In 1823, Thomas Jefferson laid out in a letter his plan for public education in Virginia and more generally, throughout the United States.

The public education… we divide into three grades: 1. Primary schools, in which are taught reading, writing, and common arithmetic, to every infant of the State, male and female. 2. Intermediate schools, in which an education is given proper for artificers and the middle vocations of life; in grammar, for example, general history, logarithms, arithmetic, plane trigonometry, mensuration, the use of the globes, navigation, the mechanical principles, the elements of natural philosophy, and, as a preparation for the University, the Greek and Latin languages. 3. An University, in which these and all other useful sciences shall be taught in their highest degree; the expenses of these institutions are defrayed partly by the public, and partly by the individuals profiting of them.

Today, President Obama signed a series of fixes in the health care bill, which in itself is nothing to be proud of. There is part of the bill, however, that is worthy of note and, in my opinion, represents a good step in providing higher education in an affordable manner.

Starting July 1, all new federal student loans will be direct loans, delivered and collected by private companies under performance-based contracts with the Department of Education, according to officials. Interest rates for some borrowers will also be lowered.

The new law, which first passed the House in September, greatly expands the Pell Grant program for low-income students. The reforms aim to revitalize community colleges and increase support for institutions that serve minorities and historically black colleges.

This reform of the federal student loan programs will save taxpayers $68 billion over the next decade,” Obama said in his weekly address Saturday. “And with this legislation, we’re putting that money to use achieving a goal I set for America: By the end of this decade, we will once again have the highest proportion of college graduates in the world.”

Part of what differentiates America from the rest of the world is that we guarantee equal opportunity, but leave the outcome to the devices and ability of each individual. This insures that those who are willing and capable can succeed, no matter their background.

The old way student loans were handled was inefficient and expensive. For students, the government, the bank and the school all require separate applications. The school must then get in touch with the government to find out how much the student deserves and then the school must certify to the bank the student’s status and then the bank must send a promissory note to the student and  it goes on and on. Now, hopefully there will be one application – making it easier to apply and less intimidating for those who think they won’t qualify.

The old way, banks were given billion in subsidies to give out student loans. They make most of their money back over a 10 or 15 year period and so they pocketed billions in taxpayer dollars. While they were taking a certain amount of risk, it was risk that was too costly to subsidize via a middleman.

It makes more sense for the government to handle student loans. I know, I know, sounds crazy but it’s true. Because the risk is so great, it’s expensive for banks to give out loans over such a long span. The government really is the only institution that can afford to hand out billions over a long period of time.

In no way do I think I’m compromising my limited government values by feeling this way. Jefferson was clear in saying that government’s have purpose and it’s in all of our interests to educated the masses. An educated person is more productive and prosperous than an uneducated one. The cost of education is certainly cheaper than the cost of the effects caused by uneducated people. Uneducated people need welfare, unemployment and health care provided to them. They cause strain on our social system and pull down our economy, rather than contributing to it.

As Jefferson made clear, all people should be educated. Some, more so than others, but nonetheless all. And no one should be denied opportunity because they cannot afford it.

Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.

“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of theInternational Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.

Make no mistake about it – the Democratic Party is growing. It’s demographics – hispanics, high-educated white voters – are growing and more and more young people are associating themselves as social liberals who care little for fiscal or economic conservatism.

That spells trouble for Republicans and according to Fortier it means:

The GOP needs more Bob McDonnells and Scott Browns, not wide-eyed, good government types or stodgy conservatives, but people with a mix of conservatism and at least a part of the populism that is mainstream in the middle class.

Fortier is addressing an original piece, which might be worthwhile to look at in part. Henry Olsen at National Review addresses what may lead to the downfall of the GOP.

My thoughts on the issue are fairly straightforward. The Republican Party needs to have a positive voice that advocates fiscal discipline, pro-growth economic policies and a strong national defense plan. The approach should be level-headed, involve moderation and seek pragmatic solutions to policy challenges.

