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This all started in December of 2009, when John Lumbard penned the article below for the “February” issue of the Lumbard Investment Counseling newsletter ( Enough people responded to justify setting up a web site or blog, and we were especially impressed with the writings (which started with a letter to the Wall Street Journal) of Jim Schaefer.  Jim has long had a passion for educating Americans about the need to set aside personal savings for retirement, and he moved easily from there to our federal government’s massive borrowing, and its inability to save for the future within the Social Security and Medicare trust funds.

More recently we’ve been joined by Ralph Lockhart, who wrote a persuasive letter to the editor regarding term limits, and Peter Wolf, who had so many letters to the editor published by the Wall Street Journal that they shut him off for a month.  Dan H is yet-another investment adviser and yet-another Californian—why are there so many disenchanted Californians?—with a front-row seat for the unfolding spectacle of budget Armageddon.  Austin Russell, a Freshman at a prestigious east-coast university, brings the Generation Y perspective.  Tim F. is an electrical engineer who wants to see stronger incentives for work and savings. Michael Smith is a self-described News Junkie who sees the world through the clear glass sold by his employer.   Our writers hail from California, Oregon, Texas,  Kentucky, and New Hampshire.


From the February 2010 issue of Insight:

“To deliver on all the government’s obligations and promises we’d need $175,000 per person right now.” –The Concord Coalition

That’s $53 trillion. It includes both the existing debt and the future unfunded cost of entitlements such as Medicare and Social Security.

Bashing BushObama might be our national pastime, but it’s the Congress that runs the country—most particularly the nation’s budget. With a 2/3 majority the Congress can overrule the President on just about anything. And many congressmen now state openly that their job is to get as much taxpayer loot as possible for their constituents, even if it means that we all run headlong, like lemmings, over a cliff and into bankruptcy.

“Kicking The Bums Out” isn’t going to work, at least not for long. But way back in 1997 the U.S. Congress came within a single vote of passing a balanced-budget amendment to the Constitution, and succeeded in putting a line-item veto into law. That law wasn’t worded carefully enough to pass muster at the Supreme Court, but today our own Senator Judd Gregg is pushing hard for a better version. It’s a wonderful leap towards sanity, but to reach sanity—actually balance the budget—we’re also going to need that amendment to the Constitution.

The constitutions of most states demand balanced budgets, and in fact 49 of the 50 states are guided by language to that effect. We’ll need to make allowances for wars and recessions, but all the proposals we’ve ever seen have done so. Some day we’ll look back on the current practice—allowing Congress unlimited use of our credit cards—and think that it was a risky and lunatic way to operate.

As long as We The People are taking back control of our Congress, we should also insist on term limits. Washington is full of lifetime politicians who maintain their grip on power by showering money on their constituents. They’re buying votes with your money.

We want a tax system that’s fair and simple—so simple that nobody can manipulate it to their advantage. And we should limit government spending to the levels we had when we last had a balanced budget, back in the Clinton years. Federal spending in the year 2000 was just 18.4% of GDP. We’ll round it up to 20%, splitting the difference between 2009 taxes (15% of GDP) and 2009 spending (nearly 25% of GDP).

What we need now is a simple platform that can be used by congressional candidates from both parties in the coming elections. Send us your ideas. If 25 sober and coherent citizens respond, we’ll set up a web site to discuss proposals and provide a rallying point. We’ve already reserved a web address:

It’s a lot to hope for, but let’s never forget that we’re borrowing huge amounts of money from our children. How can anybody ignore that simple fact, and continue to steal money from his sons and daughters?

John Lumbard, CFA

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