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          Richard (“Chip) Peterson 19th District Congressional Campaign Issues  

social security policy requirements social security Health Care
taxes taxes and spending constitutional rights
oil and gas military spending individual rights and liberties
regulation and constituent service war on drugs education
international relations government regulations agriculture
POLICY POSITIONS 10/2004 government spending KCBD ANSWERS 10/2004


1.   Social Security—The government needs to stop lying to the people and face the problem honestly and  sensibly. It must admit that the social security “trust fund” cannot be trusted. It must let people know that social security is not like a bank account, and future payments are not guaranteed. It must recognize that tax increases now will not help solve the nations social security problem in the future. It must admit that tax cuts now that increase the nation’s productivity in the future will, in fact, be helpful for solving our nation’s future social security problem. It must recognize that immigration of qualified foreigners who want to work in the U.S. should be encouraged. It should adopt family friendly and strong education policies, so we will have more future workers and they will be more productive.


2. Taxes and Spending—The government needs to reduce marginal tax rates to improve work and investment incentives and Congress needs to spend the people’s money as carefully as its members would spend their own money. The tax structure should be simplified and maximum income tax rates reduced so people will have a stronger incentive to work and produce.  Ideally, the income tax would be abolished and replaced, if necessary, with a value added tax, but that is a very long shot. Wasteful government spending should be eliminated by cutting out pork barrel spending and cutting out federal spending on things that people or local governments can better do for themselves.


3.  Regulation and Constituent Service—The government needs to get off peoples’ backs and Congressional  representatives need to use their staffs and influence so the government will stop tying up peoples’ lives in innumerable bundles of red tape. Tax codes are too complicated and need to be simplified. Common sense needs to be used when declaring species endangered—like the Spotted Owl or, potentially, the Colorado River Shiner or Prairie Dogs. Farmers and landowners should be freed from excessive restrictions on their land and water use. Red tape requirements on banks and all types of business should be simplified or eliminated. Our Constitution’s Bill of Rights should be respected by all levels of government.


4.       Social Security Policy Requirements

a.       Allow people to direct part of their social security taxes to personal savings accounts or individual investment accounts, which they would own and have inheritance rights to, to supplement a minimal social security guarantee. This would generate real savings in the economy and keep government from spending current social security tax surpluses.

b.       Reduce marginal tax rates and eliminate double taxation of dividends to encourage savings and investment and the distribution of the fruits of corporate investment to stockholders. It would also eliminate the bias toward corporate overindebtedness and put pressure on corporate management to do more for their stockholders rather than themselves.

c.       Stimulate productivity increasing work effort and investment with lower tax rates, especially on capital investment and research and development expenditures. (full expensing of capital investment, with loss carryovers, or a value added tax) would be helpful.

d.       Emphasize the need for education, research, and the need for the development of an excellent work force, by overcoming capital market limitations and limitations on the ability of the developers of new products, processes, or information to capitalize on their innovations as such limitations prevent people from investing adequately in education and research. This would involve student loans and the enforcement of copyright and patent laws, as well as programs to encourage people to obtain job-related skills

e.       Allow liberal immigration of people who wish to come to the U.S. to work, especially skilled people. But discontinue the Clinton era programs that let people immigrate by winning a lottery and let people come to the U.S. primarily to obtain welfare. Also, do not allow people to immigrate who want to destroy our country.

f.        Keep a strong national defense to ensure that foreigners will keep their commitments to us and will not try to steal our wealth.

g.       Take steps, if necessary, to increase the transparency of the financial markets so people can make better investment decisions. And will not de deluded by fraudulent operators.

5.       Taxes need to be simplified and marginal tax rates need to be reduced in order to encourage people to work hard and benefit from the fruits of their efforts. Lower (or zero) marginal income tax rates are key to letting people keep more of their extra production, and thereby encouraging them to work hard. A value added tax could possibly be substituted for an income tax. Such a tax would be simpler to calculate and collect, and would be advantageous in international trading—since it could be rebated on exported goods and levied on imported goods. The estate tax is basically immoral as it is levied when the deceased cannot fight back. It also is socialistic as it basically presumes that all assets belong to the government except for what the government lets people temporarily keep. The estate tax should be permanently abolished.

