May 2020 Newsletter

This Month…

  • Highly Respected Budget Watchdog Group Issues Warning
  • Economists Offer a Solution to America’s Debt Crisis
  • Shifting the Short-Term Pain to Future Generations
  • Article V Leader Quoted as Resisting Pandemic Mandates
  • National Federalism Task Force is Proposed
  • Roman Buhler Pushing Congress: Propose Amendments
  • Editorialist Speaks Out Against a BBA
  • New ‘Fix the System’ Coalition Established
  • Recommended Reads

Highly Respected Budget Watchdog Group Issues Warning –
On April 13 the Committee for a Responsible Budget issued a projection that Debt Will Exceed the Size of the Economy This Year.  It said, “The United States entered the current public health and economic crisis facing high levels of debt and trillion-dollar deficits.  Due to the effects of the crisis and legislation enacted to combat it, debt and deficits will now grow much higher, to never-before-seen levels both in dollars and as a share of Gross Domestic Product (GDP).”The group’s latest projections find that “under current law, budget deficits will total more than $3.8 trillion (18.7 percent of GDP) this year and $2.1 trillion (9.7 percent of GDP) in 2021.  We project debt held by the public will exceed the size of the economy by the end of Fiscal Year 2020 and eclipse the prior record set after World War II by 2023.”  By way of comparison the group notes that “the previous record for nominal deficits was set in 2009, when borrowing reached $1.4 trillion.  As a share of GDP, deficits never rose above 10 percent during the Great Recession.  The only time deficits have ever exceeded our projection for 2020 of 18.7 percent of GDP was in a three-year span during World War II – reaching a high of 29.6 percent in 1943.”  Read the entire detailed report HERE.Economists Offer a Solution to America’s Debt Crisis –
During April The Heartland Institute issued a new Policy Brief written by economists Dr. Barry Poulson and Dr. John Merrifield.  The 14-page paper is entitled How to Solve America’s Debt Crisis in the Wake of the Coronavirus Pandemic.Poulson and Merrifield say: “Just as the government adjusted to a post-World War II economy, the government must design a phase two fiscal plan for a post-coronavirus pandemic economy.”The summary of the paper states: “As America accumulates more debt, the greatest risk for the nation is economic stagnation. Swiss-style fiscal rules, which would ideally be included in an amendment to the U.S. Constitution, could resolve the United States’ long-term fiscal problems and help spur sustained economic growth. Regardless of whether a constitutional amendment is passed, the federal government should immediately adopt Swiss-style fiscal rules to avert economic disaster.”“This study is a commonsense guide to addressing the national debt,” suggest the authors.  “The debt crisis we are experiencing in the United States has been experienced in virtually every other country in the world over the past half-century.”  The brief paper gives an overview the oft-referenced “Swiss Debt Brake.”  Find the paper HERE.Shifting the Short-Term Pain to Future Generations –
In mid-April, blogger-columnist Bruce Kauffmann wrote: “The $2 trillion coronavirus-stimulus bill will ease the suffering of millions today, and that is a noble goal.  But it will unquestionably add to the nearly $24 trillion national debt that will cause horrific suffering for millions sometime in the future.  Then again, in a Democracy the people invariably choose short-term gain over long-term pain because it is usually others who pay the price for that immediate gain.

“So we say to Congress, ‘If you want to keep your jobs, keep voting for legislation that keeps the goodies coming.’  The result is legislation providing us with government benefits far in excess of the taxes we pay to fund those benefits.  Thus, we are racking up around $1 trillion deficits every year, and the current debt per American citizen is $72,000, while per American taxpayer it is $191,000.

“Then again, since, so far, we the people have shown no interest in addressing this issue, nothing will be done until the fiscal Grim Reaper appears with a “Balance Due” statement that must be paid, and a democracy collapses over loose fiscal policy, followed by a dictatorship.”

His column was accompanied by the following quote that is commonly attributed to Alexander Fraser Tytler (1747 – 1813), an eighteenth-century Scottish lawyer, judge, writer and historian who served as Professor of Universal History, and Greek and Roman Antiquities at the University of Edinburgh:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury.  From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy collapses over loose fiscal policy, followed by a dictatorship.”
  • More Developments on Federal Debt/Federalism Issues –

On Wednesday, April 22, the American Legislative Exchange Council (ALEC) hosted a 45-minute conference call with Vice President Mike Pence.  About 350 folks participated (mostly state legislators, from 43 states).  During the call there were several references to the need for a BBA or some type of federal fiscal restraint measure to be pursued after the current COVID-19 crisis is abated.

After the call, ALEC circulated a proposed letter to President Trump that call participants were invited to sign.  The letter called for reopening the US economy “in a safe manner.”  The letter stressed that “the principles of limited government and fiscal responsibility must be restored.  This includes stopping trillions of dollars of new federal spending, which adds to our national debt – now exceeding $24 trillion.”

