JB: Senator DeMint, your book is coming out on Independence Day. It’s a very intense approach to what’s going on in America now. Why this book? Why now?
JD: Well, Newt Gingrich calls it the new Declaration of Independence because it’s designed to help people see that the direction we’re going now as a country and the direction we need to go to restore our strength and prosperity. The book is about freedom and how it works…and what are the foundations of freedom. And points out that so many things we’re doing are opposed to those founding principles and it gives people a way to get engaged and to help us change.
JB: Before we get into the book itself, let’s talk about a couple of hot issues. First, health care represents about 16% of our economy. The Democrats are in the process of nationalizing it, and are apparently going to ask employers to absorb a lot of the cost. How will Americans see this reflected in their health care in the future?
JD: There are real problems with our health care system, but they are caused by government manipulation not by the freedom of Americans to buy private health insurance they control. Government already controls 50% of the health industry with Medicare, Medicaid, SCHIP and other programs but pay doctors and hospitals less than the full value of their services, and Americans with private plans are forced to pay the difference in higher premiums. Washington gives health tax breaks to businesses, but nothing to individuals who try to buy their own plan. Washington has banned Americans from buying health care across state lines, which limits competition and drives up prices. Why would we want to solve a problem that government created with more government? Do Americans really want their doctor's office and hospital to be run like the post office and DMV? The way to fix this is to increase freedom and choice for Americans and level the playing field for those who don't have employer-based coverage.
JB: The stimulus package isn’t apparently stimulating anything but the government. Now the president is promising (or, if you’d like, threatening) to increase the pace of expenditure. How soon will we see an inflationary impact, and how bad might it be?
JD: Washington's inability to impose any kind of fiscal responsibility and our incredibly high national debt is a real crisis for our nation. We simply can't keep borrowing from China and spending at these unheard of levels and expect to keep our nation stable and secure. This will inevitably lead to high inflation, high interest rates and high taxes. It’s a recipe for economic disaster and the only way to stop it is to stop the spending. We became an economic superpower by allowing Americans to keep and invest their own money in an innovative free market, and that's the only way we'll get back onto sound economic footing. Centralized command and control of economies never work, and we're learning that painful lesson right now.
JB: The book starts out with some pretty strong words. You say that though few in Congress would call themselves socialists, that’s the direction themselves socialist, that’s the direction that they seem to be going. Is that a fair characterization? Is socialism being established in America now or is it socialism-lite or something else?
JD: Well we really are moving toward a social democracy. Define socialism as a government controlling aspects of the economy. Most members of Congress think that just about every aspect of American society and economy should be regulated, controlled, taxed in some way by the federal government and increasingly so. I think it’s very fair to say that most members of Congress lean socialist on policies. We come up with the problem that we want to solve…most members of Congress will approach it in a government-centric way. We’re doing it with energy, we’re doing it with healthcare, everything is “what does the government do?” rather than “how do we make the private sector work better?” So, yeah, I think it’s fair to say that even though we have not nationalized anything at this point other than General Motors and Chrysler, AIG and financial markets, we are headed in a very socialist direction.
JB: One of the reasons that appeals to us as an explanation, and I think you hit very strongly, in a way that is going to resonate with a lot of Americans, in one passage of the book you talk about how Americans appear to be balkanized not along racial or religious lines but between those who are paying taxes and those who aren’t. Is that really where we are? Are we balkanized along those lines and if so how do we fix that?
JD: Yeah, I regret to say that there are two Americas but not the kind John Edwards was talking about. It’s not so much the haves and the have-nots. It’s those who are paying for government and those who are getting government. At this point, the data I’ve seen is 52% of Americans get their income directly or indirectly from a government source. And if you think about how that works in a democracy, why would the voters be concerned about the growth of government if they weren’t paying and they were getting something from it.
Democracy cannot work when you have a majority of people dependent on the government.
And this is not just the poor. The way we’ve set up Social Security and Medicare, everyone who retires are dependent, parents are dependent on the government for education of their children and now, if you look at the folks who come through my office -- business people, farmers, bankers -- everybody is coming to Washington to get their piece of the government because we’re running all this money through here now. So we do have a challenge to the whole democratic system because of our very progressive tax code, because of our dependency programs that we’ve established.
JB: One of the things you hit on hardest is the means by which the automobile makers being taken over, effectively, by the government. You resisted that strongly when it happened and you point some fingers as to why it became necessary.
In one part of the book you’re talking about how some of the lenders and the companies were willing to budge and, quite frankly, the unions weren’t. Is this problem with the unions being unwilling to budge something there’s a path out of? Is there a way to do that right now or a way to do it soon? Because it seems to me we’re getting farther down that road with the unions basically having control.
JD: Unions are the most powerful lobby in Washington. They control our education system and even though they’re a declining number…there’s a declining number of union in the private sector, the public sector is growing, they’re heavily unionized, particularly at the federal level. And most of the decisions now that are coming out of Congress have something in it that benefits unions.
