The first gathering of the Twin Cities area Townhall meetup group for 2005 was well attended, including seven people who are new to the group. This included a couple of teenagers, one of whom was working on a project for a sociology class.
This month, Tracy, the fearless leader of the group, managed to get out the notice of the proposed agenda from Townhall.com in advance and we spent some time discussing the various talking points. Not surprisingly, we strayed off topic with great ease.
The first talking point, modified from the original, was what has Old Europe (France!) gotten right. One thing we were all in agreement on was the use of nuclear energy. France derives 75% of its electricity for nuclear reactors, and reprocesses spent fuel rods, thus reducing pollution and radioactive waste. Germany also generates a large amount of its electricity from nuclear reactors, accounting about one-third of its power production. Score one for Old Europe.
Also, European based corporations are not double taxed on revenues made in other countries, which double taxation is something Congress has been foisting on American Corporations that do business abroad. This double taxation reduces a U.S. company's ability to function competitively with their foreign equivalents. Score another point for Old Europe.
Next was what have they gotten wrong. This part covered a full gamut, from unemployment to high taxation, how high taxation and price fixing harm an economy, creating more unemployment, resulting in greater needs for socialized welfare (wealth redistribution). One point that was brought up here was that in much of Europe, a company must sell its products for X amount above the cost to manufacture, something I wasn't aware of. This eliminates the possibility of steep discounters liquidating discontinued (and/or failed) products at steep discounts, like in the dollar stores we see across the U.S. By failed products, I mean products that proved to have insufficient demand to sustain production for the price they must be sold for to be profitable.
Also, on the nuclear energy front, Germany has voted to abandon nuclear energy and does not have any plans on how to replace the loss of energy production.
From Nuclear Now:
Recently Sweden, Germany and Belgium have passed laws to abandon nuclear energy but without any definite plan for replacing it. The Swedish government closed one nuclear plant in 2002 and plans to close another in 2003. At the same time (2003 January) a poll shows that 55 percent of Swedes favor keeping nuclear energy and building new plants. The Finnish parliament recently voted to construct a new nuclear power plant - on a rather leisurely schedule.
Old Europe, in general, is getting nuclear energy right, with Germany being the biggest exception.
Then we strayed to what New Europe is getting right. These are countries that once comprised the Soviet Satellite States, such as Latvia and Estonia, as well as Russia, the Ukraine, and other parts of the former Soviet Republic. This part was a target rich environment, from low taxation, including the use of flat tax rates (this is different from a pure flat tax). This isn't to say that New Europe has everything right, however, they are growing leaps and bounds over Old
Europe.
There was also pointed out how some parts of Europe have become more economically free than the U.S., with Ireland and Denmark leading the pack. The question of whether or not Ireland is part of the E.U. was brought up, and although no one there was positive, it was thought that they were not a part of the E.U. I hope that is right.
Next up was whether or not it is realistic for W to get Social Security reform through the current Congress. The reaction, though mixed, leaned towards it being possible to get it through. Reforming the Social Security system would be a major step in the right direction, and would put all Americans on the path of becoming an investor class.
That the proposed reforms of Social Security would involve more Americans in investing is one of the main reasons the Democratic power houses oppose it. They know that the more people who become knowledgeable investors, even when dealing with 401k style investments, become more aware of the problems of high taxation, and the pressure for tax cuts and the corresponding cuts in Federal spending will increase.
One thing to realize is that if the Federal Government can afford billions of dollars in annual pork barrel spending for things like the Norwegian American society, then there is plenty of room for tax cuts. However, that's another topic.
Back to Social Security reform. By giving Americans the choice of having private investment accounts, and remember, this would be choice, not a requirement, many Americans will have a wealth building tool that they have never had before, especially those just starting out in life, or low income laborers. The current system is set up in such a fashion that many people, especially blacks (they have a shorter life expectancy than other racial groups), never get out of the system what they paid into, resulting in a net financial loss over the course of their life time. Consequently, it is these people on the lower echelons of the economic scale who will benefit the most from being able to divert some (preferably ALL, in my opinion) of their Social Security taxes into private investment accounts, whether those accounts are in the form of savings accounts (or CDs), mutual funds, bonds, or, even better, individual stocks (including stock dividend reinvestment plans).
These plans can then be passed on from one generation to the next, unlike the cash we now pour into the money pit that the current Social Security system was designed to be. Bear in mind that Social Security is merely a pipeline, where the money being paid into the system by the workers of today is used to pay those receiving benefits today...there is no investment or savings. It's all redistributed.
Before the "nay" sayers strike with their mantra of "what about those that lose their investments, we'll have to support them somehow!", remember that we are doing that now, and at a greater expense, plus only a portion of a worker's payroll taxes could be diverted to an investment account. Even if reform went as far as allowing everyone to divert the 6.5% they see evaporate from their checks now into a private account, that would still leave the employer matching funds to be mismanaged by the Federal Government to cover those in need.
Another point that should be noted is that anyone elected to office is given the choice of participating (at 5% plus matching) in a retirement fund or in Social Security, thus giving our elected representatives an easy way to opt-out of Social Security. So ask yourself: If they don't have to participate, why should we? (By the way, although I hold elected office, the stipend I receive for my service is subjected to Social Security.)
It was generally agreed that real income tax reform, whether switching to a flat tax rate or replacing the income tax with a Federal sales tax is a much tougher sell in the current Congress. They may be right, and we should focus on one such battle at a time.
I think there is something to be said to pick the battles you will be best able to win, find a winning position on those issues, and push them forward. Therefore, I believe that Social Security reform is the more important issue to get through the current Congress, and it is certainly a battle that can be won.
Now some pics.
So far, the Townhall Meetup group as had some fairly lively discussions, and is going fairly strong, with ten core members that make most of the events. If you haven't been to one, check it out at Townhall Meetup
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