The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- After four years of 9% unemployment (17% if you count those who gaveup looking for a job), virtually no economic growth, the onset ofinflation with gold prices more than doubling, record budget deficitsat 10% of GDP, and adding almost $6 trillion to the Federal debt,Texas Governor Rick Perry won a decisive majority in the November 2012Electoral College together with running mate Marco Rubio, the juniorU.S. Senator from Florida.
The following are the remarks President Perry delivered on the U.S.Capitol's West steps, just moments ago, today Jan. 20, 2013:
"Fellow Americans, this hour marks the running start on a new agendafor economic growth for the proud country conceived in liberty in 1776by our founding fathers. The new administration whose work will startin earnest later this hour, has a recipe for economic growth that hasbeen proven throughout history, and which we will prove yet again overthe next four years. It is called freedom.
Some of this freedom agenda we will be able to pursue by virtue ofexecutive authority. For other parts, we need the cooperation ofCongress. We believe that the American people will quickly see thebenefits of the things this administration will do on its own, so thatit will put pressure on Congress to join us in our economic freedom agenda, starting with the budget that will besubmitted to Congress tomorrow, Jan. 21.
Before I discuss the details of our economic recovery and freedomagenda, I need to mention the new ways this administration willconduct business.
First of all, for those of you who are expecting to attend variousinauguration parties tonight, this administration regrets to informyou that all inauguration festivities have been canceled. We simplydo not have time for hosting parties -- not today, nor at any timeover the next four years. The business of this administration isbusiness -- not hosting parties in a time of economic crisis. Therewill be no parades, no gun salutes, no orchestras and no choirs.
The cabinet will have its first meeting at 1pm right here inside theCapitol, at which point I will be signing a series of executive ordersto start liberating the American economy from the burden of biggovernment.
The executive mansion at the disposal to the U.S. President will bevacant 99% of the time for the next four years, in favor of keepingthe White House open for tourists. We live in an age of superiorinformation technology, including fast and secure telecommunications.As a result, it is not only feasible, but also desirable, that thechief executive of the Federal government spends his time with thepeople and with the essential government employees.
So who are these essential government employees, and where are theylocated? The first duty of the U.S. President is to be commander inchief of the armed forces, and as a consequence of this first duty, Ihave decided that I will spend a majority of the next four yearsliving with our troops, on the military bases across our 50 states. Istart by going to the Naval Academy in Annapolis tonight together withTreasury Secretary Ron Paul and Secretary of Defense John Bolton, andwe will stay there until Friday.
I have asked all the members of my cabinet to join me in thissacrifice. A majority of my cabinet members will, like me, spendtheir Mondays to Fridays living on different military bases from week toweek, 11 months per year. We will visit our spouses on theweekends, whether that means in Washington DC or as in my case, Austin,Texas.
Some cabinet members will travel with me from time to time; otherswill rotate around the other military bases. Obviously we will takethe time to visit the areas located within driving distance from thesemilitary bases, visiting with private companies and asking them whatwe can do to eliminate red tape and remove taxes off their backs.
One final thing on how this new administration will conduct business:There will be no playing golf for the next four years. Our dailyexercise will be together with the troops. Each member of the cabinetwill also get weekly practice on a military shooting range. This willincrease everyone's appreciation of the Second Amendment to theConstitution.
This administration's economic freedom and growth agenda needs to beput in perspective. In 1773, our founders revolted in armed rebellionwhen King George III imposed a tax on our favorite breakfast beverage.Thirteen colonies reluctantly came together to lend a short list ofenumerated powers to a small Federal entity. George Washington ranthis entity with approximately 50 bureaucrats from Liberty Hall inPhiladelphia.
America grew fast because prices of new goods and services such asoil, food, clothing and railroad services fell so as to generateunprecedented increases in the standard of living. By 1912, the onlycontact most Americans had with the Federal government was going tothe post office. By 2013, we can safely say that email hassuccessfully replaced all non-parcel mail and that
haveproven to do a better job at delivering parcels.
