2011, Duty Calls

By Robert E. Freer, Jr., President of The Free Enterprise Foundation

“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in their bloodstream. It must be fought for, protected and handed on for them to do the same.” Ronald Reagan

Here we are on the cusp of one year ceding its hold on us to the new. The one we are leaving had precedent making social legislation and important midterm national elections rejecting America’s drift to the left. The elections auger that change is ahead; The Debt Commission has reported on the depth of our financial crisis; Party caucuses have been held for those elected, legislative leadership selected, and the great after election Congressional Office lottery has been completed. All is in readiness for what promises to be an eventful 2011 on Capitol Hill. The press is having a field day with the changed alignment and trying to figure out whether the President’s working a deal with Republican leadership on taxes for 2011 means that he will make a “Clinton Pivot” and govern from the center. The answer is “Yes” and “No.” Don’t you just love the clarity of that? Next thing you will start accusing me of being a politician.

The answer is “Yes,” in that the economic facts of our financial peril are too real to ignore regardless of governing philosophy. Our friends rely on our financial strength and our enemies are only too ready to take advantage of our financial weakness and economic chaos. Right now those enemies are practicing their mischief with an optimistic gleam at the mayhem they expect to direct our way in the next several years.

Policy does have consequences, and we are on the wrong end of an era of profligate spending. We are drunks babbling on the barroom floor, not sure we have the strength or the will to pull ourselves up and head into the cold reality of the day. Our national mind is feeling the lingering effects of our generational binge. The question is whether the collective pain of our hangover is sufficiently painful that we will finally agree to go on the wagon at least long enough to set the economy on the right track.

I continue with a qualified “Yes” as to the President attempting to find a middle ground with the new Congress on a complete re write of the tax code to resemble something like that which was recommended by the Debt Commission. His Presidency is so damaged that his only road to re-election is to put a great deal of energy into this effort in order to put the liberal agenda of his first two years in office to the side. Now here is the “NO.”

He is a committed liberal, the most “left” of all our Presidents. His traditions are foreign reflecting his parentage and the educational and living experience for many of his formative years in Indonesia. His core constituency is the liberal wing of the Democratic Party, and he cannot go so far toward the center that he fractures that portion of his electoral coalition. The road to tax reform will be fraught with battle over brackets and what deductions/credits will remain and any limits on them to the extent they continue to exist at all. He will wheel and deal as to the math of the code.

The bracket battle is where it will stop. The President will have to maintain an impassable wall on the welfare state created in the first two years of his term. National healthcare will be the “Battle of the Bulge.” The more than a trillion at stake in new “entitlements” as a result of changes enacted in 2010 are the most glaring target for fiscal reformers to have as their prime target. In fact substantial relief in a five to ten year time frame cannot be achieved without doing so. The heck with the thirty or forty years that has been used in some formulae. This country needs to dramatically change the very nature of its entitlement posture if we are to meet the financial threats that face us. It is certain as well that the financial threats will be followed with commercial and geo political challenges. Already we are seeing Iran work a deal to place medium range ballistic rockets on Venezuelan soil that can reach the U.S. That should not stand. Those forces in the world which abhor freedom and free markets will feast on American weakness.

As I write this, David Walker, former Director of The General Accounting Office, and now President of the Peter G. Peterson Foundation is chairing a meeting of three hundred national leaders from all fields in New York City. Their tag line for this event is “No Labels”, and they propose to speak for the seventy percent of the public that does agree on the broad outlines of what needs to be done.

Duty does call all of us in 2011 to think in terms terms of national necessity not political wants. Our fiscal house is burning down, and all of us must be part of the fire brigade to douse the flames. There is time enough ahead to discuss what level of welfare is to be forthcoming from the federal government. The largesse today, if not seriously cutback, is likely to lead in the foreseeable future to a failed state.

While taxes at the upper reaches of the tax code may go higher, increase in revenue is likely to come from jettisoning virtually all deductions for those who are in the highest bracket. The loss of virtually all deductions will more than have to be balanced by cuts in our welfare budget. Costs on those who are doing well must also look to an increase in their charitable efforts to help their state and local communities to weather the storm. It is the patriotic thing to do and may save your children and grandchildren from the perils of a poverty stricken future with limited opportunity to maintain the American Dream.

Several years ago I wrote an end of year column on Pandora’s Box. In addition to all the ills brought with its introduction to mankind, Pandora, in her second look into the vessel released Hope to sustain us in times like these. We can grasp that hope with sleeves rolled to the elbows in serious concentration on the task at hand. Come on Back, America! Come on back!

_._

Copyright © 2010 by Robert E. Freer, Jr. All rights reserved

About the author: Robert E. Freer, Jr., after an extensive career in government law and business, serves as the first BB&T Visiting Professor in Ethics and Free Enterprise Leadership at The Citadel. A regular contributor to the Mercury, Prof. Freer may be reached at robert.freer@citadel.edu. Copies of his earlier columns may be found at The Free Enterprise Foundation. A compilation of “classics” from his articles has just been published by University Press as Citadel Values II and can be found at Barnes and Noble and on Amazon.com.

This article may be republished unedited in its entirety provided that copyright statement and author by-lines are kept intact and unchanged and hyperlinks and/or URLs provided by the author remain active.

If you’d like to contribute an article to this collection please e-mail it for review .

Go to 2010 Business Ethics Articles from 2011, Duty Calls