Give Liberty a Chance!

God has given to men all that is necessary for them to accomplish their destinies…

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgement of faith in God and His works.

- Frederic Bastiat, The Law, 1850

Friday, January 30, 2009

Here We Go Again

This past week Governor Jay Nixon delivered the annual State of the State address to the Missouri General Assembly, the Missouri Supreme Court, Missouri Cabinet heads, and to the people of our great state.

This annual address has become the vehicle for a governor to outline his vision for Missouri and present the executive branch’s budget recommendations for the next fiscal year. It is also the event that adds definition to the agenda boundaries of each body in the legislature and the governor’s office for the current session of the General Assembly.

Last week the consensus revenue estimate (CRE) was staked out at 1% or approximately $7.7 billion. The CRE is the amount of growth in general revenue that the state expects to collect in the next fiscal year. Once that number is determined, the House and Senate use that number as the ceiling throughout the appropriations process.

Unlike Congress, we must have a balanced budget. The state of Missouri can’t print money to satisfy unrestrained and politically motivated spending habits. To have a balanced budget, the General Assembly and the governor’s office must build a state budget at or, preferably, below that target.

Governor Nixon’s budget proposal would spend $8.8 billion of general revenue, a number that exceeds the agreed upon CRE by $1.1 billion, or 14% - this is not a balanced budget proposal. The governor would pay for these excessive increases with federal “stimulus” money, which I contend is federal “dependence” money, that Missouri is expected to receive which is about $809 million dollars.

After four years of fiscal discipline, a budget is now being proposed that relies on significant one-time monies that may or may not materialize. Our budget difficulties earlier this decade stemmed from uncontrolled spending that relied on one-time monies. This can’t be done, but politicians are often afraid of making the difficult decisions that require discipline, because they fear unpopularity. The disciplined decisions of the past four years have put Missouri in better financial position to weather this economic downturn than most states.

The Missouri House has pounded its first stake in the ground. We will not balance our state budget on monies that may or may not come in the mail - we refuse to rely on a federal welfare check to meet the needs of our state. It may be considered good politics by some, but it is lousy fiscal policy. We can’t allow the federal “stimulus” to lead us down the path to ever more federal dependency.

How out of touch with our existing economic situation can we be to accept a budget that requires a 14% increase in economic growth knowing that we average 3.5% growth in Missouri in typical years?

This is a time for restraint, a time to prioritize, and a time to drive efficiencies into the state bureaucracy. It is a time to shed the hindrances that hold back innovation and invention, a time to empower Missourians to build dreams, not sustain them where they are.

This is a time when doing what is right is far more important that doing what is popular, because what is right is not always popular and what is popular is not always right.

Wednesday, January 21, 2009

Lessons Learned - Or Not?

“History in par, repeats itself”. I’m sure Mr. Kuhlman would be pleased to know that I was listening and learning in his World History class in high school. It is to our detriment that Congress and the old and new administrations have not learned the same.

In 1939, the Secretary of the Treasury under President Franklin D. Roosevelt, Henry Morgenthau, acknowledged after 10 years of economic depression and slightly fewer than that of the New Deal, “We have tried spending money. We are spending more than we have ever spent before and it does not work… After eight years of this Administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!”

The numbers are enormous, so large that it is difficult comprehend their magnitude. An additional federal stimulus package that could top $1,000,000,000,000 – that’s a trillion – is now under consideration in Washington. The predominant thought is that government can spend us out of recession, but at what cost?

The Great Depression years, which were also the years of the New Deal, where not times of plenty. Unemployment remained stubbornly high ranging from 15% to 25%. Prices and wages were falling, not growing. The response was more government programs which crowded out private enterprise and elongated the pain.

The New Deal resulted in more government, higher taxes, and less Liberty. It hurt businesses, especially small businesses, stifled innovation, drove competition from the marketplace, dictated how to buy and sell chickens, and wreaked havoc with our monetary policy with global consequences.

History in par, repeats itself and today America looks at the black and white images of the Great Depression/New Deal Era and I have to ask – Why would we want to go back?

The New Deal Era saw the top marginal tax rates go from 25% to 79% with corporate income taxes increasing from 12% to 24% (today they are 35% - the highest in the world). There were also excess profits taxes – sound familiar? – and undistributed profits taxes, taxes on dividends and new payroll taxes, aka, Social Security.

The New Deal simply reallocated money from the private sector to the public sector. The New Deal sought to create “work”, instead of family supporting jobs that create “wealth”. It effectively took resources from one part of our economy to redistribute them to another leading to a planned economy – an economy where oligarchs rule and the citizenry suffers. America is a land of opportunity, not a land of subsistence.

As it stands today, the federal stimulus package has about $550 billion in new spending and $275 billion in tax relief. This spending includes $79 billion to bailout states that made bad decisions (Missouri was not one of them), $87 billion to states to pay for Medicaid – a program they can’t afford anyway, only $30 billion for highway infrastructure, and billions more for a cadre of government expansions.

We know what works. Broad based permanent tax relief works. Money should stay with the people who earn it. It inspires them to innovate further, take more business risks, creates more jobs which, in turn, creates more wealth.

