It doesn’t take a genius to see the problem with spending your way out of a debt crisis (the geniuses, in fact, seem to be blind on this one). The idea that an ever-increasing level of spending can make a nation more prosperous (and keep it that way) is clearly ridiculous.

In an article posted today on CNN Money.com, entitled “Is the Fed out of bullets?”, the following quote appears:

"Whenever the next recession comes, it is very important that policymakers have had the opportunity to reload their gun to fight the downturn," said Lakshman Achuthan, managing director of Economic Cycle Research Institute. "Today it's not clear that there's a lot more policymakers can do."

What is he saying? The Sheriff is out of ammo. This is hardly surprising, but it is very bad news. With our national debt so high that even Alan Greenspan thinks we’ve hit our limit, the futility of our national policy becomes evident to everyone. Everyone except the career politicians in Washington, that is. With each administration vying to outspend its predecessor, it’s hard to tell one party from another (though one offers us unaffordable foreign wars while the other concocts unsustainable social programs).

Of those who still think we can spend our way out of our mess, some have cited Japan as an example of such a policy in action. It’s too bad for them that in Japan they have come to the conclusion it isn’t working.

Ever since the early 1990’s, when Japan’s “miracle” economy stalled, unemployment started to grow and stagnation became the order of the day, Japan has been furiously borrowing money to spend, in an effort to return to their glory days. Unfortunately, no amount of money can make a super power, economic or otherwise, out of a has-been. The money has been spent (on social programs mostly) and now Japan has a national debt equal to twice their gross domestic product. There really isn’t a way out for them other than repudiation of the debt and severe trimming of their social programs.

Japan is in a place we do not want to be. Where Japan is, however, is where we are clearly headed, and only a few short years lie between us and that destination. For us, though, the problem will be much worse due to mostly foreign holding of our debt (about 95% of Japan’s debt is domestically held). When the cost of our borrowing rises (it will) and holders of our debt become concerned with our credit-worthiness (they already have), and the costs of our programs spiral out of sight (they did that a while back), we will have the perfect storm.
“The foolish man … built his house upon the sand; and the rain fell, and the flood came and the wind blew, and beat against that house, and great was the fall of it.”

I’ve been out around the neighborhood a lot recently, knocking on doors and getting to know people. It seems that everyone I meet wants a change in Washington. And it’s not hard to see why. Many more people are loosing their homes to foreclosure, unemployment is still hovering around 10% and government deficit spending, a major contributor to the problem, continues at a record pace.

We stand on the very edge of a major economic melt-down, similar to what is already happening in Europe, where high expectations on the part of the people as to what their countries should do for them and low expectations on the part of the same people as to what they should be doing for their countries, have made a huge mess of things.

We’re heading for the same place for the same reasons. The poor don’t want to work, the working people want to live like kings, and the wealthy want no-risk gambling for themselves. Did I cover everyone? This is a crisis of expectations more than anything else. We talk about how rich America is without realizing that all wealth is finite and perishable. Wealth is created, renewed and sustained by work, and a population unwilling to work reduces the wealth of nation. For America to continue to lead the world in Freedom and Justice, we must lead the world in work.

 So what would I work towards if I were Representative for Missouri’s 3rd Congressional district? Balancing the budget is a must. How? Let’s start trimming the Federal budget:

-       Cut all non-military salaries by 10%,

-       Switch from pensions to retirement accounts funded by deductions from salary

-       Raise the retirement age for those with pensions to 65

-       Trim each department’s budget by 20%

-       Withdraw the majority of our troops from Iraq and Afghanistan. 

-       Raise Social Security early retirement to 67 & eliminate cap on contributions

-       Eliminate the earned income credit

-       End franking privileges for congressmen

-       Suspend implementation of new health care law for 10 years

Then let’s increase revenue:

-       Institute temporary federal sales tax on electronics, alcohol and all interstate sales (dedicate receipts to debt reduction)

-       Help cover homeland security costs with temporary fee on incoming visitors

At the same time, let’s take some concrete steps to create more employment.

-       Dialogue with industry leaders to build American manufacturing

-       Encourage cottage industry and individual initiative; ease self-employment rules

-       Give incentives to small business to hire and retain employees

 All of the above ideas are necessary and important to building a stronger, better America and the sooner we get started, the better. You can help. Please contact me at 314-504-6692

 or campaign2010@edwardcrim.com 

or 

Citizens to Elect Edward Crim 

7019 Mitchell Avenue

St. Louis, Missouri 63117

I have only two objections to the new health care law, so recently pushed through Congress by President Obama; the means and the end.