6.       Government spending is inherently less efficient than personal spending so government should not spend on things people can provide for themselves unless significant “externality effects” exist, as when multiple people benefit from the government expenditure, or are hurt by its absence—as with the provision of law and order and national defense.

When considering government spending, consider the following:

a.       Government has to collect more money from the people than it has available to spend because of the costs of collecting funds and administering them.

b.       Government will not spend the peoples’ money nearly as carefully as people will spend their own money, so more wasteful spending will occur.

c.       Government employees may use their positions and the taxpayers’ money to enjoy perquisites or privileges that the ordinary taxpayer doesn’t have.

d.       Because power corrupts, the more power government agencies have and the greater the amount of money government has to spend, the more likely it is that graft and corruption will exist.

e.       A substantial amount of government spending in recent years has been “pork barrel” spending that does not benefit the public in general but substantially benefits key contributors to politicians. Such spending should be eliminated.

f.        Because government is not subject to a profit motive, useless projects are usually not discontinued or are retained long after their initial need has been eliminated. The Grace Commission Report  recommendations should be adopted to eliminate many of these programs.

When considering taxes, consider the following:

  1. Will people work harder and take more chances to get ahead if they get to keep a higher percentage of what they make?
  2. Will people invest more if the government lets them deduct the costs of their investments against other income and lets them keep more of the fruits of their labors?
  3. Will producers tend to hire more people and expand their operations if their operations become more profitable because they have to pay less tax?
  4. Should people be taxed more according to how much they contribute to the national welfare or how much they consume from current national production?
  5. Would it be advantageous in international trade if a government rebated a “value added tax” on exported goods, thereby reducing their price to foreign purchasers, and levied a “value added tax” upon all imports?
  6. Is it fair to tax people on income or assets that have already been taxed at least once?
  7. Does the government own all the assets in the country and thus have a right to claim the assets a person has worked hard and saved to obtain during his or her lifetime just because the person happened to die? Or does this sound like socialism or communism, where the government claims it owns all productive assets in the country?
  8. If the government claims half of all the assets a person owns upon the person’s death, won’t that reduce a person’s incentive to work hard and save to accumulate wealth before he or she dies?
  9. If the government levies a high tax upon estates upon death, won’t that cause many people to have to sell their family farms or family businesses, thereby enacting a hardship on future generations?


When considering government regulation, consider the following questions.

a.       Do you think all regulations are justified and reflect the use of common sense/

b.       Do you think that regulatory compliance costs are excessive relative to the benefits they bring?

c.       Do you think that many regulations are imposed as a sneaky way that government can cause private business or private individuals to undertake projects that the government wants undertaken without the government having to pay for them?

d.       Do you think that many regulations are imposed merely to be politically correct rather than to achieve a stated goal efficiently?

When considering the war on drugs, consider the following questions

a.       Do you think that anyone who really wants to take mind altering drugs cannot get them now?

b.       Do you think that the immense profits that can be earned from the drug trade don’t lead to the corruption of some politicians or law enforcement personnel?

c.       Also, do you think that the high potential profits from dealing in drugs don’t lure some people into the drug trade that could employ themselves more usefully with less risk in some other activity?

d.       Do you think that the fact that properties, cash, vehicles, and other valuable items allegedly used in the drug trade can be confiscated by law enforcement agencies don’t contribute to some trumped up charges and abuses of the individual rights and right of due process guaranteed to U.S. citizens by the U.S. Constitution?

e.        Do you believe that the war on drugs has never led to the use of excessive force and the violation of constitutional rights of innocent U.S. citizens?

f.        Do you believe that all mind altering drugs will permanently cause people who take them to become addicted?

g.       Do you believe that the availability of cheap dangerous drugs through prescription might reduce the appeal of taking them for people who are not addicted and reduce crime by people who are addicted?

On military spending.

                It is essential to have a strong military to defend our homeland and we should honor the people who serve us in the military.

