The document discusses the unsustainable level of federal debt being passed on to future generations due to entitlement programs like Social Security and Medicare. It argues that the existing political system, made up of both Republican and Democratic parties (called "Repocrats"), has grown the size of government far beyond its legitimate role and made promises that cannot be kept without burdening American children with crippling debt. The Liberty Party USA aims to simplify taxes, reduce the size and scope of the federal government and entitlement programs, and ensure spending is in line with tax revenues to preserve freedom for future generations.

1. LIBERTY PARTY USA: ENSURING FREEDOM
FOR FUTURE GENERATIONS
In January of 2008, the first Baby Boomers are eligible for Social Security benefits, to
be followed by Medicare in 2011. By 2020, the drain on Social Security and Medicare funds
will enter peak years. Our citizens have been misinformed by the present political leadership
regarding both the present and future size of our debts. Due to the federal “entitlement”
system created over the past 75 years, the bills for those benefits and many other federal costs
are being passed to our children. These present benefits are an illegal and immoral transfer
from the future that will impoverish rising generations.1 These entitlements and the other bills
for our massively oversized federal government will condemn the next generation to a sinking
standard of living and overwhelming debt, resulting in the loss of the very freedoms this
nation was created to protect. Unfortunately, the existing political class is unwilling or unable
to make the hard decisions that could avert the pending destruction and preserve our country.
It has become impossible to even begin to address this complex problem in the current
political environment in Washington. The country’s current political leadership is unable to
make radical changes necessary to avert overwhelming indebtedness because they subscribe
to and benefit from the philosophy that has created the problem. The relationships among and
within the present political class are destroying our ability to pursue our happiness. The ruling
political class in Washington must go.
We the citizens of America have the duty to make radical changes in the way the federal
government operates to make it perform its proper mission for the sake of our children and all
future generations. The responsibility to make these changes is assigned to the people by the
Declaration of Independence. It is time to exercise that power.
As currently projected, the federal debt caused by the “entitlements” and other existing
federal programs will rise from $120,000 for each family of four in 2007 to over $600,000 in
less than three decades (and inflation will be added on top of that). As the debt increases, our
standard of living will decline. The impoverished younger generations will be unable to pay.
The $53 trillion “mortgage” for a “house” they do not own will create a state of indentured
servitude for future working Americans, in violation of the 13th Amendment to the
Constitution.
Indentured servitude? Most new residents of the American colonies were indentured
servants. They entered into a voluntary contract to work for a set time period and then move
on to freedom with a small parcel of land. The younger generations of Americans have signed
no such contracts obligating them to pay for the older generations’ benefits. Yet the federal
debt sentences them to the status of indentured servants with no prospect for freedom unless
we change the political system that is bankrupting them.
1 Jefferson and Washington clearly stated that each generation is morally obligated to pay the debts it generated
(major war costs excepted) before it passes from the scene.

2. America was created in a revolution to release people from bondage under the control of
a central government. The nation’s political parties (the Repocrats2) have turned this concept
upside down over the past century. Our present class of politicians has made unsustainable
political promises to satisfy their lust for power and literally stolen the country from the
citizens for their own benefit and the benefit of their supporters, fighting among themselves
for room at the public trough. The Repocrats think the citizens work for them rather than
recognizing that we hire them to do the very few specific tasks we need the federal
government to perform. The money taken by force (do not pay your taxes and an armed
officer will be on your doorstep!) from Americans’ paychecks over the last 75 years is not
only unreasonably large but has been spent far too often on the priorities of politicians serving
special interests and to further their own agendas. These funds were obtained from repeated
increases in taxation and by borrowing from the future. The money taken from citizens was
not invested in productive activities that yield returns to be applied to the “general welfare” of
the citizens, as called for in the Constitution. It was used to enrich the present political class
and certain special interests at the expense of the citizens.
The Repocrats have now become so crazed in their immoral exercise of power that they
name institutions after themselves as if they were royalty (see the Charles B. Rangel (D-NY)
Center for Public Service and the Thad Cochran (R-MS) Research Center, among over 11,000
examples of grotesque irresponsibility (“earmarks”) in the 2008 budget bills). This must
cease! A couple of centuries ago, Americans fought a Revolution over taxes and abuse of
power to stop this kind of absurd lien. Yet today we merely pass the problem to the younger
generation, America’s children. Left unrestrained, the Repocrats will continue to run
roughshod over the citizens and leave bankruptcy as a legacy to our posterity!