The letter, already signed by some 160 state legislators,  also stresses [F]ederalism – the proper balance of power between states and the federal government – must be preserved.”  See the letter HERE.

+++

On April 16 The Washington Times published a commentary by former Wisconsin Governor Scott Walker entitled Confronting the U.S. debt crisis before it’s too late.

Walker underscores the federal spending within the recently acted CARES Act, “And the actions of the Federal Reserve in response to the coronavirus crisis [adding] some $4 trillion” to US debt.  He says, “Add it all up and the numbers don’t lie. The national debt will be more than $30 trillion this year.”  Read his commentary HERE.

+++

On April 22 Associated Press carried a story under the heading Argentina doesn’t make payment, starting default countdown dealing with Argentina’s efforts to extricate itself from billions of dollars of foreign debt.  The efforts were reported as unsuccessful, “starting a 30-day countdown to a possible default unless the government and bondholders can reach a deal on restructuring its massive foreign debt.”  Read the AP report HERE.

That brought to mind a 6-minute video produced in 2015 about America’s need to learn from Argentina’s economic history.  In 1916 Argentina was one of the world’s richest countries with a flourishing economy, at the time comparable to the US.  Between then and the 1970s the government became overly generous with the people’s money and attempted to solve revenue needs by printing more money, like the US is doing today.

Argentine hyperinflation exploded in 1989.  Inflation hit 3,000%, and the country descended into chaos.  By 1994 that country’s pension plans (similar to Social Security in the US) had imploded.  While Argentina’s downfall was based on a different set of circumstances than the US, its gross overspending and inflation-inducing money-printing should be a lesson for America.   See the video HERE.

On April 22 the Board of Trustees for America’s Social Security Fund released its projections (based on current law and without consideration of the COVID-19 pandemic).  The report says: “Trust Funds are projected to become depleted in 2035.”  Read the report HERE.

Article V Leader Quoted as Resisting Pandemic Mandates –
The March 30 edition of The New York Times (before the COVID-19 pandemic hit its peak in the US) carried a story entitled Coronavirus Response Highlights Deepening Partisan Divide.

In the article, Larry Levitt who leads health policy for the Kaiser Family Foundation, was quoted as saying “This epidemic has been a window into our politics.  Particularly over the past couple of weeks, a political divide has emerged.”

The article also quoted Mark Meckler, head of the Convention of States Project, as saying: “They have no right to tell me I need to stay in my house.  They cannot impose a travel ban on me.  They can’t.  It’s unconstitutional.”  

The article reported that Meckler and “other grassroots conservative leaders [are exploring] the possibility of filing lawsuits to block some of the more aggressive social distancing measures.  In the meantime, he’s encouraging like-minded conservatives to embrace ‘peaceful resistance’.”  Meckler was quoted as saying: “I’m not going along with it.  It doesn’t mean we won’t be smart, but we don’t want to be sheep.”  The Times article is no longer posted on line.

National Federalism Task Force is Proposed –
Former Utah State Representative Ken Ivory has been working to get a National Federalism Task Force established.  He points to the current COVID-19 crisis as a major reason for the initiative.  He and other current and former state leaders are working to persuade the big three state legislature organizations to create the Task Force.

Ivory says: “It is times of crisis like this where government power tends to irreversibly centralize, if we do not take concerted action to neutralize and reverse this natural tendency.”

He believes the proposed Task Force could facilitate convening federalism summits to clarify governing roles and responsibilities between the national government and the states in specific areas (police power, education, health care, etc.).

On March 28, the Utah legislature adopted HCR16, a resolution with 46 sponsors calling upon “the National Conference of State Legislatures, the Council of State Governments, and the American Legislative Exchange Council to coordinate in the creation of a National Federalism Task Force for the purpose of convening a series of federalism summits to consider and develop plans for restoring and maintaining clearly discernible divisions in the roles and responsibilities of the national government and the states for the benefit and engagement of the American people.”  Read the full resolution HERE.

Ivory is inviting legislators in other states to sign a letter they can send to the above organizations to encourage them to take the proposal seriously.  For more information, Ivory can be reached HERE.

Roman Buhler Pushing Congress: Propose Amendments –
On Tuesday, March 14, Roman Buhler, National Director of the Madison Coalition, hosted a conference call as a progress report on two specific proposed constitutional amendments that he said his group is promoting, plus a third topic that he stressed as needing to be addressed.

While attendance numbers on such calls are hard to determine, it was clear that a large number of state legislators and constitutional activists participated.  Buhler reported that 25 states were represented on the call.

