Letter Sent From the Bedford Money Club to all NH state representatives Regarding the Debt Ceiling Debate

The attached letter was sent last week to all NH state representatives in Washington last week.  The Bedford Money Club is a non-partisan, non-profit financial literacy group for women.  This letter is part of a series we plan to send to policy makers.  The next letter will deal with tax reform which we agree is badly needed.
Members of the Bedford Money Club are concerned that without significant efforts to cut the national debt and curb annual federal spending, the country will eventually become financially insolvent like several European countries that were once Superpowers like the USA (e.g. Spain, Italy, etc.).  Brazil, Russia, India, and China are already taking steps to prepare to move away from the U.S. dollar as the world's reserve currency.  Any doubt about our creditworthiness could accelerate this activity.  Loss of reserve currency status would be financially devastating to all Americans. 
We are tired of both political parties using this crisis to further their political aims.  Both parties are equally responsible for contributing to the United States' massive debt.  Both are to blame.  We want them to do their jobs.  We want them to shrink government to reduce the need for new taxes, and reduce waste, fraud, and non-compliance in collecting money owed to the Treasury.  (This includes outstanding taxes, SEC and other agency fines, etc.)  We want American voters to hold policy makers, government employees, and government contractors more accountable for misappropriation of tax dollars.


July 25, 2011

Letter Sent to State Representatives and Senators

RE:  The Debate About Raising The U.S. Debt Ceiling

Dear US Representatives:

This letter is the first in a series that communicates the position of tax paying members of the Bedford, NH Money Club on a number of pressing issues before the U.S. Congress.  The Bedford Money Club is a women’s financial literacy group affiliated with the Women’s Institute for Financial Education (WIFE.org)—the oldest non-profit dedicated to improving the personal financial literacy of women.  The Club eschews politics, but felt compelled to write these letters because we are appalled at how poorly governments are being managed at all levels in this country.  As citizens of a “donor” state that receives $0.71 for every $1.00 we send to Washington, we’re especially unhappy about the current situation.

Our first letter expresses our position on the debate concerning raising the U.S. debt ceiling.  We have been told that raising the U.S. debt ceiling is essential to preserving the AAA credit rating of the United States of America.  Consequently, we support raising the U.S. debt ceiling.  However, our support is contingent upon Congress immediately implementing significant budget and deficit cuts, rather than delaying these cuts until after the 2012 election year. You work for us, and we want to be in a position to fire you in 2012 if you fail to shrink the budget and debt as we have requested.  We do not want our country in this financial position ever again. 

We further explain our rationale in the letter that follows.

Don’t increase our National Debt:  The U.S. Debt Ceiling has been raised 80 times since 1940, and each time, policy makers have failed to take steps to bring spending in line with what the country can afford without becoming enslaved to foreign governments that might use this leverage against our national interests.   Raising the debt ceiling makes it harder for Americans to retain our freedom and control over how our money is to be spent.  Also, we lack confidence that our representatives will follow any increase in the U.S. Debt Ceiling with significant cuts to current and future budgets that would lead to a permanent reduction of this debt.  If you raise the debt ceiling, we want budget and deficit cuts to be made prior to any increase in taxes or tax code reform to offset any increase in the National Debt.  We do not want these cuts deferred or delayed.  We want smaller government now, not ten years from now.

Don’t Jeopardize the AAA Credit Rating of the United States and the U.S. dollar as the world’s Reserve Currency

The impending financial insolvency of several European countries, particularly Spain and Italy, represents a clear and present danger to the survival of the Euro as fiat currency. As soon as the European crisis plays out, the world’s attention will naturally turn to the United States, particularly since other countries use U.S. dollars as their reserve currency in lieu of gold.  These countries will not tolerate much more devaluation of the U.S. dollar because this is inflationary and negatively impacts their reserves.   It also increases their energy costs, as oil is priced in U.S. dollars.  One of our biggest concerns is that the U.S. dollar could lose its “reserve currency” status that would result in a catastrophic loss of purchasing power for every American. 