My objection to the means: it was an example of government secrecy unparalleled in any issue of public importance over the last 30 years. It would make the back room deal-makers of the last century proud to see their legislative descendants cutting deals, lying, obfuscating and selling their souls to the highest bidder. If this is an example of the transparency and accountability promised us by our current leaders, then it’s time for new leaders.

My objection to the end: we have dramatically expanded in our country the entitlement mindset that is currently bankrupting Europe and has already put us on the verge of economic disaster. At a time when our established social programs are foundering due to unrealistic expectations and a rapidly changing demographic, we simply cannot afford such a massive new expense. Although Congress has cheerfully declared that the new bill will actually put money into the treasury, rather than take it out, I confidently predict the opposite. In this area, as in other areas of critical importance (Social Security, Defense, Medicare, environmental regulation, energy policy and financial regulation and reform), Congress has demonstrated itself to be part of the problem rather than part of the solution.

The new plan, with all its penny-pinching measures, will not improve health care in America, will result in rationing, will not improve access to health care (access is currently not much of an issue – the issue is the cost), and will not particularly help the poorest of Americans, who already get free health care through hospital emergency rooms.

What will happen, though, is that insurance premiums will continue to rise for the middle class. We, the working, productive people of the nation, will carry on our backs the cost of those who cannot or will not pay their own way. And I can tell you right now, that’s gonna hurt.

So here’s the prediction: higher costs, fewer jobs, more restricted access and a huge new government debt. Do you want to bring responsible government back to America? I need your help.

It’s been a busy few weeks for your favorite Democrat (that’s me, I hope). I had an art show open (my art project for last year - Forest Park 365 – a year in America’s most diverse urban park) on the 30th at Norton’s Fine Art & Framing (2025 S. Big Bend Blvd, 63117). I had over 365 photographs to select, crop, label, print and mount, all while doing radio and television interviews and speaking to local Democratic organizations. As you can imagine, this took some time. The work for the show is completed (the photos are on display at Norton’s through the end of May), but there is plenty of other work to do!

Yesterday, after taking my daughter to school and a quick, 10 mile bicycle ride in Forest Park, I assembled a wedding album for a client (I had already ordered the parts and prints), I designed an album and sent a proof to the client for approval, updated some of my web sites, paid some bills and wondered why my creditors can’t seem to pay as promptly as I do.

I’ve also been reading. This week’s book is about the Fair Tax proposal. I’ll give you a brief overview and then you should read about it yourself. I’m sold on the idea.

Fair tax eliminates all withholding taxes (we get to keep every cent we earn) and eliminates all of the pain of keeping track of expenses and dealing with the IRS, in exchange for a Federal retail sales tax that is collected by the states and remitted to the US Treasury. It’s necessary to read all the way through to see how it works, but, having done that, I can say that it really is a big improvement over our existing system. Although as a businessman I would have to collect and remit the tax, it would still dramatically reduce my paperwork and simplify my life (for starters, it would eliminate the week of unpaid work that it takes me to keep, sort, file and calculate my yearly income taxes).

Check it out and let me know what you think.

Talking to people on the street, while canvassing door to door and where ever else I strike up a conversation, I frequently hear them express disillusionment with politics and their elected representatives. And with good reason! The same disillusionment is what has propelled me from private life into the political arena.

“Political leaders are out of touch with the people,” is a refrain I hear a lot (and I think it’s true). When local meetings with constituents started getting rowdy, many members of congress just quit having meetings. Imagine that, our representatives are afraid of us! What effect does this have on a representative democracy? What are our members of Congress thinking as they cower in Washington, unwilling to return to their homes without an escort? Is there no one brave enough to stand in front of a hostile crowd and defend his actions? Are there no real leaders in America today?

Political activism is frequently seen as a ladder to power and wealth. In nations around the world, politicians build themselves up as they move to each higher rank, frequently at the expense of the people they claim to serve. In our own country, many state and local officials seem to view their offices as mere rungs on the climb to a greater rank, and are looking to build their own power and wealth as they advance. We, the people, are not blind to this seeming self-serving attitude on the part those who want to lead us, and it generates a lot of skepticism among us.

“What makes you any different?” is a question I’ve gotten a lot.

“Why should we think you’ll do as you say if you get elected? People will say anything to get elected.”

Just a few days ago, a local political activist accosted me with the following question:

“You say you’re pro-life now, but would you sell your vote like Bart Stupak did, and just bend to pressure from the party bosses?”

These are potent questions, born out of frustration with the status quo of American politics; the flip-flop of the last thirty years between big-spending Republicans and big-spending Democrats, and with Supreme Court rulings defining new rights not previously even imagined.

