Lincoln - Way

Town Hall Meeting

April 22, 2010

America in Crisis
• Debt is $12.8 Trillion
• Obama projects endless rising debt
• Unheard of levels of government
employment
• All government pension costs out
of control
• Litigation out of control
• Education and health care costs
out of control
 America in Crisis

This is what debt of

$12.8 Trillion looks like:

$12,800,000,000,000.00
America, in 234 years, has never
owed so much to so many
America in Crisis - Agenda

• Bit of History
• Wealth creation
• Economic burdens
• Debt
• What can we do?
Norman J. Kost
• Who am I?
• Father, soon to be Grandfather, Business
man and Amateur Golfer
• MBA, CPA with one hole in one
• 40+ years in finance, economics,
accounting and business strategy
• Retired; owner of software company
• Fiscal conservative
• Essayist: www.thefundamentals.us
Fiscal Conservative

• Live within your means

• Spend others money as your would
spend your own
• Repay debts
• Save for rainy day
• Meet your needs and prioritize your
wants
• Help others who have needs
 History Lesson
(15 years of history)

• 1773 Boston Tea Party

• 1774 First Continental Congress
• 1775 Shot heard round the world
• 1776 Declaration of Independence
• 1777 Articles of Confederation
• 1783 British surrender
• 1786 Shays rebellion
• 1788 USConstitution adopted
History Lesson – earlier
17 years of history

• 1756-1763 Seven Years War

• 1756 British Debt £ 75 Million
• 1763 British Debt £800 Million
• 1764-1767 Sugar Act, Stamp
Act and Townshend Acts
• 1770 Boston Massacre
• 1773 Boston Tea Party
It is incumbent on every
generation to pay its
own debts as it goes.

A principle which if
acted on would save
one-half the wars of the
world.
TJefferson
 Wealth Creation

• Four basic ways to create wealth:

• Grow/harvest from earth
• Extract from earth
• Manufacture from grow/extract
• Labor to do above
• Competition improvements
Economic Growth = Jobs
Jobs = Economic Growth
 Wealth Creation - Burden

• Too many non workers

• Protection of special interests
via anti competition rules/laws
• Taxes/Litigation
• Trade restrictions
• Debt
• Bad Leadership
 Workers/NonWorkers
• Total US Population: 310,000,000
• Total US Workforce: 150,000,000
(citizens between 17 and 65)
• 18% are un(under)employed: 27,000,000
• Government employees 22,000,000
• Wealth creation employment 101,000,000
• All others being supported 209,000,000

Economic Burden
Causes = Special Interests

• Civil rights • Farmer’s rights

• Women’s rights • Welfare rights
• Consumer rights • Pension rights
• Environment • Health care
• Disabled rights • Veteran’s rights
• Employment • Union rights
• Housing rights • Animal rights
• Education rights • Gay rights
• Voting rights • Immigrant rights
Special Interests raise
cost of everything
• SEIU • Trial Lawyers
• AFSCME • Medical lawsuits
• AFL-CIO • Pharmaceutical
• NEA • Farmers union
• AFT • Oil companies
• NTEU • Bailouts
• Postal Workers • Banking
Attorneys per capita

USA                265

Brazil                  326
New Zealand        391
Spain                  395
Italy                     488
United Kingdom    401
Germany             593
France             1,403
 Who Pays the Taxes?

1979 2006
Taxes Taxes
Top 5%: 30% Top 5%: 45%
Top 40%: 77% Top 40%: 86%

Social security Social security

Top 5%:8% Top 5%: 14%
Top 40%: 63% Top 40%: 68%
The Debt Burden

• Today the US owes $12.8 Trillion

• $8.3 Trillion to public/foreigners
• $4.5 Trillion to other gov’t agencies,
principally Social Security Fund
• $12.8 projected to be $20.0 by 2020

Let’s take a look at this debt

National Debt at end of:

• Ford $ .065 Trillion

• Carter .930 Trillion
• Reagan 2,684 Trillion
• Bush I 4,177 Trillion
• Clinton 5,662 Trillion
• Bush II 10,700 Trillion
And now:
• Obama 12,800 Trillion
A Brief History of US Debt

• Prior to GWBush: $ 5.8 Trillion

• GWBush years: $ 4.9 Trillion
• BHObama months: $ 2.1 Trillion
• Total Debt Today: $12.8 Trillion

• GWB ave/mo: $ 51 Billion

• BHO ave/mo: $140 Billion
National Debt per capita

• Ford $ 2,997
• Carter 4,094
• Reagan 10,979
• Bush I 16,379
• Clinton 20,067
• Bush II 35,153
• Obama 40,101
National Debt per employee

• Total debt today $12.8 Trillion

• Total employees 101,000,000

• Debt per employee is calculated

• $12,800,000,000,000/101,000,000 =

$126,733 per employee!

Exports per capita

• Netherlands $23,400
• Germany 14,500
• South Korea 7,200
• France 7,100
• Italy 6,400
• Britain 5,800
• Japan 4,100
• United States 3,200
What is the real answer?

• Good leadership
• Live within our means
• Good leadership
• Repay debt
• Sacrifice and frugality
• Good leadership
• Insist on objectives and results
www.thefundamentals.us
• Deficits = Debt = Destruction
• Remedies:
• Sacrifice and Frugality
• Bankruptcy for insolvent entities
• 5 + 10 + 15 = -5% debt repayment
• Constitutional amendments
• Balance budget
• Term limits
• Restrictions on federal/state mandates

Require 2/3rds congress/states for proposal;

and, 3/4ths of states for ratification
Contact us: thefundamentalsus@gmail.com
www.thefundamentals.us

• Our proposals:
• 5+10+15 = -5% debt repayment
• Balanced budget and sunset law
• Loser pays; limit on damages
• Term limits on congress
• Measurable objectives on all laws
• Limits on federal mandates
• No interstate taxation
• No federal sales tax or VAT
 What can I do?

• Attend meetings and rallies

• Challenge the status quo
• Vote against tax increases
• Display bumper stickers, yard
signs
• Write a few checks to provide
some funding to these efforts
 I want to do more…
• Study issues, read and learn
• Contact your elected officials
• Write letters and insist that
candidates take measurable steps to
stop spending and repay debt (see
listing at www.thefundamentals.us )
• Support groups which specialize in
fiscal responsibility/lower
government spending
 Still more….
• Become active in your local political
groups - city or county board of
trustees, school board, park districts,
political party
• Volunteer to participate on
committees and special advisory
boards
• Campaign for good politicians
• Run for office
I predict future
happiness for
Americans if they can
prevent the government
from wasting the labors
of the people under the
pretense of taking care
of them.

TJefferson