Before 1913, we had no income tax, no budget deficit, no unemploymentand no inflation. What did we have? Robust economic growth for mostof the previous 50 years. Imagine if we could reproduce this resultfor the next 50 years, starting today. This is what we aim to do.
But then, in or about 1913, a cancer started to grow in Washington DC.This cancer turned out to be the Federal government itself. In amatter of only a couple of years, we got the income tax, drugprohibition, the Federal Reserve, passports, and a costly engagementin a war originating with a Prince in Serbia, or some othercomplicated story involving an Austrian King. We shipped millions toEuropean battlefields, suffered crippling casualties, and called itWorld War I.
After those disastrous years 1912 to 1916, the government continued togrow at a dramatic pace. When Calvin Coolidge left this office in1929, Federal government spending stood at 3% of GDP, which wasalready at the level where our Founders were revolting against KingGeorge III. Today this has mushroomed to an alarming and oppressive25%. One-fourth of all that is produced in this country is consumedby the Federal bureaucracy, which has grown from 50 people in 1789 tomillions today. With this huge burden of government, is it any wonderthat American business went on strike in recent years?
We have ended up with a Department of Education that produces noeducation, a Department of Energy which produces no energy, aDepartment of Commerce which produces no commerce, a Department ofAgriculture which produces no agriculture, and so forth. You get thepoint. Millions of bureaucrats are paid to do nothing useful, orworse yet: cause mischief for the people who are forced finance them.
One example which illustrates the problem of big government is how ithas impacted education. In the first 200 years of our FederalRepublic, education of our young improved to become some of the bestin the world. Literacy, mathematics, history and science stood at thecenter of the learning process, and our students did better from yearto year.
Then came the Department of Education in 1980. Annual funding for theDepartment of Education has since grown from zero to $71 billion.
In the 33 years that the Department of Education has been operational,has student performance improved? Not at all. Test scores are down,and we fell behind other countries. Knowledge of history, mathematicsand other subjects such as basic reading and writing by American15-year-olds are often at the level of 12-year-olds in othercountries. And yet, spending on education has grown faster thanalmost any other form of government spending. Clearly there is adirect correlation between more government spending and a decline instudent performance.
The red tape strangling the U.S. economy manifests itself in allaspects of our lives. Is there anything you can do where you don'thave to ask, "Is it legal?" We have come to a point where everythingthat isn't mandatory is illegal -- and everything that isn't illegalis mandatory. You can't decide on a fixture in your home, decide howto sit in your car, or cut down a tree branch without risking a finefrom a government bureaucrat. Opening a business requires all sortsof government paperwork, and you can't buy health insurance acrossstate lines. Can you imagine what our founding fathers would havesaid about all of this?
In order to return America to its founding principles, with aright-sized federal government, we will do some easy things andsome difficult things. The easy one is to fire most of thebureaucrats and eliminate most of their budgets. As we look down theCapitol Mall here right now, we see big government buildings on theleft and on the right. Here is a simple message to those of you whowork there: At least 99% of you are fired, right now. I'm sorry, butyou have to go back to the private sector. Hard-working Americansshould not have to pay for government bureaucrats who do nothinguseful or otherwise torment the citizens with red tape.
What will remain of the Federal government are two things: First, theparts that will be with us forever. We need Departments of Defense,Justice and Treasury. However, we don't need anything else over thelong term, and even the ones we keep will be scaled down materially.
Here is the difficult part: Many Americans, particularly the elderly,have been led to become addicted to government checks, through nofault of their own. We cannot abandon them after all the promisesthat have been made. That said, however, we can change these programsmaterially in order to make sure that we are not trapped in thissituation with future generations.
We will abolish the Social Security Administration and Medicare infavor of a new multi-decade transition program simply called"Government handouts for the elderly." The eligibility age will begradually increased over the next few years to the age of 73. Fundsto pay for this program will come primarily from selling off land andother buildings owned by the Federal government. After all, theFederal government is by far the largest owner of land and real estatein the U.S., and almost all of these holdings will be put on eBayimmediately.