For many in America, myself included, Roe v Wade was a watershed event, a signal that law making was shifting from the control of the people, through their representatives, to a powerful elite, fundamentally different in their thinking from the general populace (whom this elite feel no particular obligation to represent). The rights of a society to define itself (through institutions such as marriage and on issues such as the value of human life and punishment of criminals), are sacrificed on the altar of individualism. We see some people who profess to believe what we believe, act against that belief, and we come to doubt everyone. A certain cynicism about politics is in vogue.

I have no personal political ambitions. I have never particularly liked politics and am quite content to lead a private life. I am presenting myself to the people for one reason; to correct the error of the age, the idea that we can have something great and good without great cost to ourselves, and without a striving to be good ourselves. I am a Democrat because I believe that government is a tool by which we can build a better society, but I am not under the illusion that it will, by itself, do so. Government holds both great promise for the good of the people and at the same time, the greatest threat to the achieving of that good. It can be either friend or enemy to the people, and sometimes it seems both.

My concern with our current situation is not that government has over-reached its authority by passing the recent health care bill, but rather that it has consistently, under both Democratic and Republican presidents and Congresses, over-reached its ability to deliver. Our leaders have made cheap promises into expensive programs without a thought for the future sustainability of those programs. The new health care law is no different. Like Medicare, Social Security and Medicaid in their current forms, it is simply not sustainable. The primary difference between private insurance and government-run programs is sustainability. One of the reasons insurance companies are sustainable enterprises is they are regulated by government and required to maintain a certain ratio of assets to liabilities. It is the greatest of ironies that our local, state and federal governments (federal much more than the others) flout the very rules they force on private corporations!

As I noted in a previous column, all indications are that we are headed towards a long period of economic trouble, increased taxation, higher unemployment, reduced services and benefits and a larger number of people in poverty. The data are clear, and they point to trouble, big trouble. We need responsible change and responsible leaders who will lead us in paths of sustainability and we need them now.

We’ve become aware, over the past few months, of some of the debt we’ve accumulated on the Federal level (there is some that hasn’t been widely talked about: the $6.3 trillion of liabilities belonging to Freddie Mac and Fannie Mae, putting our total current debt at around $19 trillion), but many of us are still unaware of the massive unfunded liabilities that are threatening our Federal, state and local governments; liabilities that almost make the national debt look like pocket change (unfunded liabilities are promises made - usually pensions - for which money has not been set aside).

The Social Security and Medicare Trustees report that the programs have $107 trillion in unfunded liabilities. The unfunded pension liabilities of the 50 states are estimated to be around $1 trillion (though some think three times that number is more accurate), and local governments are not immune to the problem.

The City of St. Louis has seen its pension costs shoot from $7 million in 2000 to $61 million this year, with the projection for next year to be $72 million (the city’s solution is to borrow money by issuing bonds and to increase the sales tax).

San Diego has unfunded liability estimated at $2.7 billion as of this past November. Atlanta has $1.5 billion in unfunded liability. Pittsburgh has a $600 million shortfall and Omaha $500 million. There are undoubtedly many more examples out there of government entities, large and small, which need to raise more revenue (much more) to meet their obligations. Can you say “tax increases for the middle class?”

On top of all this (gee, I hate to sound so negative, but I’m afraid it’s true), we have not yet seen the end of the mortgage foreclosure crisis (there are a lot of homeowners just barely hanging on) nor the middle of the commercial loan crisis; there’s an estimated $3.4 trillion in commercial loans outstanding and a lot of them are in trouble. Employment is not increasing, new jobs are not being created and we just added to the burden with a national health care bill. We are headed for a world of hurt, and it’s not too far away!

So what can we do about it? How are we going to deal with this situation? It’s easy to see that some benefits will have to be cut, general spending will have to go down, and new sources of revenue will have to be raised, all at a time when most of us are having a lot of trouble keeping our heads above water! The first thing we should do, though, is repeal the health care overhaul. Then we really need to get busy and figure out how we’re going to manage for the next 30 years or so. It’s time for new talent in D.C.

You can help change things by supporting my congressional campaign. Visit my campaign site here.

On March 23, 1775, Virginia planter Patrick Henry rose in St. John’s Church in Richmond, where the Virginia House of Burgesses was meeting, to deliver his famous “Give me liberty or give me death!” speech. It was a time when feelings ran high on important issues of the day, the issues of taxation and the rights of local government against the King. Today, 235 years later, passions are running high on the issue of health care reform and the rights of State Governments against the Federal. Most of us think something needs to change, but few of us agree on what to do. Just this week, the US House of Representatives passed a bill already passed by the US Senate, to overhaul the American health care industry. Here are some of the highlights, according to the Associated Press. The new law:

Requires all health insurance plans to maintain dependent coverage for children until they turn 26; prohibits insurers from denying coverage to children because of pre-existing health problems. 