The Repocrats do not focus on these issues when they talk to the voters, for obvious
reasons. They are apparently incapable of recognizing there is in fact no “trust fund” for any
of the entitlements or other federal spending, only IOUs that must be paid for out of future
annual tax revenues imposed on the wages of working Americans and the investments of
retired Americans. Some argue that “we owe it to ourselves.” They are wrong. The
generations in power have no right to encumber America’s children with the cost of their own
current benefits. The younger generations will be unable to pay the interest and principal on
the rising debt, and they are different individuals from those who benefit from the current
massive wealth transfers and other irresponsible federal spending. Yet the Millennial
Generation will be forced to bear the expense tomorrow while the older generations consume
the benefits today. This pyramid scheme must cease. The generations in power must take
financial responsibility for what they consume and not pass the bill to the children.
The Repocrats have saddled the nation with a huge “negative amortization mortgage”
(rising federal debts), owed by future generations of workers. This is exactly the same kind of
2 The existing political power structure includes members of the Republican and Democratic Parties and [a very
few] independent elected officials. To make it easy to refer to the current political class as a whole, we reach
back to the original Greek (demos and kratien) and Latin (res publica) and simplify the long result to
“Repocrats”. The mnemonic devices for this word are simple: having your car or house repossessed in the one
case, and creating enormous numbers of bureaucrats to address every imaginable special interest in the other.
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3. problem the “inside the Beltway” crowd is loudly criticizing mortgage lenders for allegedly
bringing about in the housing sector. But these politicians are committing this outrageous
fraud against the future of the entire country without the population’s understanding or
agreement. This hypocrisy must stop!
The phrase “moral hazard” has been mentioned quite often during the current mortgage
meltdown. Technically, a moral hazard is created when an individual believes someone else
will pay the cost if some action creates a negative outcome. The concept of risk management
is obviously key to solving this problem. We voluntarily enter relationships to insure against
the risk of trouble (e.g., auto and fire policies), but we fully understand that we should not
then go out and wreck our car or burn our house down because we still bear costs for our
actions.
The federal government’s intrusion into many areas where it has no legitimate business
has created a perfect storm of moral hazards. The U.S. has become a society in which
everyone appears convinced almost nothing is their responsibility, but virtually every problem
belongs to the federal government. Massively increasing costs of health care and education
and a string of disasters created by federal flood insurance subsidies are clear examples of
burdens created by unwise federal involvement financed at the cost of future generations in
the false believe that they make society better off. In all of these cases, the federal government
has aggrandized power from the states and the people and inserted itself in areas where it has
no legitimate function to perform. The fact is that government involvement is the cause of the
problem, not the solution. Now virtually every real or imagined problem appears to demand a
federal solution rather than having the people and governments with direct knowledge of what
is happening take responsibility for their actions. Meanwhile, the Repocrats search wildly for
someone to blame for problems they have caused (“bad mortgage brokers”).
In an area currently on the front pages, the Repocrats in Congress and the White House
called for the expansion of mortgage lending into extremely risky areas and ensured the
government sponsored enterprises lowered their credit standards (100% financing made
possible by Fannie Mae in their $2 trillion dollar “American Dream Commitment” in 2000) to
get inappropriate loans made. Under the “National Minority Homeownership Initiative” and
related initiatives regarding first time borrowers, Fannie reported lending “$1.3 trillion for
nearly 12 million targeted families” with an average 3% down payment requirement. Fannie
further reported they “completed two-thirds of the American Dream Commitment in about
30% of the time.” The moral hazard from this irresponsible government lending far exceeds
that of foolish private lenders. The horrible results of this federal intrusion into private
decisions on how and where to live are generating calls for further federal bailout action at the
cost of increased debt to be paid by future generations. We are misleading ourselves if we
think the fault lies with unscrupulous lenders, who have always been working at the fringes of
legitimate business. The federal government’s inappropriate interference created the problem,
and cannot provide the solution. Citizens are being asked to pay for creating the problem as
well as trying to “solve” it with bailouts that will once again be shipped to the future. This
kind of “collective irresponsibility” is pushing America over the brink. Young America
cannot afford the future bills from “help” like this!
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4. Keeping the harsh economic reality of the upcoming federal debt out of the view of the
voters, the federal government produces reports on the financial condition of the nation that
systematically violate the basic accrual accounting rules for future liabilities that we apply to
individuals and businesses. Our government reports to us only those expenses they pay in
each year and covers up the growing bill for future expenses. The citizens are not provided
accurate and complete reports on the government’s financial condition on a regular basis!