Other countries are not the only ones harmed by the loose monetary policy of the Federal Reserve. The accelerating devaluation of the U.S. dollar is harming every American citizen, in particular our retired, elderly and poor.  It is jeopardizing American quality of life, and may result in shortages of food, energy, and other imported necessities long-term.   The strategy of the Federal Reserve is clearly not working.  Despite record weakness of the dollar, our trade deficit with China rose 15% last month, and unemployment rose to 9.2%.  We need a more intelligent plan for paying our debt besides printing more money.

Credit is not limitless—even for a country with the stature of the United States. As you read this, our U.S. debt has risen to almost 100% of GDP.   Our debt places the financial health of our country somewhere in between that of Portugal and Spain.  Interest as a percent of GDP may eventually trigger the loss of our AAA credit rating—this will exacerbating the problem as lenders will demand higher interest in exchange for increased risk to lend to us.  Paying interest is a waste of our hard-earned taxpayer money.

Prioritize How Taxpayer Money Is Spent:  Like a credit junkie that needs to improve their ratios in order to obtain more credit we need to put an actionable plan in place that results in rapid progress on shrinking the size of any and all government services that are contributing to the ballooning debt.   There is an urgent need to prioritize government spending in order to maintain essential services (“needs”) and cut non-essential services (“wants”), waste, and fraud. 

One way to approach this would be to refer back to the U.S. Constitution for guidance on why our founding fathers took the decision to form a centralized federal government in the first place.   One of the primary reasons was our common defense, and yet, only 56% of our borders are considered under control today.  This is a national disgrace and evidence of incompetence on the part of those charged by “We the People” with this essential responsibility.  The payments must be prioritized.  If someone is not to be paid, it should be individuals in jobs not directly related to enumerated powers or who have not contributed money to the system (e.g. Social Security, welfare programs, etc.).  Penalties need to be significantly increased for waste and fraud.

Policy makers should pass a law that constrains misappropriation of taxpayer money.  Money that is being collected via tax for a specific purpose, such as Social Security, should be restricted to that purpose and not be spent for some other purpose.   If this had been done all along we could have avoided much of the solvency problems of this and other programs.

Every well managed company has a long-term strategy that all employees understand.  Budgets are allocated to personnel and programs that directly and measurably contribute to achieving the strategy.  Non-contributing personnel and programs are cut in order to improve the company’s health and chances for success.   A similar approach is needed in downsizing the U.S. Federal Government to avoid financial insolvency.  China has a strategy to become the world’s preeminent supplier of alternative energy products (e.g. solar power, LEDs, etc.).  The United States needs a strategy we can rally around and use to prioritize spending, like we did when we sent astronauts to the moon. 

Every day, it seems, evidence of managerial incompetence and wasteful government spending is featured in the national news.  Politicians, government employees, government contractors and others have not been held accountable for this misappropriation of hard-earned taxpayer money.   However, we will be seeking to change this by educating fellow voters and becoming more politically active as individuals away from our Club.  Penalties and consequences (legal and financial) for this perfidy must be increased and enforced.

Too Few Americans (including corporations) Pay Any Tax:  The Democrats claim we have a “revenue” problem.  They are partially right, but are looking in the wrong direction for where these extra tax dollars should be collected.  The U.S. population is roughly 312 million (per the 2010 U.S. Census) of which about 112 million or 35% pay actual taxes (Source:  IRS).  This means more than half the population is benefiting from the productivity of the minority--this is anti-American, unsustainable and unfair.  Furthermore, it has never worked in any country at any time in history.   Americans should know better—one of our earliest governors issued a mandate to the effect that “if you don’t work, you don’t eat.”    Prior to taking this position, everyone in the colony almost died.   Support for the less fortunate should take place through faith-based institutions and charities, as it did in the past, so that more of this money actually benefits the poor and disabled, rather than being absorbed by government bureaucracies, waste, and fraud.  These organizations historically emphasized teaching recipients how to be more responsible and self-sufficient, rather than creating a culture of dependency as governments have done.  Teaching self-sufficiency will reduce the need for welfare for able-bodied members of society over time.