Bars insurance companies from putting lifetime dollar limits on coverage, and canceling policies except for fraud.

Prohibits insurers from denying coverage to people with medical problems, or refusing to renew their policy. Health plans cannot limit coverage based on pre-existing conditions, or charge higher rates to those in poor health. Premiums can only vary by age (no more than 3-to-1), place of residence, family size and tobacco use.

These three requirements are, naturally enough, going to raise the cost of insurance considerably, though some of that may be offset by the larger pool of people forced to buy insurance or pay a substantial fine. The Medicare and Medicaid provisions, such as reducing already low reimbursement to doctors and hospitals, increasing the amount of coverage for seniors’ medications and greatly expanding Medicaid coverage, are going to add considerably to the cost of those programs and cause a reduction of services at precisely the point when they are already reaching insolvency.

On top of all this there will be a reduction in the medical expenses we will be able to deduct from our taxes, an ever increasing “fee” on drug manufacturers (oh, that’ll make the drugs cost less!) and a huge tax on generous health insurance plans. All of this is estimated to cost us $938 billion between now and 2020.

So is that estimate (from the Congressional Budget Office) reasonable? The Senate Joint Economic Committee (as quoted on The Foundry blog) indicates otherwise. The original Medicare estimates for the entire program from 1967 to 1990 were only about 10% of the actual costs! The track record of the US government on predicting expenses is not very good (one of the reasons we have such a huge national debt). It is entirely foreseeable that this new program, rather than reducing the deficit, as the CBO claims, will not only increase it, but add trillions to our national debt over the next ten years while piling another burden on the backs of the middle class. Instead of shoring up the programs we have and making them self-sustaining, Congress has given us yet another unsustainable program, on the very eve of a national melt-down; a time when the deficit is out of control, millions of Americans are out of work, and the nation is about to plunge into further recession; Bad timing, Congress, really bad timing!

It’s up to us, America, to change this situation. We can stop the flip-flop from the unrestrained spending of the Republicans to the crazed spending of the Democrats. only by reforming the Democratic Party. It’s your money! Let's spend it responsibly! It’s time to have leaders in Congress who know how to say NO to massive new entitlements built on the backs of the middle class, penalties that threaten our most basic liberties, and promise medical gridlock on the scale of Britain and Canada! Instead, let's focus on jobs and industry and build a sustainable system that will benefit all Americans! Contact me and get involved in change for the better! 

There weren’t too many people around as I walked along Washington Street from the Metro station. I got to the corner of 8th street at 4pm and about a half dozen people with signs were milling around outside the Renaissance Grand hotel. I walked south on 8th street, talked with a few people and got checked out by the Secret Service before returning to Washington Street, where the action seemed to be. I talked with some ladies demanding health care now before I crossed the street to see what was happening on the other side. By this time the crowd had grown considerably (though I don’t think it ever got larger than a few hundred) and I had little difficulty engaging people. I bumped into Candice Britton, another responsible Democrat, and a number of others I’ve seen around.

 My message is simple: we need a social safety net, we need quality education for all of our children and we need a strong military that’s alert and ready to defend our nation against the enemies we will face in the 21st century. Most important of all, we need to insure these vital areas of our national policy are monetarily sustainable; that they continue to be properly funded in a way that will not break the backs of the working people of America. Businesses and individuals across the nation are coping with reduced income by cutting spending and looking for new revenue (a second job, longer hours, new product introductions); the Federal government needs to do the same. Instead of spending less money, though, Washington is spending more, leading many of us to suspect that they just don’t understand the problem.

Congress has been deficit spending for so long that there are many people who think it can go on forever without ever having to pay it off. To many people our national debt is not even a concern (this seems to include some members of Congress). President Obama, in his speech in St. Charles, referred to this when he said,

“Washington is a place where tax dollars are often treated like Monopoly money, where waste – even billions of dollars in waste – is accepted as the price of doing business.”

Treasury Secretary Geithner, that same day, called the budget deficit “unsustainable” and according to the BBC, other analysts labeled the latest figures “frightening.”

Ironic, then, that one of the people I spoke to, there in the crowd downtown, told me I wasn’t a “true Democrat” but rather a “bean counter.”  Apparently he thinks unsustainable and frightening are in line with the principles of the Democratic party!