The size of these benefits for the elderly will be gradually reducedwith age all the way down to zero for those who are just turning 18years old this year. If you are born after 1995, you will never getany government checks resulting from old age.
We will cut the budget for the Department of Defense by more thanhalf, to $350 billion per year. That is just over $1,000 per Americanper year. We will be able to do so primarily by reducing our militarypresence abroad, including Japan, Korea, Germany, Iraq, Afghanistanand other countries. If we believe that someone is plotting to attackus, we reserve the right to preemptively take them out using anymeans necessary, but we do not need to spend hundreds of billions ofdollars per year, posting several hundreds of thousands of troops inany of these countries on a permanent or semi-permanent basis.
In sum, aside from the transitional payments to cover the equivalentof some of the former Social Security and Medicare programs, we willkeep the Federal budget at under $500 billion per year. Thatrepresents 3% of GDP, or where we were with Calvin Coolidge in the1920s.
While asset sales will finance the long-term transition in the elderlyassistance program, how will we pay for the $500 billion in regularongoing expenses? What I propose is that approximately 200 millionadult Americans pay their equal fair share. Divided equally betweenpeople aged 18 and up to retirement age, these 200 million people pay$2,500 per year, covering the $500 billion total.
Maybe $2,500 sounds like a lot; maybe it doesn't. But consider this:There would be no income tax, no sales tax, no wealth tax, no capitalgains tax, no interest tax and no dividend tax. There would also beno gasoline tax, no cigarette tax, or any other excise tax. And therewould be no income tax returns to fill out. We are basicallyabolishing the IRS, because we will not need a bureaucracy in order tofigure out whether an American has paid his or her $2,500 per year.
Starting a business will not involve any of today's bureaucraticheadaches. There will be no forms to fill out, no permits to apply,and no taxes to report. Entrepreneurship will naturally flourish.Whether you are a twelve-year-old running a weekend lemonade stand oryou're
you should not have to be shackled by a governmentbureaucrat's red tape or repressive taxation.
Today also marks a new day in monetary policy for the United States.Since the creation of the Federal Reserve in 1913, so much money hasbeen printed that the dollar has lost approximately 99% of its value.In the last 42 years alone, since we abandoned Bretton Woods in August1971, the price of an ounce of gold has increased approximately 60times from the old price of $35. This hidden tax and disruption inthe economy is now coming to a stop. I have instructed TreasurySecretary Ron Paul to take all necessary measures to prevent TheFederal Reserve from creating more dollars out of thin air.
The inflation over the last 100 years has been a horrific 99% hiddentax on the cash balances of anyone who trusted holding the dollar in1913. If it were true that societal prosperity originated in havingthe government print rectangular pieces of paper, Zimbabwe andArgentina would be infinitely rich. We could print money and just siton the beach while other people work around the clock to provide usgoods and services.
But of course it doesn't work that way. Counterfeiting only works forthe counterfeiter. In this case, it is the U.S. government which hasbeen engaging in this repulsive and criminal practice for 100 years.The government budgets have been growing like weed at the expense ofthe savings accounts of the American people. The practice ofgovernment counterfeiting will come to a stop today.
Some of these things this administration can now implement on its own.We sure canceled tonight's parties and all golf rounds for the nextfour years. For our freedom and growth budget, however, we needCongress' cooperation. As a result, we start this administration atthe top of this hour by convening with the leadership of both partiesright inside this building: The Capitol. We look forward tonegotiating with both Speaker John Boehner and the new Majority Leaderin the Senate, Rand Paul from Kentucky.
In closing, we say to our troops: We will see you soon, on yourbases, one week at a time. As for the golf courses: No, we won't beseeing you anytime soon. As for the economy, you will be getting avisit from freedom, starting already today.
Let the liberty Bell in Philadelphia ring once again. God Bless America."
At the time of submitting this article, the author had no position in the companies mentioned.
Anton Wahlman was a sell-side equity research analyst covering the communications technology industries from 1996 to 2008: UBS 1996-2002, Needham & Company 2002-2006, and ThinkEquity 2006-2008.