expanding the development of these resources could create up to 1.1 million new jobs and deliver $127 billion in new government revenues by 2020, according to a recent Wood Mackenzie study. With the right regulatory policies, the United States could be the largest oil producer in the world by 2017.

Yet we pay nearly $4 per gallon for gasoline and continue to import nearly half of our oil from foreign countries, many of which have governments hostile to the United States. Meanwhile, millions of Americans in energy-rich regions of the country remain unemployed.

It is time to harness the immense natural energy resources our country has, get Americans back to work, and lower gas, diesel, and other energy prices for every American.

Absolutely right.  We have more than enough supply available if we'll just go get it.  Right now, the liberal mentality is, although we have cupboards and refrigerators full of food and we're hungry, we shouldn't go get it and prepare it, we should go buy more food elsewhere that costs more than simply using what we have.  Based on supply and demand, gas prices shouldn't be $4 a gallon (or $3.50 now...the contract was written a few months ago) it should be under $2. Unfortunately government regulations are keeping supply low artificially. 

It's also hurting the economy.  Canada, our friendly neighbor to the north, got out of their recession back in 2009 by drilling for oil.  They harnessed their vast natural resources and created jobs and turned their economy around.  Yet here in America we're dreaming about "Green Jobs" that are a waste of time and money. 

We have the energy, we should go get it.  Plain and simple.  Real energy, you know the sort that works.  Not these “green energies” that just don’t work. Oil, natural gas, coal, nuclear, these solutions work. 

Save Medicare and Social Security by giving Americans more choices and tools to live longer, healthier lives with greater financial independence.


First, stop paying the crooks. An estimated $70 to $120 billion a year is paid to crooks by Medicare and Medicaid. This is the best place to save money at no cost to honest people. My proposed legislation will offer seniors new choices in Medicare, as well. It will give them the option to choose, on a voluntary basis, either to remain on the existing program, or to transition to a more personalized system in the private sector with greater options for better care. If they select the personalized system, beneficiaries would receive support to cover their private sector premiums. Giving all seniors the option to choose their insurance provider will improve price competition and help lower costs for the program.

Waste and fraud is the obvious part.  But also releasing private sector, free market solutions is also a great idea. There are only a  handful of things government can do better than the private sector (and most of them fall under a banner that rhymes with "Befense" or "Bilitary.")  Voucher systems will open up competition instead of just giving the care to one or two organizations approved by Medicare. 
Social Security

Americans work their entire lives to pay for their hard-earned retirement benefits, and as Americans now enjoy longer and healthier lives than ever, these benefits must be protected and made even stronger.

I reject the idea that we can solve our budget and debt crisis by some combination of cutting benefits and raising taxes within the current framework of these two programs. Instead, we need to think outside the box with fundamental, structural reforms that would transform and modernize these two programs, changing how they work to achieve their goals. Any American who wants to enter or remain in the existing Medicare and Social Security programs will be able to do so, but we will also introduce optional alternatives that give Americans more control over their health and retirement.

Agreed.  Liberals say we have to raise taxes, pretending as always the problem is revenue, and while I'm inclined to agree we have to adjust the system, I don't know if cutting benefits is the solution either.  We need to explore third options.

As president, I will act to strengthen Social Security. My administration will never hold Social Security payments hostage as a bargaining chip against political opponents, as President Obama did in the summer of 2011.

As more Americans live longer and healthier lives, strengthening Social Security also means creating new options for younger Americans. We must therefore consider a voluntary option for younger Americans to put a portion of their Social Security contributions into personal Social Security savings accounts. Other countries, such as Chile, have found that this model creates vast savings while giving beneficiaries more control over when and how they plan to retire. There are many exciting solutions that will both strengthen Social Security and Medicare while tapping the private sector to save costs, and I look forward to discussing these with Americans over the next year.

I've said many times that I don't expect to ever see a penny of my Social Security that I've been paying in since I was a teenager.  By replacing it with an individual retirement account, I would trust that I do have a retirement plan waiting for me.

Balance the federal budget by freeing job-creators to grow the economy, reforming entitlements, and implementing productivity improvement systems, such as Lean Six Sigma, to eliminate waste and fraud. Pass a balanced budget amendment to keep it balanced.

Getting to a balanced budget is absolutely vital. When there is a permanent budget deficit there is no reason for any politician to say no to any interest group. That is, in fact, how we ended up with the current, absurdly bloated, undisciplined federal government. If deficits do not matter and spending is open-ended, the most rational strategy for every bureaucracy is simply to ask for more money.

If, however, there is a commitment to balancing the budget, then each agency has to find better ways to do things and more innovative ways to get things done. If you want innovation, better outcomes at lower costs, greater productivity, and a spirit of entrepreneurial public management, the balanced budget creates much more pressure for real innovation.

Over time, the requirement to balance the budget leads to smaller government. Politicians who have to face the voters because they are raising taxes have a much harder sell to make than politicians who can bring home "free" goodies with only some distant deficit to explain.

You mean only spend the money you actually have?  Not 50% more?  That’s crazy!  Crazy like a fox, I mean.  Look, I live on a balanced budget.  Yes, I have a couple reasonable loans which I am paying down, specifically my college loan and my car.  Both have set timetables for repair, and both are budgeted for repayment directly.  I am not borrowing 50% of my income because I cannot afford to repay it.  My total loans are at 14% of my income, and I have the ability to pay 100% of them off as they are due.  I am also not choosing to irresponsibly continue to accrue 50% of my income each year. Many economists expect us to have our debt payments to surpass our tax receipts.  (For those of you from Palm Beach County, FL that means the amount of money we have would be exceeded by the debt payments.)  That’s a problem.  We can either fix it now or be royally screwed in a few years.  These are our options. 

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