Buhler was calling for support of his organization’s “Regulation Freedom Amendment.”  It is aimed at giving Congress power to approve or reject proposed “major” regulations issued by Executive Branch agencies.  His second proposal, “Keep 9 Amendment,” is a proposed constitutional amendment that would head-off potential “court-packing” by assuring that no future Congress could alter the composition of the Supreme Court simply by deciding the court should have more justices.

Mr. Buhler also spent time talking about the need for what he referred to as a “Fiscal Discipline Amendment” (similar to a Balanced Budget Amendment), but he offered no specific plan for bringing that to fruition.

For years, many Article V activists have regarded Ramon as a bit of a political gadfly.  He seems to show up at every interstate gathering of state legislators, often collaring attendees at events hosted by various Article V groups, to promote his various proposals.  He has never been a proponent of the convention of states approach to proposing amendments.  Rather, he regularly expresses his belief that needed constitutional amendments can/will be proposed by Congress.

This time Buhler claims his two primary proposals have some level of support/endorsement in 29 state legislative chambers (out of 99).  His strategy is to “empower states to force Congress to propose” the organization’s amendments.  His web site indicates that his Regulation Freedom Amendment proposal has endorsements from numerous political groups and leading politicians.  During the call he announced that FreedomWorks “has endorsed that proposal.”  Learn more about that proposal HERE.

Editorialist Speaks Out Against a BBA –
On March 29 editors of the Northwest Arkansas Democrat Gazette (Little Rock) used the COVID-19 pandemic to argue that a constitutional amendment enforcing federal fiscal discipline would hamstring governmental response.  Its editorial was headlined Unbalanced – An amendment is crazy talk.

The editorial claimed: “Few times in this nation’s history has a better argument been made against a Balanced Budget Amendment. The year 2020 should be taught in constitutional law classes.”

The writer evidenced his/her lack of understanding of the ways a federal fiscal discipline amendment could be written.  Assumptions were made as to the contents of such an amendment that is still to be written and proposed.  It is unfortunate that opinion leaders such as this writer have not become acquainted with how other nations have constitutionally imposed fiscal restraint on their governments… such as the Swiss.  Provisions for dealing with emergencies are typically included, as are methods of enforcement.

The editorialist said: “This COVID-19 crisis is going to teach mankind many lessons as the weeks go on.  Let’s hope it teaches a lot of lessons to our political class, too.  For even though a Balanced Budget Amendment remains a popular idea, that doesn’t mean it’s a good one.”  Read the editorial HERE.

New ‘Fix the System’ Coalition Established –
American Promise and nine other “leading cross-partisan reform organizations” have joined together to create the Fix the System Coalition.   On April 10th, coalition members sent a letter to Congress “calling for action to make voting safe and secure in the face of the pandemic.”

The letter asks for Congress to incorporate funding for their list of voting-related measures by incorporating their recommended provisions “into the phase four stimulus bill to ensure safe, fair, and secure elections that are truly representative of the people’s will.”  The letter can be read HERE.

The new group’s web site says: “The pillars of our political system are shaking and posing a profound threat to our economy, our national security, and our ability to come together as citizens to solve common problems.  That’s why we — a diverse partnership of grassroots groups, business leaders, and national organizations with different political affiliations — are coming together to Fix the System.”  Their web site is HERE.

Recommended Reads –

  • On March 30, The Hill carried a thoughtful 3-page article by Jonathan Williams and Lee Schalk of the American Legislative Exchange Council entitled A free-market approach to reviving the economy amid COVID-19 distress.

The writers posit that “some of the most effective government responses to aid individuals in the economy can revolve around repealing or suspending burdensome taxes and regulations.”  They offer some specific suggestions.  Find the article HERE.

  • On April 2 Mike Kapic published U.S. Constitution: Unknown Origins, a 7-page summarization of information from his 2018 book entitled Conventions that Made America.

Kapic asks the question: [H]as a more intrusive and abusive government usurped our constitutional federal republic?”  His brief history seeks to answer that question while reminding readers of the long history of convention of states/colonies approach to reversing such trends.  Read it HERE.

  • On April 13 Rodney Dodsworth issued a new article entitled A Different Take on Federalism, subtitled The Insidious 17th Amendment. Find Part 1 HERE, and Part 2 HERE.
  • Humility of the Founders is a brief essay published on March 25 by The Heartland Institute, written by Frank Keeney, founder of The Act 2 Reforms, wherein he explains how inserting Article V into the constitution was “an act of humility.”  Read it HERE.

Important to Consider –

“The crisis effort, however vast and necessary,
must not crowd out the urgent task
of launching a parallel enterprise
for the transition to the post-coronavirus order.”

 

Former Secretary of State Henry A. Kissinger
Op-Ed in the April 4, 2020 Wall Street Journal

 

sssss