We should concentrate first on balancing the federal budget by reforming the tax code and cutting unnecessary spending. Tax reform should create a more capital friendly environment that encourages small-business growth and corporate investment at home, not abroad. Entitlement spending should be near the top of the list when it comes to what needs reform. Our social programs cannot be responsible for bankrupting our nation. Underwriting the world’s security is expensive and unfortunately, we must make a choice between financing a modern welfare state or being the world’s most powerful – and most secure – country.

We should call for the continued reform and strengthening of our armed forces. Unfortunately for Congress, this may mean their districts will lose important government contracts.

Social issues like gay-marriage and abortion should be addressed at the state-level where the people can make their own decisions. We should recognize, however, the inevitable fact that the Court is more than likely to address these issues from an equal rights standpoint.

Our family first approach should advocate an egalitarian system and a business world that accepts women as part of the workforce and as mothers.

Health care and education also need serious reform. There are a number of other issues that deserve attention, but we must develop priorities.

Appalachian Power Vice President Dan Carson says the utility is prepared to suspend an interim rate increase that took effect in December.

Carson made that statement Wednesday afternoon at a legislative hearing in Richmond.

Concern over rising electricity bills prompted lawmakers to introduce a number of measures directed at Appalachian Power.

Carson says the action would take effect after the governor signs proposed legislation.

He says the action would provide relief in a matter of days rather than weeks or months.

Martinsville Delegate Ward Armstrong says the proposal is a “good first step, but just a good first step.”

I want to do some more research on this, including trying to get in touch with Appalachian Power, but my early inclination is to say that the power company is probably justified in its rate increase. I watched the following video on APCO’s Youtube Channel and heard something that immediately made it all click for me.

“Although we realize it’s a bad time to raise rates due to the economy, the cost of generating electricty has gone up, we’ve had to meet more federal guidelines for emissions on our power plants. Even though it’s a bad time for the economy, it’s something that we could not prevent.” (my emphasis)

Obviously – what intrigues me here are the federal emissions guidelines. I want to look more into this and I’ll come back to it soon. I do, however, want to add something on the subject of power companies.

I understand people are having trouble paying their bills. My parents and plenty of people I know are among the many who have to ask themselves every month, how am I going to make this work?

I also understand though, Appalachian Power is a business. They have costs and they deserve to make a profit. Part of your state lawmaker’s job is to decide how much profit they should make – or at least, how much they should charge you. Next time Appalachian Power asks for a rate hike, don’t get upset at them – call your state legislator. And when you go to vote in November, ask yourself who Appalachian Power is sending money to – I’ll give you a hint, his name is Ward Armstrong.

White House Photographer Pete Souza

President Obama in his address on “the Way Forward” in Afghanstian said he would commit 30,000 new troops to the war-torn country, but stipulated they will begin withdrawing in 18 months.

I recognize the tough political position President Obama is in. The left is already blasting him for creating a “surge” and the right, though more friendly than the left, is upset at the timetable.

His decision reflects the difficulty of bridging domestic politics and international relations. Throughout U.S. history, policymakers have faced this dilemma. Moreover, throughout the recorded history of international relations, policymakers have faced this dilemma. How does one reconcile the “national interest” with public opinion, the influence of democratic institutions like Congess and other political interests, i.e. the people who donate money and drive your policy?

President Obama was elected on a platform of change. Thus is his difficulty of continuing the war in Afghanistan much the way his predecessor did and thus is the reason for the timetable – to pacify his political pace. You can’t blame him, it is an obviously necessary move if he doesn’t want to ruin his party’s midterm elections in 2010 or his reelection campaign in 2012.

Having admitted that I understand his logic and reasoning for implementing a time table, I still have to share my distaste. I hoped that the President might put politics aside for the sake of victory.

