From New Deal to Bad Deal: Government as the Fourth Bubble

The next few days offer an appropriate time to reassess government as something we, in effect, purchase through our taxes.

April 15th is an obvious date because it is the annual day when income taxes are due.

April 18th is equally important because it will be the 235th anniversary of American militia firing “the shot heard round the world” when they stood up to British professional soldiers at Concord and Lexington and drove them back into Boston.

On April 18, 1775, Americans began what would turn into an 8-year conflict with the most powerful empire in the world. The arrogance and high handedness of the British bureaucrats and judges had finally driven the Americans to stand and fight for their liberty. (New Hampshire’s state slogan, “Live Free or Die” comes from this experience).

The Americans’ biggest demand was “no taxation without representation.” Their second biggest demand was to curb the power of arrogant imperial judges.

The American Revolution, the Declaration of Independence and the Constitution, which grew out of that experience, give each of us the right to question those to whom we loan power and to assess how they are spending our money and whether they really represent us.

What Do Americans Get For Their Tax Dollars?

Over the last 78 years, Americans have gone from getting a New Deal to a Bad Deal from government.

Many conservatives, including Amity Shlaes in The Forgotten Man and Burt and Anita Folsom Monday in the Wall Street Journal, have shown how the New Deal was never a good deal for America, even if it was popular at the time.

Today, however, the vast majority of Americans recognize that government is too expensive and too ineffective.

This transition to a bad deal is not just at the federal level and in many ways has nothing to do with President Obama or his administration.

We have been in a long cycle of government employee unions, bureaucracies, and politicians building systems that are more and more expensive, more and more inflexible and more and more incapable of meeting the challenges of the modern world. This process has affected Europe and Japan as well as America.

Its final, collapsing phase is being signaled by the Greek debt crisis, the Japanese 21 year cycle of deflation and slow growth and the financial crises in many of our state capitals, of which Sacramento and Albany are the biggest examples.

The Obama-Pelosi-Reid Secular-Socialist Machine is making the bubble problem bigger and more dangerous, but this is simply the last phase of a long process of unionization, bureaucratization and steadily rising costs of government.

Government as the Fourth Bubble

Today government has become the fourth recent bubble.

The first three bubbles were information technology in 1999, housing in 2007 and Wall Street in 2008.

Looking back everyone wonders why we didn’t see those three bubbles coming.

The failure to anticipate them and to take appropriate, corrective steps before it was too late has caused enormous pain in the American economy and for the American people.

This fourth bubble is even bigger and more dangerous. If we don’t get state, federal and local spending under control we will have a wave of crises that will shatter our economy with higher interest rates and a series of state and local defaults.

The federal government will be pushed into inflation (printing paper to get rid of the debt by devaluing it and cheating every person holding American assets), draconian spending cuts or draconian taxes.

I am totally opposed to higher taxes. Higher taxes will crush the American economy and guarantee that China and India will be the dominant economies by 2050.

It is no accident that Jaguar is now an Indian company and Volvo is becoming a Chinese company.

The Western democracies (and Japan) have been steadily strangling themselves with more and more government, more and more red tape, higher and higher taxes.

The drumbeat has begun to force even higher taxes on Americans. The political class refuses to solve the government’s spending problem and prefers to take the money away from citizens.

Yet that is exactly the wrong answer.

When we balanced the budget in the 1990s, we did it with strong controls on spending, real reform of welfare and Medicare, and tax cuts to increase economic growth.

The work we are doing at American Solutions and the Center for Health Transformation seeks solutions which allow us to bring spending under control and reduce the debt before there is a crisis.

This week, every citizen should begin to demand that our elected officials begin downsizing government and reducing the bubble before the crisis occurs.

Every citizen should demand that new contracts with the government employee unions increase flexibility, adaptability and efficiency and reduce the cost of government.

Every citizen should insist that government take steps to eliminate corruption, fraud and theft (which accounts well over $100 billion a year in federal spending alone).

There is no better time to demand action from our elected officials than the week taxes come due.

