A Nation Like No Other (28 page)

With their ideologically driven, counter-productive crusade against fossil fuels, President Obama and liberal Democrats in Congress are failing the American people, compromising our economic strength, undermining our energy independence, and preventing many Americans from earning a living.

As explained earlier in this book, in the 1990s, when I was Speaker of the House, we replaced the failing Aid to Families with Dependent Children (AFDC) welfare program by repealing policies that fostered dependence and installing new ones that promoted work and self-reliance.

The old AFDC discouraged work in many ways, especially by failing to limit the amount of time someone could receive assistance and failing to limit the increase in payments a person could obtain by having more children. In contrast, the cornerstone of our new policies was a requirement that beneficiaries either work or go to school, a rule that also increased the incentive for parents to stay together, since at least one parent had to work to qualify for benefits. This helped break the cycle
of dependence that trapped people in poverty, undermined the family, and encouraged listlessness.

The welfare reform of the 1990s was the single most successful social policy reform of the latter half of the twentieth century. In light of this undeniable model of success, it is time to apply the same principles—namely, a commitment to work—to other federal welfare programs, including Food Stamps, Medicaid, SCHIP, housing assistance programs, and all other federal means tested programs providing assistance to low-income families. The repeal and replacement strategy that worked for welfare will work in each of these areas, because it reinforces the habits of liberty that empower the individual, strengthen freedom, and support American Exceptionalism.

For decades now, the federal government's official reports have shown that Social Security will not be able to pay all promised benefits to the Baby Boom generation—which began retiring this year—without severe, unsustainable tax increases. In fact, possibly as early as 2029, the Social Security trust funds will run out of money to pay promised benefits. Paying all promised benefits to today's young workers would eventually require raising the total payroll tax rate to as much as 44 percent—three times current levels—and ultimately more.

Our current Social Security system operates as a pure tax-and-redistribution system, with no real savings and investment mechanism and no ability to earn investment returns. Consequently, over the long run the system can only pay low, inadequate returns and benefits. Indeed, since the growing Social Security deficit will, under the current structure, ultimately require raising taxes or cutting benefits, the real effective return on Social Security contributions will be zero and eventually negative. A negative return is like putting your money in the bank, but instead of earning interest on it, you pay the bank for holding your deposit.

Instead of propping up this increasingly insolvent system, today's young workers should have the option of replacing the status quo with
a new system suited to twenty-first century realities. This system would pay far better benefits while empowering contributors with more responsibility over their own finances, providing a sounder economic foundation for them and their families.

This system has already been proven in the real world. It involves creating personal retirement accounts that would let workers choose between paying into the current Social Security program or saving and investing what they and their employers would otherwise pay into Social Security in personal savings, investment, and insurance accounts. Moreover, if a worker opts for a retirement account, he will still be guaranteed to receive the benefits promised by Social Security if his retirement account ultimately offers a lower return than the existing program.

Chile began allowing workers to choose retirement accounts thirty years ago, an idea they got from young economists who had studied in America under Milton Friedman. Chilean workers overwhelmingly invested in the personal accounts, and today they are reaching retirement earning twice the benefits of the old Social Security system or more, after a lifetime of having paid only half the taxes required by the old system.

We have seen similar results here in America. In 1981, local government workers in Galveston, Texas, opted into their own savings and investment system in place of Social Security. Thirty years later, these workers are enjoying the same results as workers in Chile. Likewise, similar positive results continue to emerge under the Thrift Savings Plan (TSP) for federal employees.

Sound financial principles are essential to a strong work ethic. A system where working people and seniors do not personally control their own retirement money is not operating on sound finance. It makes no more sense to trust the government with our retirement account than it would to trust the government with our personal checking account.

With personal accounts, working people and seniors would enjoy the self-reliance and financial independence that encourage the work ethic. A society based on the dignity of the individual must have a corresponding system of retirement that maximizes independence by empowering citizens to fully provide for their own needs over their entire lifetime.

It would be easy to believe it would take years if not decades to implement the large-scale replacement policies that America needs. But consider the following example.

In 1958, the Green Bay Packers had their worst season ever, winning only one game. But just three years later, they were NFL champions. Amazingly, from the worst team in Green Bay history, fifteen players became all-pro and seven became members of the NFL hall of fame.

What happened that produced such a dramatic turnaround?

Vince Lombardi happened. After becoming head coach in 1959, he created rigorous training regimes, demanded discipline from his players, and developed famous offensive plays like the Lombardi Sweep. He imposed on the struggling team the right values and right policies to win.

In his first year he took the worst team in football and led them to a 7–5 winning season. The next year they advanced to the NFL championship game, losing to the Eagles. After that game, Lombardi told his players this would be the last time they lost a championship game under his leadership—and he was right. The next season, 1961, the Packers won the NFL championship, the first of five the team would win during the 1960s. Under Lombardi's leadership, they never had a losing season.

So why is a story about the Green Bay Packers relevant to America's future? Because it illustrates a simple truth: rapid turnarounds are possible when good leaders implement good policies. This lesson applies as much to countries as it does to football teams. In fact, there are many examples in recent American history.