It comes down to this question: do we have a vital interest in a peaceful and allied Afghanistan? I would answer yes and say furthermore, we have an interest in a peaceful and allied Middle East. That includes Afghanistan, Pakistan, Iran, Iraq and beyond. Because defeat in Afghanistan would allow the Taliban to operate functionally, Afghanistan is a country of vital interest to the security of the United States. Lest we not forget from where the terrorist attacks of September 11 were orchestrated.

The President disagrees, I believe and has done so by making evident his lack of desire to achieve total victory in Afghanistan. He has scaled back the war on terror, actually ended it, and this move further reiterates that point.

The President has developed an exit strategy not predicated on victory. He has done so for the two reasons I already mentioned: (a) domestic political influence and (b) failure to understand the vital importance of a peaceful and allied Afghanistan.

The Congressional Budget Office called the federal budget, in its current form, “unsustainable.” A working paper from the American Enterprise Institute highlights the CBO’s projections, with a concluding analysis.

According to several recent reports issued by the Congressional Budget Office (CBO), the U.S. federal budget is on an unsustainable path. In fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 44 percent of GDP at the end of fiscal year 2008 to 61 percent at the end of fiscal year 2010. The current deficit is due in part to the stimulus legislation and efforts to stabilize financial markets. CBO (2009a) projects that spending related to such economic weakness will push primary spending (defined as all spending, except interest payments on federal debt) up to 26 percent of GDP this fiscal year, the highest since World War II.

The long-term budget outlook is equally troubling. The CBO report (2009b) projects that under the Obama Administration proposals, the cumulative deficit for the period 2010-2019 will be approximately $9.1 trillion. In other words, the average deficit per year will approach $1 trillion. After 2019, the situation is expected to worsen with deficits (under certain scenarios) projected at 17 percent of GDP by 2040.

These projections raise serious concerns about the long-term sustainability of U.S. fiscal policy. If spending grows as projected and revenues do not rise at a matching rate, annual deficits will climb and federal debt will grow significantly. As debt increases, a higher and higher share of national output will be devoted to interest payments, and the level of taxation needed to sustain government becomes historically unprecedented. Large budget deficits would reduce national saving, lead to more borrowing from abroad and also lower domestic investment. If such a path is to be averted, then changing policy sooner reduces the size of the problem significantly.

Fiscal solvency is the most-pressing long-term issue faced by the Obama Administration and the current Congress. Our fiscal recklessness undermines our economic future, the position of our currency in the world and threatens our position as the world’s pre-eminent economic superpower.

The need to save our economy from the brink of collapse and create jobs is, understandably, a top-priority. Beyond that, and beyond the current economic cycle, however, policymakers need to be committed to not only balancing our yearly budgets, but also lowering our debt load. It could even be said that if the United States had maintained over the past three decades a fiscal policy even somewhat resembling that of a responsible one, short-term deficits would not be a problem. Short-term deficits are acceptable if and only if the United States has a responsible long-term fiscal policy.

As our deficits grow and as we leave them unattended, more and more of the burden for repaying our debt will be passed on to my generation and my children’s generation. It will require more resources and a larger part of their economy to make these payments. That could mean a weaker social safety net and higher taxes. It could mean reduced military spending and the sacrifice of strategic security. It could mean cuts to education, transportation and more. The sacrifices we have to make today in order to put ourselves on a path to solvency will be marginal compared to the choices and challenges of the next thirty years, if we allow our fiscal irresponsibility to continue.

White House Photograph

Presidential trips like the one President Obama finished up this week aren’t necessarily commonplace. But they aren’t out of the ordinary either.

They offer the U.S. President the opportunity to build personal relationships with foreign heads of state, hammer out important diplomatic compromises and build goodwill around the world. Did President Obama do any of this on his swing through Asia?

An honest answer would be yes, no and maybe. President Obama has developed a working relationship with the President of South Korea, which they both acknowledged in a press conference late Wednesday. The President, however, accomplished very little in the way of details, especially regarding the presence of U.S. troops in Japan, which was taken off the agenda all together because lower-level staffers couldn’t come to terms. Lastly, President Obama was greeted with a mixed reception around the region – cheers in Singapore, censorship in China.