Although the Repocrats sanitize their financial reporting through the Office of Management
and Budget and the Congressional Budget Office, the reporting is not in accord with
accounting rules we must abide by. Somehow only the Comptroller of the Currency seems to
get it. The present political discourse inside the Beltway is based on an erroneous
understanding of our nation’s precarious financial position and has placed the country at the
tipping point. Traversing the tipping point will make Americans powerless over their destiny.
Unless we take action now, we will be able only to react helplessly during the unraveling
brought on by massively increasing future indebtedness and repeated rounds of more severe
devaluation of the U.S. currency.
The Repocrats are unable and unwilling to restore financial integrity and preserve liberty,
due to the “promise them anything” philosophy that they have used to gain power. The costs
of the massive expansion of inefficient and ineffective federal intrusion into our lives by the
Repocrats since WWII are creating dire consequences for all future Americans. Government
cannot deliver what has been promised and the financial weight of government is taking us
under. Fifty years ago, we had a large and increasing middle class, virtually no debt except
from WWII, and a government that worked for the people. Looking ahead, the next
generations will be unable to afford their existence.
Good news! There is nothing in our Constitution that requires us to rely on two
political parties that are both part of the problem, not the solution. The Liberty Party USA is
trying to provide freedom to future generations by having the federal government do exactly
what it was designed to do, and stop performing activities that are the business of the people
and the states, not the federal government. To change our present course and sustain our
liberty will require significant changes.
The key components of the Liberty Party USA platform necessary to reverse America’s
decline are:
1. Revoke the 73 linear feet of indecipherable and contradictory federal tax code in
its entirety and create a new tax return (individual and corporate) which fits on one piece of
paper. Impose a flat, broad based, 15% tax on all incomes (wages, interest, dividends, capital
gains, and profits). This will immediately save up to $300 billion annually that is currently
wasted on professional fees and oversight costs. There are additional billions wasted on
corporate and individual “tax avoidance” strategies, but those costs are effectively
incalculable. This simplification will empower thousands of our brightest and most well
educated citizens to engage in productive activities rather than simply being deadweight costs
for the economy. Most important, the savings will provide the income tax revenue needed to
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5. pay legitimate federal expenses. The new income tax will be accompanied by up to $25,000
(indexed for inflation) in personal exemptions for a family of five, making the effective tax
rate 7.5% for median income families. Liberty Party USA wants the vast majority of
Americans to feel responsible for paying their share for the benefits of living in this incredibly
great country – despite the Repocrats! High income individuals and corporations will pay the
maximum rate. The flat income tax will be supplemented by a consumption tax of 5% on
goods and services, excluding medicine and food for preparation in the home. Finally,
LPUSA will reduce payroll withholding to 10% from the present 15.3% to provide direct
relief to the lower and middle classes. Every working American with annual income up to
$98,500 will retain an additional 5.3% every year to spend as they see fit. This tax system is
an effective revenue generator. The simplicity of the Liberty Party Tax Code will immediately
save hundreds of billions in enforcement and compliance costs. We intend to provide a
simplified, understandable, and manageable tax code that removes incentives to misallocate
resources for tax reasons.
2. We must promptly reduce the size of the Executive Branch to five Cabinet posts
(Defense, Justice, State, Treasury, and Interstate Affairs) to perform the legitimate federal
activities called for in the Constitution, as amended over time. Merge or phase out all other
activities on a three-year glide path. Create enforceable, transparent, and well defined
standards of conduct for these activities to ensure the citizens can determine that they are
performed efficiently and effectively. Reduce the duration and frequency of legislative
Sessions of the Congress to comport with the proper Constitutional role of the federal
government as described herein. Reduce the costs of the Legislative Branch including staff, to
comport with the reduced scope of federal activities. Take the present 11,000 legislative
“earmarks” down to zero. Require all federal spending bills to openly identify the single
element of the Constitution that assigns responsibility for that specific task to the federal
government and takes it away from the states and the people (eliminate “earmarks”). Limit
terms for members of the Congress to 12 years to protect the citizens against a self-perpetuating
political class that promises everything to gain power but never has to deal with
the issues faced by private citizens. Perform a proper calculation of the federal balance sheet
and income statement in accordance with generally accepted (accrual) accounting principles
(GAAP). Presently the government does not count expenses that they run up and do not pay.
This kind of accounting dupes the citizenry into tolerating yet more expenses. Counting the
real federal obligations and expenses will show a total federal liability of approximately $53
trillion by 2030 (with a 7% interest rate assumption).
3. Adjust federal entitlement expenditures to match accurately measured tax
revenues and expenses. Cease all federal involvement in Medicaid immediately and leave
such care to the discretion of the states and the people (9th and 10th Amendments). Empower
the patient doctor transaction by reducing our reliance on the present third party payer system.
