Friday, May 24, 2013
Bruce Poliquin is the former Maine State Treasurer and a 2012 Republican primary candidate for the United States Senate. He has 35 years of experience owning and managing businesses. Bruce is a proud third-generation Franco-American Mainer and Harvard University graduate. Visit BrucePoliquin.net for his most recent commentary and analysis on media outlets throughout the State about the important issues facing Maine families and their jobs.
Last week, I was chatting with a pleasant fellow between innings at a baseball game. The conversation found its way to his job and the rotten economy. He’s a landscaper who has a lot fewer customers today than a couple years ago. His wife works part-time at a convenience store so she can be home when their two kids come back from school. Even with both jobs, the nice fellow says it’s a struggle to afford heating oil, gasoline, groceries, insurance, car payments, and the mortgage.
As the ballgame inched along, our chat turned to Washington. Like many, my bleacher companion is disgusted with the “senseless” spending of the hard-earned tax dollars he and his wife send to Washington.
I mention the $17 trillion national debt resulting from years of borrowing to pay for Washington’s overspending. My fellow fan knows about the debt, but it doesn’t bother him like the reckless overspending. He isn’t sure to whom America owes the $17 trillion, and the number is so staggering large that it doesn’t seem to be real. Besides, he’s not sure how it impacts his family here in Maine, if at all.
I wish that I had had the graph below in my pocket to show this fellow. The red line charts the annual interest payments for the next 10 years that are owed on the $17 trillion mountain of public debt. As a comparison, the billions of dollars in each box is the amount Washington spends today for various programs.
The Northern European country of Denmark is probably best known as the home of medieval Vikings and the modern day welfare state. The Viking legend lives on but, today, the extremely generous entitlement programs are being retooled.
In case you missed it on Saturday, this New York Times article “Danes Rethink a Welfare State Ample to a Fault” describes how the expansive welfare net is breaking the bank and undermining the country’s work ethic.
In return for one of the highest personal income tax brackets in the world, 56.5%, Danes receive cradle-to-grave government benefits such as a university education, a hefty pension at an early age, and lifetime health care. In many cases, welfare cash payments and other benefits exceed the earnings of full-time workers.
Denmark is now weaning many of its citizens off comfortable government benefits and guiding them into the workforce. Early retirement plans have been reduced; unemployment benefits have been limited to 2 from 4 years; and lifetime disability cases are being reviewed. As the Danish population ages, public officials realize that these and other reforms must be enacted to avoid the financially and socially destructive routes taken by Greece, Spain, and Italy.
The Maine Legislature is scheduled to adjourn in mid-June. Before doing so, state law requires it to pass a new balanced budget for the next two years ending June 30, 2015. This public document will explain to Maine taxpayers how their elected state legislators will be spending their hard-earned tax dollars.
Three months ago, the LePage Administration submitted to the Legislature a proposed two-year budget that balances tax revenues with government spending by closing a projected $800 million hole. It’s now the responsibility of our state legislators either to adopt the budget as is, or to come up with their own plan that matches taxes with spending from mid-2013 through mid-2015.
Unlike in past years, the proposed LePage budget does not include hundreds of millions of federal “stimulus” money flowing from Washington, because there isn’t any. It does not include a stack of several hundred million dollars of unpaid bills owed to Maine hospitals, because it’s time Augusta repaid that debt. And, it does not include a gimmick to save money by sending home 13,000 state employees without pay for ten days each year.
A crucial though uncomfortable piece of the proposed LePage budget is to eliminate “revenue sharing” for the next two years. If passed, it will reduce spending by about $200 million, closing the $800 million budget shortfall by 25%.
Approximately 45% of the sales of the largest American companies come from customers outside our borders. The European Union is comprised of 27 countries and 500 million people, and represents 20% of the global economy. The EU is an important customer base for U.S. companies selling their goods and services overseas. What happens in the EU has a direct impact on jobs here in America.
After a home, buying a car is often the largest purchase made by a family. When a new vehicle leaves the dealership, the money ripples widely through the economy. Steel, plastic, glass, tire, electronic, leather, textile, computer chip, and other manufacturers sell their products to car makers. Automotive manufacturers directly employ 9 million people worldwide, with another 50 million jobs indirectly being created “downstream.”
Automobile sales are a key indicator of economic health. Consumers enjoy buying new cars when they believe their futures are bright. They shy away from such expensive purchases when they’re unemployed or fear losing their jobs.
If you missed it, have a look at this short Associated Press article from last week entitled “European car sales plummet, even in solid Germany.”
On Monday in Boston, we witnessed up close that the world can be a very dangerous place, including here in America. As we extend our thoughts and prayers to the victims and their families of the terrorist bombings, let’s renew our commitment to protect our citizens, our country, and our freedom.
Each of us can help. We can be more alert of possible dangers in our communities. We can be more aware of what our kids are learning on the internet. We can be more proactive in informing law enforcement personnel when something doesn’t seem right.
Our elected officials have an even greater responsibility to protect American lives, liberties, and pursuits of happiness. Through government, we have given them this power and authority, and they have taken an oath to do so.
Our economy is one of the most powerful weapons we have to protect America. A strong economy generates the jobs and tax revenues needed to defend ourselves and our homeland. Let’s encourage our elected officials to build a climate that fosters business investment, more jobs, and a more secure future. Addressing America’s fiscal crisis will be a big step in that direction.