The fruit from a trip like this may take some time to bear out, so it’s hard to say in the end what he really accomplished.

U.S. President Barack Obama pledged Thursday morning to ratify a free-trade agreement with South Korea that has been stuck for two years, challenging the U.S. Congress to separate South Korea from other Asian nations enjoying vast trade surpluses with the U.S.

“In the United States, there is a misperception that the [free-trade agreement] once passed will only benefit Korea and will be detrimental to American consumers, which is not true,” Mr. Lee said.

Mr. Lee characterized as “minuscule” the trade surplus that South Korea has with the U.S., a characterization Mr. Obama agreed with. The U.S. president challenged Congress, which is run by his own party, to show more sophistication on trade issues.

“There’s a tendency to lump all of Asia together when Congress looks at trade agreements and says it appears this is a one-way street,” Mr. Obama said.

South Korea’s trade surplus with the U.S. last year was $13.3 billion out of total trade of $81.5 billion, according to U.S. figures.

The free-trade agreement, the largest the U.S. has negotiated since the North American Free Trade Agreement with Canada and Mexico in the early 1990s, is expected to boost that more than $80 billion in annual two-way trade between South Korea and the U.S. by $10 billion to $20 billion about five years after ratification.

Free trade is a good thing. A deal with South Korea will do a lot for the U.S. in a region where they are rapidly falling behind when it comes to trade liberalization.

Economic liberalization has been at the heart of U.S. foreign policy since 1918. We’ve promoted the idea of open markets across the world for almost a century because they bring prosperity and wealth to the masses. It has long been conventional wisdom that the U.S. would prosper most in a world economy where free trade is possible.

Labor unions and protectionist thought has taken over and so instead of prosperity, we’re falling behind at our own game.

Despite the rhetoric, I still question if the President is serious about trade liberalization with Asia. The tariff on Chinese tires earlier this year says a lot about who has his ear.

Representative Barney Frank and Senator Chris Dodd, Democrats of Massachusetts and Connecticut, respectively, are working on massive new legislation that will serious overhaul how our financial markets are needed.

On the surface, many people won’t object, especially after the turmoil we’ve been through over the last year, but if you dig a little deeper, you’ll see what the problem is.

Essentially, we’re going to give the federal government  TARP 4 Ever. In other words, dramatic, game-changing regulation and resuscitation of financial institutions banks could become the every day norm in America.

Resources

• Bloomberg | U.S. Rules Revamp Gains as Frank Sets Vote, Senate Bill Readied
• WSJ | Clash Looms on Banks
• WSJ | Bank Crackdown Draws Criticism
• Marketwatch | Critics take Frank ‘too-big-to-fail’ bill to task

The new number comes from Senator Judd Gregg and includes some funny math. You can read an explanation of that at HotAir.

Senator Judd Gregg (R-NH), ranking member of the Senate Budget Committee today commented on the Congressional Budget Office’s (CBO) more detailed cost estimate of the manager’s amendment to the House health reform bill.

Senator Gregg stated, “The CBO estimate released last night finally sheds light on the smoke and mirrors game the majority has been playing with the cost of their health care reform proposal. Over the first 10 years, this legislation builds in gross new spending of $1.7 trillion – and most of the new spending doesn’t even start until 2014. Once that spending is fully phased in, the House Democratic bill rings up at more than $3 trillion over ten years.

As a side note, Heritage says $2.6 trillion.

Obviously, the real answer to how much health care reform will cost is: We don’t know. Including cuts to medicare and tax increases, it’s obvious that the plan will be expensive.

This is more than a Republican Party talking point, however. Spending this much money could have serious repercussions on the fiscal solvency of the federal government. Entitlements never get smaller. Social safety net programs, like Medicare/Medicaid and Social Security and now health care, only get bigger.

With that in mind, even if health care does lower the deficit over the next ten years and even if it only costs $1.2 trillion in that decade, what about the next ten years, or twenty?