The first executive order Ronald Reagan signed upon taking office ended price controls on gasoline. It was signed into law on January 28, 1981, when gasoline, adjusted to 2011 dollars, was $3.30 per gallon. Just fifteen months later, gas had dropped over fifty cents a gallon to $2.77. By July 1984 the price was just $2.50 a gallon, and by December 1986 it had dropped almost 50 percent to $1.55 a gallon.

Reagan's bold leadership and effective policies produced a dramatic turnaround in the overall economy, leading to what supply side guru Art Laffer and
Wall Street Journal
chief financial writer Steve Moore call “the twenty-five year boom—the greatest period of wealth creation in the history of the planet.”
⁶

Reagan's signature economic policy—the Kemp-Roth tax cut—was signed in 1981. Once it was phased in completely in 1983, economic growth, which had been flat for more than a year, exploded almost immediately. GDP growth averaged a whopping 7.75 percent a quarter in 1983, with unemployment dropping from 10.4 to 8.3 percent, and then down to 7.3 percent by the end of 1984.

Reagan also imposed strong anti-inflationary measures. In January 1981, inflation was a staggering 11.2 percent. By the end of 1983, it was down to 3.8 percent.

As shown by both Reagan and Lombardi, the right policies can bring about fast, dramatic change, eliminating even deeply entrenched habits of failure and replacing them with habits that lead to success.

History demonstrates—and much of this book has discussed—just what habits of success have been unique to America and responsible for our remarkable prosperity, safety, and personal freedom. Just as any successful football team depends upon disciplined habits of practice, drills, and training, a flourishing nation depends upon a people that actively embrace the habits of liberty that keep us safe, strong, and free. A government can either establish a framework for public policy that reinforces these habits, or enforce policies that undermine and diminish them.

Indeed, American history is filled with examples of government policies that have succeeded because they have reinforced our most essential habits of liberty, or failed because they eroded those habits. The story of America itself is testament to the unprecedented success of liberty—as it had succeeded in no other time or place—simply due to a common commitment among an active and informed citizenry to the principles that undergird and sustain freedom. Part of America's great strength has been our ability to identify our own inconsistencies and to empower the right leadership that will replace failure with success, serfdom with liberty.

Lombardi and Reagan showed that real turnaround isn't just possible; it's available to anyone with the courage to challenge the status quo and the perseverance necessary to replace habits of failure with habits of success. Once you have both, it's not long before you're changing history.

I
n the introduction to this book, we recalled one of the most stirring, defining moments in American history: the reading of the Declaration of Independence to the American army assembled in lower Manhattan, and the ensuing destruction of the statue of King George III on Bowling Green.

The American troops were mostly volunteers—farmers and shopkeepers with hardly any military training. They had little reason to think they stood much of a chance against the professional, battle-hardened force of nearly thirty thousand British soldiers that was wading ashore nearby.

But they
believed
in something. It was an idea crystallized in the words of the proclamation that rang out that day in lower Manhattan: there are self-evident truths that derive from our Creator. That simple idea, and those patriots' courage to fight for it against overwhelming odds, would shake the world.

Today we look to a future fraught with peril. Many Americans fear that our nation's best years might well be behind us. But if you are burdened by such thoughts, you can take inspiration from the courage and sacrifice of our founding generation, and the unwavering faith in a better future they showed even in their darkest hours.

In the months after American troops were informed of the Declaration of Independence, those same men were sent reeling back in defeat. Battle after battle was lost across the summer and into the winter of 1776. An army of more than twenty thousand would be whittled down to fewer than five thousand in November as they retreated across New Jersey back behind the Delaware. On Christmas night they undertook a final, desperate lunge, and at last achieved a small victory at Trenton. But the struggle had just begun. The following year that army would be pummeled again and again in front of Philadelphia, losing the capital of our revolution.

Then came the horrid winter at Valley Forge, where thousands died of disease, starvation, and exposure—yet still they believed. They believed as they struggled through years of terrible warfare. And they still believed when, having overcome impossible odds and emerged victorious, they were again assembled just outside of New York City, watching as the last of the invading fleet weighed anchor and fled.

Whether you can trace your bloodline back to our founding generation or you have just sworn your citizenship oath, you are the heir of those American patriots. We are all their heirs. And that binds us together in a promise to both past and future generations—we must pass to our children and those yet unborn an America that is free, strong, prosperous, and united by the promise of our Declaration.

This means we must remain vigilant against the escalating threats to our liberties. And while the U.S. military is defending us from foreign attack, we cannot neglect the threats within our own borders.

The founding generation faced down the threats of their day on the front line. But today the fight is taking place on a multitude of fronts, on a thousand Bowling Greens. The conflict is playing out not on isolated battlefields, but in our own backyards. And the force for liberty in these
fights is not an army, but groups of concerned parents, churchgoers, small business owners, and individuals who unite in the struggle to preserve our way of life.

What follows are examples of the Bowling Greens of today, when ordinary Americans stood up for their rights and fought for their beliefs against powerful opponents. Some were victorious, some were not, and others are still fighting—but they all demonstrated the courage and conviction that is a hallmark of the American character.

The nation's biggest abortion provider, Planned Parenthood receives more than $330 million a year from federal, state, and local governments.
¹
While the amount of these subsidies has changed over the years, the point remains that since 1970 American taxpayers, regardless of whether they support abortion-on-demand services, have been subsidizing an organization that provides exactly those services.