A Very Exciting Premiere

We had a wonderful premiere of our new movie Nine Days that Changed the World on Friday night at Mount Vernon. Everyone loved the film and felt it was a powerful tribute to Pope John Paul II and his extraordinary nine day pilgrimage to Poland in June, 1979.

Photography: Doug DeMark Photography

We have upcoming showings at Ave Maria Law School in Naples, Florida, Georgetown University, and The John Paul II Center in Washington, DC.

In June we will be showing Nine Days that Changed the World in Warsaw and Krakow, Poland and in Rome at the Pontifical North American College.

To watch the trailer and learn more about Nine Days that Changed the World, go to

Your friend,


Sadly, the morning after Friday night’s premiere we awoke to the tragic news that a plane crash had claimed the lives of the President of Poland Lech Kaczynski and 95 other leading citizens of Poland. They were travelling to Katyn, Russia, to take part in ceremonies organized by the Russian government honoring the 21,768 Polish officers murdered by the Soviet Union seventy years ago during World War II.

Callista and I mourn the loss of so many dear Polish lives. We especially remember Anna Walentynowicz and Wladyslaw Stasiak, both of whom appear in Nine Days that Changed the World.

One year ago in Warsaw, we had the privilege to meet Mr. Stasiak and his wife. In his role as chief of staff to the Polish President, Mr. Stasiak was deeply committed to working for the common good. A great friend of the United States, Mr. Stasiak’s professionalism, wisdom, and courage in the service of Poland will serve as an example for all those who serve in government.

We also remember Anna Walentynowicz, whose extraordinary moral courage in the face of tyranny during the Gdansk shipyard strike of August 1980 changed the course of history and helped liberate her country from a Communist dictatorship.

Anna Walentynowicz was the moral force behind the Solidarity free trade union movement in Poland in the 1980s. Her commitment to her fellow workers began in the 1970s when she demanded that one of her shipyard bosses be held accountable for the money he had stolen from workers to use for gambling.

But it was the Gdansk shipyard strikes of August 1980 that brought Anna Walentynowicz to the attention of the world. Unjustly fired by her Communist boss seven months before she was due to retire, the workers rallied behind Anna and went on strike demanding that she be reinstated.

After three days, the Gdansk shipyard strike initially ended once the Communist bosses agreed with a strike committee to reinstate Anna and to increase the shipyard workers’ monthly pay. The workers started to leave the strike at the factory and go home.

But Anna understood that the strikes had already spread to hundreds of factories and that the worker demands in Poland were far broader than her own job or higher pay. She also knew that if the Gdansk workers stopped their strike, they would be abandoning the cause of other striking workers.

So Anna Walentynowicz ran to the shipyard gate and began to exhort her fellow workers that they needed to remain on strike in solidarity with the striking workers at other factories. She succeeded at turning the tide. The strike survived. Ever since that time Anna Walentynowicz had been an outspoken defender of the dignity of workers and the truth about Polish history.

Throughout its history, Poland has struggled on behalf of freedom-loving peoples everywhere. In every generation, leaders rise in Poland like Anna Walentynowicz, Lech Kaczynski, and Wladyslaw Stasiak who are willing to endure hardship and make sacrifices in defense of the dignity of man and for the cause of human liberty. The words “For your freedom and ours” truly define Poland’s contribution to the world, as it does the contributions of all the Poles tragically killed last Saturday.

May they rest in peace.

Newt’s Quick Links:

• I invite you to The Americano’s First Annual Hispanic Forum which will be held in Washington, D.C., this December. Join top Hispanic leaders from across the globe in a very important discussion about American Liberty. Space will be limited. Join now.

• How will Obamacare affect you? American businesses? And how many more federally controlled, bureaucratic boards and agencies will be created under this law? The Center for Health Transformation reports 159. To get the latest happenings and updates on the healthcare law, join the Center for Health Transformation. Sign up for “News You Can Use” today by clicking here.

• Callista and I were excited to learn that Rediscovering God in America II: Our Heritage won best feature length documentary at the Garden State Film Festival. Learn more here.

• David Barton, president and founder of Wallbuilders is a founding board member of Renewing American Leadership. He recently appeared on the Glenn Beck show, talking about how America was founded on a freedom-through-faith movement. You can watch highlights here.