We need the other 65% of Americans to contribute some tax dollars to help solve the problem, not increase taxes on those who are already shouldering their responsibilities.   We need a tax system that incents compliance, increases fairness, and dramatically reduces the time, costs, and loopholes that exist with the current progressive system.

Huge unfunded liabilities ($114 trillion) equate to approximately $1.1 million per tax payer.  (Reforming the tax code to increase the 112 million base of people who actually pay any tax to cover more of the 312 million American citizens, is the subject of our next letter in the series.)  These facts, courtesy of the CBO and IRS, should be enough for even the most financially illiterate American citizen to recognize the problem as very serious.  

In summary:

Taxes collected for specific purposes (e.g. Social Security and Medicare) must not be dispersed on unrelated personnel or programs.  Taxes must be spent for the purpose for which the American taxpayer has been told they would be collected.  They should not be diverted to other programs.

All government personnel should justify their continued employment by providing measurable evidence that they have contributed tangible value to the American taxpayers.  The same should apply to government programs. 

Raising the debt ceiling merely delays the inevitable responsibility to pay our creditors and further jeopardizes our ability to do so by increasing the amount of interest we must pay.  “We the People” want you to do the job we elected you to do:  make the tough decisions about prioritizing and eliminating unnecessary spending (American “wants” versus American “needs”).  Raising the debt ceiling further burdens the minority of Americans who pay taxes.  If you must raise the debt ceiling, we want you to implement budget and deficit cutting immediately and at the same time any tax code changes are implemented.  We do not want cuts deferred until after the next election.  We want to be able to fire you.

Refocus spending on enumerated powers and stop spending on departments and programs that were not part of the original intent of the federal government (e.g. education, welfare, public radio, Planned Parenthood, EPA, etc.).  These programs have been massive failures and money drains.

Privatize as many government services as possible using competitive bidding.  Hold the contractors accountable to the contracts they signed, and punish them if they deliver over budget or behind schedule like well managed companies. If people want services, let them pay for them—they shouldn’t be asking someone else to pay their bill.

Eliminate redundancy, waste, and fraud in government spending.  Incent employees to reduce costs and improve services.  Pay for performance (e.g. measurable efficiency or tax savings) and not longevity.  Reward government employees for returning savings to the taxpayers, rather than spending all the money budgeted each year.

Increase accountability, visibility and transparency for how taxpayer money has been and is being spent.  Implement and enforce significant consequences for waste and fraud.  The Congress is a fiduciary of taxpayer money.  We need you to act more like one.

America is at a crucial junction.  We have the ability to cut out and remove the cancer that is our runaway government spending and restore the financial health of our country, or we can continue to delay the operation and eventually lose our global reputation as a superpower and responsible, reliable custodian of the world’s reserve currency.  

We the undersigned want you to take the lead and make the hard decision to reduce the size of our federal government and debt starting today. 



Mary C. Murphy                                              Karen Testerman

Financial Advisor, Business Owner &              Former Gubernatorial Candidate

Facilitator -- Bedford Money Club                    Franklin, NH

Bedford, NH


Judy Gosselin                                                   Tina Gleisner

Private Investigator                                         Business Owner

Manchester, NH                                               Hampton, NH


Evelyn Bergeron                                              Mary-Ellen Russell

Teacher                                                            Teacher

Chester, NH                                                     Londonderry, NH


Terry Chapman                                                Nancy Elliott

Retired Business Owner                                   Former NH State Representative and

Bedford, NH                                                      Business Owner

                                                                         Merrimack, NH


Carolyn Finke                                                   Alice Morrow

Financial Advisor                                              Retired College Professor

Bedford, NH                                                    Bedford, NH


Kelly Dobens                                                   Kathy Sousa

Business Owner                                              Insurance Agent

Manchester, NH                                               Bedford, NH


Brenda Wiley                                                   Addie Lecza    

Business Owner                                                Administrator                                       

Mason, NH                                                      Bedford, NH



Lynda Simmons                                                Margaret Burke

Business Owner                                                Teacher

Bedford, NH                                                    Manchester, NH


Kerri Salls                                                        Marilyn Godshall                                 

Business Owner                                                Executive Recruiter                                          

Framingham, MA                                             Nashua, NH