This money will be promptly returned to working citizens in every paycheck by their FICA
reduction of 5.3%. Remove the federal government from the medical care business and reduce
the cost of medical care by over 50%. Federal Medicaid payments will cease within three
years and those funds will be returned to the working poor in a direct reduction of FICA
payments from 15.3% to 10%. When individuals are enabled to re-establish their relationships
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6. directly with the doctor, they will discover it’s measurably better then the current third party
payer system. The other 50-plus means-tested subsidy programs (grants from the federal
government to special interest groups) will be phased out over three years. These measures
will prove to be a bigger deterrent to illegal immigration then any possible “wall’ would be.
Finally, save Social Security by substantial reform. Because millions of people have made
inappropriate decisions relying on misleading federal promises, Medicare will be frozen at
2008 dollar levels and begin to phase out over 10 years. Social Security will become what it
was originally intended to be: forced savings for later years. Individual retirement funding is
clearly not a federal task, but past promises have led people to make foolish choices. There
will be a glide path for bringing workers’ contributions into their ownership (with appropriate
fiduciary constraints) rather than having them expended for the Repocrats’ political gain. The
federal Thrift Savings program will serve as a model for initial discussions.
4. Once we the people have acted to gain tax relief, put the federal government
into an appropriate role, and control entitlement costs, then and only then can we begin to pay
down the $9.1 trillion federal debt (as of October 2007) while the Baby Boom generation is
still working. The annual interest cost of over $420 billion on the existing debt is obviously
difficult for the real economy to absorb. But the Repocrats are adding to the debt at the rate of
$600 billion per year (in fiscal years 2005-2007) even as revenues increase rapidly. A
“mortgage payment” on the current debt (at 5%) for 30 years would be $586 billion annually.
If we wait to start paying it off until 2011, the first year that the Boomer generation reaches 65
and is eligible for Medicare, the mortgage (at 7%) reaches $917.7 billion annually or $76.5
billion a month. During fiscal 2007 the federal government collected tax revenue of $2.6
trillion! A fourth consecutive year of over 10% increases in taxes collected. Even given this
positive development the Federal debt has increased from $7.9 trillion in 2005 to $8.5 trillion
in 2006 and $9.1 trillion in 2007. Extending these increases the 2011 debt financing would
take 35% of all federal taxes annually. Wait until the debt reaches $53 trillion, and the annual
“mortgage payment” reaches $4.2 trillion per year!
Shortly, LPUSA will supplement these 4 platform planks with others. However,
LPUSA views the above 4 planks as the core beliefs necessary to be acted upon to preserve
our cherished liberties.
Oftentimes, the Repocrats conceal the relationships between their past actions and
current problems. Vernon L. Smith, (a Nobel Laureate in Economics) states; “...thank you
President Bill Clinton for the housing consumption binge and the latest housing bubble . . .
these government driven expenditures on housing consumption are more akin to satisfying
government-subsidized vanity.” (WSJ, Editorial page-Dec.18, 2007).
The recent omnibus spending bill to run the federal government in 2008 and passed by
Congress is a symptom of the enormity of the problem. It contains 8,993 earmarks for special
interests, 90% of which were never voted on by both houses of Congress and therefore are not
even laws (WSJ, Editorial page-Dec. 20, 2007). The Congressional elections a year ago,
which were supposed to address the earmarks problem, have obviously had little affect.
“Congress Oinks it’s Way to a Spending Bill” is the headline of an editorial in The Examiner
(Dec, 18, 2007).
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7. “A democracy will continue to exist up until the time that voters discover they can vote
themselves generous gifts from the public treasury. From that moment on, the majority
always votes for the candidates who promise the most benefits from the public treasury with
the result that every democracy will finally collapse due to loose fiscal policy which is always
followed by dictatorship. . . . through the following sequence:
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1. From bondage to spiritual faith.
2. From spiritual faith to great courage.
3. From courage to liberty.
4. From liberty to abundance.
5. From abundance to complacency.
6. From apathy to dependence.
7. From dependence back into bondage.”
Credited to Alexander Tyler (a Scottish history professor) in 1787, the year we ratified our
Constitution.
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Execute the planks above with energy, honesty, and openness!
Begin the debt reduction process now before the beneficiaries are gone!
Kill the negative amortization mortgage the Repocrats have placed on future generations!
Ensure the dollar remains the world’s reserve currency!
Avoid indentured servitude for working people and future generations!
Stop digging America under!
Almighty God grant us the wisdom to understand and the courage to act to
preserve our liberties. God Bless America. TC