E-Newsletter No. 3
March 2014
If not us, who?_____If not now, when?

Last month, we talked about President Obama’s State of the Union speech and the lack of any plan to address the country’s growing debt problem. We also reported on the legislation that was passed by the US House of Representatives and US Senate to suspend any limitation on the amount of US debt until March 2015.

In this month’s newsletter, we would like to address the president’s proposal to increase the federal minimum wage from $7.25 per hour to $10.10 per hour. As discussed elsewhere on our website, our Foundation promotes the concept of personal responsibility, rather than another government program. In addition, our Editorial Board hold(s) the following truths to be self-evident –
– Poverty sucks – – it is estimated that approximately 46 million citizens (roughly 15% of the population) live in poverty
– The current poverty level for an individual (as published by the US Government) is $11,490
– The current poverty level published by the US government for a family of four is $23,550
– For 2,080 hours of work (no overtime or vacation time) $7.25 per hour is $15,080
– For 2,080 hours of work (no overtime or vacation time) $10.10 per hour is $21,008
– From a purely monetary perspective, a “minimal wage” job (however defined) sucks
– From any perspective, wanting to have a job, but not having a job, really sucks
– In a [primarily] free-market, capitalistic economy, prices are affected by supply and demand
– In a free-market economy, economic decisions are made after consideration of costs and benefits
– The US participates in the global economy, and the level of globalization is increasing each year

Our Editorial Board believes that an individual’s personal economic well-being is a personal responsibility. But for every belief, there can be an alternative contrarian belief. As we noted on our website, Mitt Romney once made the following observation – There are… people who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That’s an entitlement. The government should give it to them.

However, as we noted in that Conversation Piece, our Editorial Board does not believe that the number of people who feel they are a victim totals 47%. But the proponents of the two opposing viewpoints (Personal Responsibility versus a Government Program) have (and hold on to) their own personal beliefs. Our Editorial Board believes that a proposal to increase the minimum wage issue is a very effective “sound bite”- – it speaks to each of us as a caring person and our tendency to want to “do something”. However, as we have noted elsewhere, we believe that there are way too many examples of government programs that “sounded good”, but then we subsequently find out that all of the implications were not thought through very well, and we find ourselves in a situation where we have “unintended consequences”, and the president’s proposal is one more example.

Our Editorial Board believes that increasing the minimum wage is counter-productive in solving poverty problems. There are two basic, fundamental (and generally accepted) economic realities (supply and demand, along with “cost versus benefit” decision making) that virtually guarantee that increasing the minimum wage will serve to eliminate a certain number of jobs. It should be noted that different studies project different numbers of jobs lost, but none of the studies show that increasing the minimum wage will serve to increase the number of jobs.

This is how decision making happens in the (real) business world – – Faced with a new higher mandated cost, businesses will analyze the economics and the alternatives, and if appropriate, may choose to shift these extra costs into equipment in lieu of minimum wage job(s). The demand for workers will decrease due to higher mandated wage costs, but the supply of available potential employees will remain the same (or probably increase). New higher mandated costs will either be passed on to the market place (which increases inflation) or (if the business is not able to pass on these higher costs in the marketplace) the higher wage costs will negatively impact the business’ profitability, and therefore the business’ ability to continue to stay in business (and provide jobs).

Minimum wage jobs are merely the first rung on a person’s economic ladder. These types of jobs were never intended to be the kind of job that a person should strive for, in order to support a family of four. These jobs are typically filled by high school kids, or by people who are trying to get into the workforce for the first time to establish their skills credentials, or by senior citizens who want to continue to work for personal reasons and who would prefer to get some level of pay rather than perform volunteer work, etc., etc. A minimum wage job has minimal skill requirements – – the primary ones being the ability and the consistency to show up for work each day, take direction from management, be pleasant to work with, and to competently fulfill that job’s duties and responsibilities. Unfortunately, developing and maintaining these minimal skills can be a challenge for some individuals, and this is where the public education system and/or social services agencies (and Not for Profit Organizations) need the public’s support, so that these organizations can become more effective in fulfilling their role(s) to help eliminate poverty. This support can include joining your local PTA, running for the local school board, or providing monetary support to these organizations, etc. In order to achieve a higher level of pay, higher paying jobs require higher levels of skills (i.e., higher level math and language skills and/or specialized skills). Our Foundation believes that it is the individual’s personal responsibility to acquire those skills, so that they can find the type of job (or career) that they would like to have, to fulfill their own personal dreams and aspirations. It should be noted that sometimes those dreams and aspirations evolve into a desire to own your own business that would employ your fellow citizens.

