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In 1773, the British government adopted the Tea Act, which allowed the East India Company to sell tea to the colonies duty-free. The purpose was to give the East India Company a monopoly by enabling it to undercut the prices of the tea sold by colonial merchants.
On Dec. 16, 1773, the Sons of Liberty, led by Samuel Adams, disguised themselves as American Indians, marched into Griffin's Wharf and boarded the Dartmouth, the Beaver and the Eleanor. Working through the night, they dumped 45 tons of tea worth more than an estimated $1.5 million (in 2009 currency) into Boston Harbor.
Today, as then, Americans' animosity toward the behavior of its government is running high. Republicans and Democrats in Washington are bent on plunging Americans deep into debt, endless deficits and intolerable taxation by lavishing irresponsible corporations with obscenely generous amounts of "bailout" and "stimulus" money.
Recently, CNBC's Rick Santelli -- a modern-day Sam Adams -- issued a clarion call for a "taxpayer tea party."
Citizens have and are answering his call. To date, two dozen tea parties have been held around the country.
Central Pennsylvania residents can make their voice heard at the Harrisburg Tea Party, which will be held from noon to 1 p.m. Saturday on the state Capitol steps (Third Street entrance). The event will be emceed by talk radio host R.J. Harris of WHP 580 AM. Bring your own tea and signs!
Are you making your voice heard?
Matthew J. Brouillette is president and chief executive officer of the Commonwealth Foundation. For more about Brouillette, click here.
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It's one of the most widely promulgated myths, not only on Pennsylvania's campaign trail, but even in the public policy arena: Once upon a time, state government funded 50 percent of the cost of public K-12 education in the commonwealth.
Of course, it's understandable that so many people believe the myth when no less of a pol than Gov. Rendell -- not to mention the Public School Boards Association (ostensibly the authority on all matters related to public education in Pennsylvania) utters it as the Gospel.
The truth is this: The state share of public education has never been 50 percent. Until 1983, a law was in place compelling the state to fund 50 percent of public education costs. But, in reality, it never did. The reason? School districts continually increased their spending, making it mathematically and fiscally very difficult for the state to keep up with the 50 percent benchmark.
State funding has, in fact, increased steadily and generously in recent years. But the state's share measured as a percentage of overall education funding has slipped because of runaway spending at the local level. Under Rendell, state K-12 subsidies (excluding the gambling money for property tax relief) increased 33 percent through last year, but local revenues increased 45 percent. Since 1983, state spending has increased 286 percent (79 percent after adjusting for inflation), but has been surpassed by local spending, which increased by 347 percent (109 percent in inflation-adjusted dollars).
Setting a goal of 50 percent state funding without any controls on local spending growth is a perverse incentive. It encourages districts to dramatically increase spending to get even more from the state. If the state was to set a policy of paying half of poor peoples' rent, with no limitation on the size of the domicile, poor people would simply get much bigger apartments!
The only way to get to a state share of 50 percent of funding would be to limit local spending and taxes. We could achieve "funding equity" right now, if we cut local property taxes by 25 percent or so.
Do you think spending by school districts is out of control?
Matthew J. Brouillette is president and chief executive officer of the Commonwealth Foundation. For more about Brouillette, click here.
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In the 1980s Americans were paranoid the Japanese would own America.
It was a sobering commentary to think our cars and steel could be made by a country we defeated in World War II. Somehow we managed a reversal of fortunes: Mickey Mouse and McDonald's rule Japan and Rockefeller Center speaks English.
By 2003, "Tokyo's main Nikkei stock index had lost almost three-quarters of its value. The country's public debt had grown to exceed its gross domestic product, and deflation stalked the land. In the end, real estate prices fell for 15 consecutive years."
Our national self-esteem was bubbling over with the collapse of the Soviet Union. We were the winners. Americans spent a decade basking in triumphalism and ignoring economic fundamentals. Millionaires lived on every corner, national debt was erased, and American computers were set to rule the world.
Now America appears to be bankrupt. Nothing seems to work. And bailouts have become a corporate right.
Can we escape our economic malaise by turning Japanese? Should we mimic the Japanese response to their "lost decade?"
The Japanese went down the bailout road, stimulated half-hearted measures, spread low-interest money around, and consumed nothing. Japan still is dependent on the outside world for economic oxygen.
"Only in 2003 did the [Japanese] government finally take the actions that helped lead to a recovery: forcing major banks to submit to merciless audits and declare bad debts; spending 2 trillion yen to effectively nationalize a major bank, wiping out its shareholders; and allowing weaker banks to fail."
America can learn from the Japanese, but we also must refrain from embracing magic bullets. The Japanese economy is still sick, a shadow of its former economic self, and its exports continue to plunge.
The Japanese savings culture is legendary and an important lesson for us. In 1982 Americans saved 10 cents for every dollar they earned. Today we spend $2 for every dollar we make thanks to credit cards and home equity loans.
We are in a consumer recession likely to last 24 months. The Japanese model proved you can't save your way to prosperity. Here's the rub: Yes, we're a consumer culture, but we need to consume within our means. We can't continue to view plastic as one of the main food groups.
We also need to create. We are an entrepreneurial society, and we need to find new ways to solve problems.
But we need to know the rules of engagement. Strong corporate governance, honest accounting and realistic return expectations must replace crony capitalism's old order where everything goes and nobody knows.
Doing nothing or assuming Uncle Sam will tuck you in at night are not viable options. For free enterprise to succeed, it has to have the opportunity to fail.
Eric Epstein is a watchdog and advocate for consumers, good government and safe energy. For more about Epstein, click here.
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On July 4, the Pennsylvania General Assembly approved -- and Gov. Ed Rendell signed -- a $28.3 billion General Fund Budget. Since then, a $2.3 billion revenue shortfall has emerged and politicians are scrambling to fill the budget gap. The cause of this budget deficit should be obvious: Overspending by state government.
The state General Fund Budget comprises less than half of the $61.2 billion operating budget, and Pennsylvania local governments are spending nearly the equivalent of state government ($61 billion).
Here are some facts about the growth in government spending:
Families are paying substantially more of their income to fund government:
For more facts about Pennsylvania's spending, visit PleaseNoMoreTaxes.org.
Do you think your state and local government are spending enough?
Matthew J. Brouillette is president and chief executive officer of the Commonwealth Foundation. For more about Brouillette, click here.
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