Doesn’t the Preamble of our U.S. Constitution begin “We the People” and sets out to define why we “ordain”-ed and “establish”-ed the Constitution stating among those reasons that it was to “…secure the blessings of liberty to ourselves and our posterity”? Or has Washington relegated you and me to become Sumner’s “Forgotten Man”?

Shouldn’t Congress, the Federal Reserve, and the Executive branch seek solutions to empower individual liberty, instead of dictating individual actions? Shouldn’t they leverage American’s ingenuity and rugged individualism to help solve our problems, instead of harnessing our insecurity to fundamentally alter each American’s relationship with the State?

As we move forward in 2009, we must be mindful that 1939 was not a pinnacle of successes for government “solutions”. No government program can replace, or replicate, the American will to succeed. Government does not innovate, people do, government does not create jobs, people do, unshackle them from repressive tax policies and burdensome regulations and we will succeed.

The resiliency of the U.S. Constitution and the American people who are hard working, honest, and devoted to their families and communities will ultimately bring us out of these economic times in spite of what takes place in Washington, DC. Where Washington has faith in itself, I have faith in the American people, in other words, the Forgotten Man lest we forget that, “…he works, he votes, generally he prays – but he always pays…”

Sunday, January 18, 2009

Rep. Doug Ervin Selected to Chair House Small Business Committee

JEFFERSON CITY – House Speaker Ron Richard, R-Joplin, today selected Rep. Doug Ervin, R-Kearney, to serve as chair of the House Small Business Committee for the 95th General Assembly. Rep. Ervin also served as chair of the committee for the 93rd and 94th General Assemblies.

“Rep. Ervin has done an outstanding job in leading this committee during the course of the last four years. He is the only choice to continue to serve as chair and I have every confidence in his abilities,” said Speaker Richard. “Our small businesses are the lifeblood of Missouri’s economy and we must do everything we can to ensure they are given every opportunity to grow and thrive. I know Doug will be a strong voice for Missouri small businesses as his committee addresses the issues they face.

The House Small Business Committee considers and reports upon bills and matters referred to it relating to the establishment, growth, development, expansion, retention and operations of small businesses in the State. As chair of the committee, Rep. Ervin will preside over committee hearings and be responsible for all legislation referred to the committee.

“It’s an honor to be able to continue my service as chair of this committee and I thank Speaker Richard for the opportunity,” said Rep. Ervin. “During this current economic downturn, it is vital that we find ways to promote job creation and provide opportunities for our small businesses to grow and expand. I look forward to working with the members of my committee to address the issues faced by our small business owners as we work to revitalize our economy.”

In addition to his chairmanship responsibilities, Rep. Ervin was selected as the Vice-Chair of the Special Committee on Children and families. He was also appointed to the Healthcare Transformation Committee and Ways and Means.

The Healthcare Transformation committee is tasked with covering such issues as consumerism in health care, transparency, health banking, the role of information technology in health care, patient safety, and examining the cost drivers in health care.

The Ways and Means committee is a new assignment and one that I am particularly looking forward to. This committee considers bills and all matters relating to taxes, tax credits, revenue and public debt, and the administration of the taxation and revenue laws.

Wednesday, January 7, 2009

Opening Day

Today, the First Session of the 95th General Assembly was convened and I am looking forward to tackling the challenges before us on your behalf. It is also with great regret that I inform you that yesterday, January 6th, the U.S. Congress also convened to work tirelessly on their behalf.

At the beginning of each new General Assembly which occurs every two years, the first order of business after the legislators are sworn in is the election of a new Speaker of the House. I am very pleased to have supported and voted for Rep. Ron Richard from Joplin to this important post. He takes this position at a challenging time in Missouri and our Nation.

While Congress has frittered away opportunity after opportunity and readies our descendants for untold trillions of dollars in debt to a seemingly endless line of special interests representing about every industry our Nation has to offer, Speaker Richard outlined a new vision.

Instead of rewarding the poor decisions of individual business leaders and lining the pockets of favored industries under the guise of “the greater good”, the Republican majority in the Missouri House recognizes that the bedrock of the economy, the bedrock of every community, is you and your family. So, today Speaker Richard outlined a four point plan known as the Family Recovery Plan.

The Family Recovery Plan starts with continued efforts to make Missouri a job-friendly state. We recognize that the oldest social program known to man is a family supporting job. This plan calls for a modest tax cut that will keep more of your hard-earned dollars in your pocket where they belong. The plan pursues free-market solutions to promote ownership, better access, affordability, and privacy in health care while making it more transparent and ensuring that it is free of the waste, fraud, and abuse that has plagued it in the past. Finally, this plan will explore ways to promote the development of our alternative energy sources such as clean coal, wind farms, hydroelectric, and nuclear power.

The Family Recovery Plan is essential to provide Missourians with the assistance they need during these tough economic times. The plan, along with sound budget planning, will be the cornerstone on which our legislative successes will be built. It is time for government to quit trying to pick winners and losers. Where our federal government has failed to act, the Missouri House will remain committed to seeking solutions to the problems faced by Missourians from all walks of life.