In some of the states like Michigan where there’s essentially forced unionization, we’ve seen what that does. It basically runs manufacturing out of business: offshore or to the south. They want to take that same concept and force it all around the country. And there’s this sick partnership between the Democrats and the unions. The more unions expand, the more votes and money and grassroots support the Democrats get. The more Democrats are in office, the more they try to force unionization.
And one of the things I mention in the book, which I believe is true, is the reason that so many Democrats were for this big amnesty bill a couple of years ago is that they were really salivating over 10 million illegal aliens suddenly becoming citizens and voters. And members of service unions- farm unions, construction unions-that’s why they won’t support what most immigrants want, what most Americans want, is a temporary worker program.
Temporary workers don’t vote and they generally don’t join unions. So it is disgraceful- I can’t overstate that- it is disgraceful that they have set aside the interest of our country for this political partnership between unions and the Democrat Party. We need to expose that other good people who are voting for Democrats because they think they’re helping the poor or something need to see that the Democrat Party is first of all a government of big party [corrects himself]…the party of big government and socialism. They are the party that is in bed with unions and trial lawyers.
JB: Back in May, one of the proposals we heard- and I guess it was being done- is to take some of the bailout money and General Motors was going to use that to pay off early buyouts for union workers to the tune of 100 and some-odd thousand dollars per person. Now, I think a lot of Americans are sitting back and saying “my tax money is going to buy out the union worker at a failed company, and I really don’t have that much in my own retirement plan”. This sounds to me like we’re reaching some sort of a breaking point for the American taxpayer.
JD: If Americans began to understand what’s really happening, those people who’ve been working, and maybe working for less, with less benefits because their companies were not leveraged to be held by a union, but now that the union has run their companies out of business, that these other people are going to have to help pay for it. It makes no sense. What we needed to do is let these companies go into real bankruptcy where they can throw those union contracts out the window. That’s why I don’t- for the life of me- I don’t know why President Bush did not get that. What would have done more to put unions in line where they needed to be is if we essentially allowed General Motors and Chrysler to go through a real bankruptcy. They’d probably already be coming out of it at this point and they could get some real capital from outside but no one is going to invest in a company the government owns part of.
So, I just think, we’ve had…to hear President Bush say something like “we’re going to suspend the principles of free market in order to save the free market” just…just showed me clearly that even he didn’t did not understand what…what we should be doing. And I’m afraid he had some very bad advice from [then-Secretary of the Treasury Hank] Paulson.
JB: I think I may be a couple years older than you but when I heard that remembered the Vietnam comment about “We had to destroy the village in order to save it”.
JD: Yeah…once you throw out your principle in order to save your principle, you’re lost.
JB: The next question is really what are the Republicans doing to take care of this issue?
Senator, a lot of people are wondering is…the Republicans have taken some strong stands on this but since President Bush did really start the automobile bailouts, what do you think the Republicans can do, should do, are doing to stop things like this buyout of automobile workers with taxpayer money?
JD: The Republicans are not as well-organized as I would like them to be to fight this. I’ve had several amendments in the last week that would have prohibited the government from converting TARP money into common stock, trying to do several things to at least get the Democrats on record. We got most of the Republicans to vote for that, but there were a few who didn’t. That makes it harder for us. But we’ve really got to get ourselves organized to fight, not just the bailout money and the takeover of General Motors but how do we stop the nationalization of healthcare, which is right on the cliff? How do we stop the takeover of the whole electricity grid with “cap and trade”? This is something that they’re talking about, which is an electricity tax. And Republicans are coming together to fight that and to present some plausible alternatives. But we’re going to have to do a whole lot better of a job than we have over the last few years.
JB: The important part of your book- well a lot of it is important- but to me the most important is the plan to save freedom, as you propose at the end. One of the things that strikes me- and I think I’ve seen this chart before, and I think you cite it from the Office of Management and Budget- there’s a chart that shows how, historically, the government has spent roughly 20% of the gross domestic product. And now, under the current policy, we’re looking, you know, 20, 30 years down the road and it’s going to reach 80%, 100% and at some point we are not going to be able to sustain this. Where are we and how can the Republicans bring this back down to reality?
JD: Well it’s amazing we’re not talking about this chart because for years- ten years I’ve been in Congress- every year you hear “well if the government spends much more than 20% of GDP, even we get up to 21, 22%, but we generally see an economic decline”. So to suggest that it’s not a problem to go 30, 40, 50, 60, all the way up to 80%- and that’s under things we’ve already committed to- I mean I’m not expanding spending in the future. This is what we’ve already committed to. The whole point of the chart is that it just won’t work. There’s no foreseeable way it would work. But the good news on that chart at the end of the book is there’s a line that goes much flatter. If we adopt some policies- and I talk about Congressman Paul Ryan’s Roadmap to the Future, where he reforms Social Security, Medicare, all of the health care, the tax code- in a way that doesn’t take anything from people, actually gives them more choices. But it cuts the level of spending over time to help us bring it back towards that 20%. So this is within reach but only if we do it relatively quickly.
JB: Senator, many thanks for your time and best of luck with the book.