The “political sound bite” regarding the minimum wage needs to be re-focused away from the purely “emotional argument” (poverty sucks, so “we the public” are obligated to try and do something) and the conversation needs to be re-directed towards the role of personal responsibility, along with society working on finding effective solutions to the issue of poverty in America.

In closing, our Editorial Board would like to mention that we also hold the following truth to be self-evident – – in a free-market, capitalistic economy “income inequality” is merely a fact of life. History has shown that even Communism was unsuccessful in eliminating income inequality (or poverty). Next month we will talk about the president’s proposal for the government to solve this “problem”.

US Debt Clock – – February 1st – $54,544 per citizen / March 1st – $54,729
We can get this fixed…..

3/10/14 Addendum – Please be sure to read the Comment from a California Member

E-Newsletter No. 2
February 2014

If not us, who?
If not now, when?

As many of you are aware, President Obama delivered his State of the Union speech on Tuesday night, January 28th. Our Editorial Board was extremely pleased when, six minutes into his speech, the president acknowledged that what unites the people of this nation, regardless of race, or region, or party, young or old, rich or poor, is the simple, profound belief in opportunity for all; the notion that if you work hard, and take responsibility, you can get ahead in America. As we all know, this is the basic premise of our Foundation to Promote Personal Responsibility.

However, we were extremely disappointed that the president did not put forward any plan to fix the country’s growing debt problem. Instead, the “sound bite” that he included in his speech was – Our deficits – cut by more than half. However, as we know, that statement simply means that the US government’s debt is not being repaid, but instead continues to grow (more on that later).

Our Editorial Board recognizes that it will take a long time (many years) for our country to repay its debt, and we acknowledge that cutting the deficit is preferable to having the amount of the annual deficit grow each year. However, the US government is not accomplishing what it needs to do – – cut spending and generate the necessary surpluses to begin repaying the debt. Much of the remainder of the president’s speech was devoted to discussing additional programs that the federal government should initiate (without any mention of how those programs would be funded).

In our monthly newsletter, we intend to keep you informed about the amount of the incurred “on-book” debt per US citizen (i.e., the amount of “on-book” debt, which does not even include the present value of the future payments that have been promised for Social Security and Medicare). According to the US Debt clock, this amount of debt per citizen increased from $54,426 as of January 1st to $54,544 as of February 1st.

As many of you are aware, once the federal government was “re-opened” last October, the next key date became February 7th, when the country’s debt ceiling needed to be addressed. We are extremely disappointed to report that during the week of February 10th, the US House of Representatives and the US Senate passed legislation to suspend any limitations on the US debt until March 2015. This legislation was signed into law by President Obama on Saturday, February 15th. In effect, our elected officials have written themselves a blank check on your (and, if applicable, your children’s) bank account for the next thirteen months.

We would also like to mention that on February 4th the nonpartisan Congressional Budget Office released its annual budget and economic outlook. We are providing the following link to an in-depth analysis prepared by the Committee for a Responsible Federal Budget –

http://crfb.org/sites/default/files/report_analysis_of_cbos_2014_budget_and_economic_outlook.pdf

The main messages are –
– Although the country’s deficit levels will decrease this year and next, the annual deficit will begin growing again within two years.
– Almost nothing has been done to finance or slow the growth of “entitlement programs”, which are the main drivers of our long-term debt.
– Unless changes are made, both spending and taxes will remain above historical average for the next decade, and will continue to grow over time, and annual deficits in excess of one trillion dollars will return early next decade.
– Interest payments on the country’s debt will quadruple in nominal terms between 2013 and 2024.
– By 2020, interest payments on the cumulative US debt will exceed the level of all non-defense discretionary spending.