Just for the record, though, I don’t. Spending money we don’t have is at the top of my list of things not to do. Unsustainable government programs are something I think we should avoid. We’re in a situation where things are going to get worse, not better, and we need to take action now. I need your help if this is going to happen. Volunteer for my campaign. Donate to the cause. Let’s see if we can stop this train before it wrecks.

 e-mail – campaign2010 at edwardcrim.com

phone – 314-504-6692  

Tuesday, I headed to Jefferson City, accompanied by my campaign committee and the media (well, my son with a video camera), all four of us fitting comfortably inside my son’s 1986 Cadillac. It was a gorgeous day, sunny with clouds, and there was political discussion (imagine that!) all the way there and back. We crossed the wide Missouri into the capital (and missed our exit) shortly after 11am, and just a few minutes later we were walking into the lobby of the James C. Kirkpatrick State Information Center (try to avoid getting a building named after yourself – it usually means you’re dead).
The Missouri Secretary of State’s office seems to be very well run. I’ve previously dealt with them only through their web site (Fictitious Names, LLC filing, etc.), but on the first day of filing for office (which is when most people show up) they had friendly, helpful people everywhere, with all of the steps in the filing process neatly spread throughout the building. 

We were first greeted in the lobby, by a man who directed us to the Department of Revenue’s desk, where I was to turn in my affidavit declaring that I was not aware of any tax delinquency on my part.
“You’ve filled it all out!” exclaimed one of the women from the DOR, as the other looked over her shoulder.
“Wasn’t I supposed to?” I asked, a bit puzzled (I had not only filled it out, I had it notarized, as the instructions indicated).
“Yes!” she responded with a big smile (apparently, though, many applicants hadn’t).
The next table I visited was occupied by the representative of the Missouri Democratic Party, who cheerfully accepted my check for $100 and wrote me a receipt. Then we walked up to the third floor, where the Secretary of State’s office is, to begin the actual registration.
I struck up conversations with some of the people I met in the line there, and when Secretary of State Robin Carnahan came by, had a photo taken with her.
“What office are you running for?” she asked.
“Nothing personal,” I said, “I’m running for the seat your brother is in.”
“Be nice.” She replied.

The rest of the time was spent at various desks, checking my ID and the forms I’d taken care of in the lobby downstairs, picking a random number to determine my position on the ballot, verifying my status as a registered voter and recording a message identifying myself for the visually impaired. Then it was to the main desk to get copies of everything and the process was complete.

The ballot application process is complete, but the actual work of the campaign is just begun. So, what are you doing this spring and summer? Do you want to help change our country for the better? We all should be concerned about the financial mess our nation is in and doing all we can to move it to fiscal solid ground. We need people to help with canvassing, we need help setting up neighborhood meetings and we need financial contributions. We need to act now if we really want to secure our future. Call or email me if you’re ready to get involved.

In a new article entitled “Drowning in Debt: What the Nation’s Budget Woes Mean for You”, Devin Dwyer, writing for ABC news, takes a look at how our massive national debt threatens the financial health of the entire nation. Dwyer quotes former U.S. Comptroller General David Walker as saying “Within 12 years… the largest item in the federal budget will be interest payments on the national debt. [They are] payments for which we get nothing.”

Some of the other predictions for America outlined in the article are:

            Substantially lower standard of living
            Inflation, which would erode our savings
            Higher interest rates
            Stagnant wages
            Fewer jobs

The article hints at what is almost certain to come along with the above list, higher taxes, but what is not mentioned is potentially as devastating as what is. Dwyer limits his examination of economic woes to those on the Federal level and fails to look outside that sphere to what is happening on a state and local level.

 Tami Luhby, senior writer for CNN Money fills in some of the missing parts of the picture in her article “States short $1 trillion to fund retiree benefits”. David Nicklaus of the St. Louis Post-Dispatch adds another piece in his column, warning on Feb 12 of the increased pressure in the City of St. Louis from the soaring cost of retiree pensions (a tenfold increase in 11 years). Imagine a government (or company, for that matter) that has to lay off current workers to pay the retired ones!

The picture doesn’t look good at any level, but one thing is a certainty; it is much less bad right now than it could be thirty years from now. Thirty years seems like a long time (I was married thirty years ago this coming August) when you are looking forward, but looking back gives an entirely different perspective. I’ll be 85 in thirty years (and maybe finally eligible to collect Social Security retirement under the new rules). I want to be known for standing up in America’s current time of difficulty and taking action. I want to be known as a friend of the ordinary person. My dream is a big one; that one average guy can reach out to other average people and put together a coalition that isn’t afraid to tell it as it is, and is willing to go out to stop the 12 trillion pound offensive tackle headed our way. How about you? Do you want to be part of the solution, or are you content to be part of the problem?