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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Monday, November 03, 2008

DEMOCRACY IN DANGER

I received this email from Mark Kelly from Heritage.org. I hope he does not mind my sharing it with the rest of you. It has some terrific links to lotsa' good info.
“Elections decide not only who leads our country, but as a consequence of that vote, the future public policies that will be implemented by our government,” notes Heritage expert and former Federal Election Commissioner Hans von Spakovsky in a Special Report on election fraud. Heritage believes that the right to vote in a fair and free election is a basic civil right, on which depends all of the other rights of the American people protected by the Bill of Rights. Von Spakovsky’s report outlines four case studies involving stolen identities, stolen votes, non-citizen voting and absentee ballot fraud, and notes: “The best way of determining the proper safeguards to ‘deter and detect’ voter fraud that endangers our demo­cratic process is to examine actual reported cases.” It’s an important and timely study, and I hope you will share it widely.

After the Bailout

As some have compared the current crisis to the Great Depression, the Heritage Foundry blog, asks whether the current crisis could usher in the next “New Deal?” The answer, a careful study of the evidence indicates that the government intervention simply prolonged the Great Depression. And, many of the New Deal’s laws were struck down as unconstitutional.

Yet, now we even have state governments indicating they too would like to be “bailed out.” Governor Mark Sanford of South Carolina disagrees. He is calling out irresponsible state spending and calling for more flexibility in spending federal dollars rather than a bailout. He said,

“Essentially, you’d be transferring taxpayer dollars out of the frying pan – the federal government – and into the fire – the states themselves. I think this stimulus would exacerbate the clearly unsustainable spending trends of states, which has gone up 124 percent over the past 10 years versus federal government spending growth of 83 percent…

…State debt across the country has also increased by 95 percent over the past decade. In fact, on average every American citizen is on the hook for $1,200 more in state debt than we were 10 years ago. There seems to be no consequence, and indeed a reward, for unsustainable spending growth by states. In effect, sending $150 billion more to states would produce another layer of moral hazard – already laid bare at the corporate, individual and federal levels in recent years.”

So how did this current crisis happen?

The Congressional Joint Economic Committee issued this report which finds that government economic and monetary policies worldwide inflated the unsustainable housing bubble. Two problems in the U.S. run counter to the narrative some would like to tell. First, it was new rules for Fannie Mae and Freddie Mac under the Clinton Administration that encouraged these institutions to buy more and more subprime loans. And, it was new regulations that arose out of legislation to address the collapse of Enron that caused financial institutions to underestimate risk when housing prices were increasing and underestimate value when prices started to fall.

Some have blamed deregulation for this financial crisis. In Meltdowns and Myths, Heritage expert James Gattuso discusses how this is a false narrative in an effort for politicians to assign blame. And, this Wall Street Journal piece today points out that this Age of “Spitzer and Sarbox” could hardly be called deregulation.

In light of the partisan accusations flying around Washington, DC and on the campaign trail, Heritage is calling for an Independent Commission to examine at the causes of the crisis. Heritage outlines five key issues that need to be addressed:

1. Regulatory Roles and Failures
2. Role of GSEs (Fannie and Freddie) and Other Government Incentives
3. Congressional Intervention
4. International Coordination
5. Role and Regulation of Derivatives

And, Heritage offers its own roadmap for stimulating our economy. Rather than returning to the failed policies of the past, Heritage calls on Congress to take a comprehensive approach that will unleash free market forces in tax, spending and energy policy. Not only will this bring help in the short run, but it will put our economy on better footing over the long haul.

A Tipping Point on Entitlements?

Heritage’s Center for Data Analysis just released the 2008 Index of Government Dependency. As baby boomers begin to retire, the Index asks whether or not we have reached the point of no return in the number of people who receive government benefits for which they pay no taxes and whether we will be crushed under the weight of these entitlements? (And, you should keep in mind that this report was compiled before this summer’s Congressional spending spree!)

Thanks for all you are doing to advance freedom. We expect the next few years will be challenging on the policy front here in Washington. I would be interested to hear how things are going in your state as you look toward next Tuesday.



Mark Kelly
Strategic Policy Outreach Manager
Coalition Relations
The Heritage Foundation
202-608-6051
www.heritage.org

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