The Congressional Budget Office’s projections are further evidence that the country’s annual deficit and cumulative debt problems are far from resolved. The Campaign to Fix the Debt, the Congressional Budget Office, the Committee for a Responsible Federal Budget, and our Foundation all join together, to encourage our elected leaders to work toward reducing the amount of federal expenditures, and ultimately reduce the amount of our country’s debt. Please refer to our Conversation Piece entitled What the US Government Should (and Should Not) Do, and our recommendations for spending reductions, to restructure the size of the US government.

In closing, we want to highlight (and applaud) the final comments President Obama made in his State of the Union speech – Our freedom, our democracy, has never been easy…. But for more than two hundred years, we have… expand(ed) the possibility of individual achievement….so that the words set to paper by our Founders are made real for every citizen. The America we want for our kids – a rising America where honest work is plentiful and communities are strong, where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy. But…I know it’s within our reach. Believe it.

We share the president’s sentiments. Keep the faith. We can get this fixed…..

E-Newsletter No. 1
January 2014

Welcome to our inaugural e-newsletter.
We hope you had a happy holiday season.

Our Editorial Board is pleased to report the successful launch of our website last month, along with the sign up of our initial Members. We believe that we have a very solid Foundation with our initial Members, who share our concerns about the growth of the US government, and our country’s annual deficit and cumulative debt. Our Foundation’s Members are committed to Joining the Conversation, forwarding our website’s link (F2PPR.org) to their families, friends and neighbors, and offering up new thoughts and recommendations on how We The People can affect the political process, to help solve some of our country’s most vexing problems.

As you are probably aware, last month the US House of Representatives and US Senate passed legislation regarding the federal budget for the fiscal year that began last October 1st. You may have read the following encouraging “sound bites” for this accomplishment –

For the first time in what seems like ages, Congress has passed a government spending plan without resorting to last-minute brinkmanship such as midnight negotiations to prevent an imminent government shutdown.

The legislation increases the spending cap to $1.012 trillion for fiscal 2014, and reduces the deficit by about $23 billion over 10 years.

The important fact that is missing from the above snippets is that last month’s legislation only dealt with the discretionary portion of federal spending. It should also be noted that the amounts in the legislation exceed the spending caps for fiscal 2014 that had previously been approved by Congress.

Total federal spending for fiscal 2014 in the President’s proposed budget (which includes both mandatory and discretionary amounts) is $3.778 trillion. The projected deficit in the President’s budget for fiscal 2014 is $744 billion. While this amount is down somewhat from the latest estimate of the deficit for 2013, a $744 billion deficit for 2014 represents an additional $2,300 increase in the amount of debt per citizen – for every man, woman and child in the country.

On our website, we have included a link to the US Debt Clock. On January 1, 2014, the federal government’s “on book” debt (i.e., excluding the net present value of future payments for Social Security, Medicare and other promised benefits) was $17.27 trillion, which equates to $54,426 for each US citizen. The main stream media has an obligation to report this cumulative amount per citizen, along with the additional increase that is now incorporated into the federal government’s budget for fiscal 2014. Lastly, to put the above “accomplishment” into perspective, $23 billion over 10 years represents an average of $2.3 billion per year, which equates to $7.25 per citizen per year.

Our elected representatives’ next big hurdle will be the decisions that need to be made in regards to the country’s debt ceiling. The October deal that re-opened the federal government after a 16-day shut down suspended the country’s debt limit until February 7th. We will give you an update on this issue in next month’s e-newsletter.

In the meantime, our Editorial Board would like to share with you the following link to a concise overview of our country’s annual deficit and debt problems. It is a 13 minute video prepared by David M. Walker, the former Comptroller General of the US Government. If nothing else, please be sure to watch the last two minutes of this video. (The good news is – – at least we’re better than Greece)….

We would like to close our inaugural newsletter with our Foundation’s motto:
If not us, who?
If not now, when?

Keep the faith. We can get this fixed…..