Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Blog

    Reid and Sacrifice

    07/07/2011

    Democracy and Power 106:  A politician receives no financial gain for good policy or punishment for bad policy.

     

    It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong. – Thomas Sowell

     

    Reid and Sacrifice

    Harry ReidMajority Leader Harry Reid (D, Nevada) is seeking a “Sense of the Senate” that high-income earners must pay more taxes.  Reid reasons that because America has an enormous debt the higher-earners should help pay down the debt.  Of course, this is political theater developed by spinmasters – “the rich must pay more” – which will be repeated and repeated.

    The mantra will be stated and repeated by all Democrats and “progressive’ organizations.  The object is to paint the rich as greedy Republicans.   Equally important is that their statements and efforts will divert attention from our real problem, the enormous debt endangering America and the world’s financial systems.

    Reid has wantonly and recklessly caused the debt.  As a leader, he voted and urged many Congresses and many Presidents to spend more than they taxed.  Of course, Reid is not solely responsible.  Most Members of Congress and Presidents are guilty -Democrats and Republicans alike.  As Thomas Sowell said, It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.

    Ah, but there is a means to the end of reckless mismanagement by Congress and the President.  Why not hold Congress and the President to a fiduciary standard – “A Member of Congress and a President would be financially responsible for the creation of debt?”  A Member of Congress would be personally liable if they failed to conduct their responsibilities with “the degree of skill and care an ordinarily prudent person in a like position would exercise under similar circumstances.”

    Why would Congress and the President enact this legislation into law?  Especially since they are definitely opposed.  Well, they did pass this exact law against executives of failed banks.  Executives of failed banks that do not exercise the care of an ordinarily prudent person will forfeit two years of pay – called a clawback.  

    For Congress a couple of changes would be required.  “The degree of skill and care of an ordinarily prudent person exercising control over other people’s entrusted money,” would prevent the defense that all politicians create debt – even dangerous debt.

    Additionally, two years salary is not an appropriate remedy.  When politicians willfully and reckless create debt, they should be totally liable.  This is a “sacrifice” that will force politicians to become good stewards of budgets and every taxed-American’s money.

    Without a doubt, America’s system of governance would substantially change – for the better.