                It is questionable as to the extent our military should be asked to risk their lives in foreign adventures. While it is clear that military intervention in Afganistan was essential for defending our homeland against the terrorists lodged there, it is not clear that our military should have been asked to put their lives at risk in Somalia, Bosnia, Kosovo, and Haiti, as none of those countries posed an imminent threat to the U.S. and some of our soldiers lost their lives for no clear gain. While it is clear that we needed to resist the advance of Communism in South Korea in 1950, it is not clear that we should have retained substantial forces there after South Korea developed to the point that it could defend itself without imposing costs on the U.S. Possibly it is too late to pull out now without ensuring that North Korea is defanged, but we should try to shift the burden of containing them to their neighbor countries, who have a greater interest in the region than we do provided the North Koreans do not sell weapons of mass destruction to our enemies.

On International Relations

                It should be recognized that all U.S. consumers potentially benefit from free and unfettered international trade. However, it should be noted that U.S. producers can be hurt by unfair trade or  by rapidly fluctuating exchange rates or terms f trade—so some provisions may need to be made to provide temporary trade adjustment assistance to producers harmed by international trade. Such assistance should be temporary so U.S. producers will not permanently engage in the production of goods for which they may no longer have a comparative advantage.

Furthermore, international trade relations and patent rights need to be enforced across national boundaries to preserve our wealth. Thus, we must be engaged in international relations.

However, foreign political entanglements need to be minimized—especially if they are not to our advantage or are with countries that seek to undermine us.

On Health Care

                Our present health car system is a mess. Many reforms are needed. Most importantly, a uniform price system needs to be developed and publicized so people can allocate their health care money efficiently. Right now, uninsured people pay more than insured health care users—which is unfair and unjust. Price lists need to be created and all people need to pay at least a portion of all their medical bills (if only 1%) so they will know how much each service costs, and can choose less expensive alternatives if necessary. Furthermore, health care providers need to charge uniform prices so people can make price comparisons and shop around. Insurance companies can compete on the premiums they charge and on the percentage of the billed prices they agree to cover. At the same time, insurance premiums could be increased or covered percentages reduced for people who do not comply with doctors’ recommendations, just as they are for people who drink and drive and have more accidents. Medical savings plans can be used to cover insurance deductibles and other uncovered payments.

                On the other side, people need to know what healthcare products they are getting for the money they, their insurance companies, or their government program (I’m assuming medicaid will continue in some form) spends. Hospitals and healthcare providers need to report infection rates and surgery complication rates  (adjusted for the level of difficulty of the operation) to a central public information registry. This would allow potential consumers to judge the likelihood of complications from elective procedures and also would facilitate medical research.

                The tort system needs to be reformed in medicine, so outrageously high judgments, unrelated to the actual losses incurred, are not allowed for “pain and suffering” and other indirect claims. That is necessary in order to ensure that doctors will not be priced out of various specialties by exorbitant insurance rates.  At the same time, medical registry reports and professional sanctions can be employed to restrict the practices of the least competent doctors who are most prone to making medical mistakes.

                Some level of  health care may be legitimately subsidized by the government, especially if positive externalities exist—as with disease prevention.


On individual rights and liberties.

                The rights guaranteed to U.S. citizens by the Constitution and the Bill of Rights must be respected by all levels of government. The disturbing trend to remove or limit those rights is contrary to the intent of the framers of our constitution. The original creators of our constitutional system of government took great pains to insure that the people would retain their individual liberties against the encroachments of government power. The framers of our constitution produced both a separation of government powers with our tripartite system (executive, judicial, and legislative) and our electoral system to ensure that individuals would remain protected from government excesses. This would include the right to freedom of the press, free speech, religious freedom, the freedom of peaceable assembly, the right to keep and bear arms, the right to trial by jury, protections against unreasonable search and seizure and all other rights guaranteed to U.S. citizens in the U.S. constitution and its amendments.


5.   Agriculture :

The U.S. has the most productive farmers in the world because they have substantial capital invested in their operations—in their land, their equipment, and their education and knowledge. We can’t allow the returns on their capital to be whipsawed by rapid price fluctuations as it will increase their cost of capital and their risk of bankruptcy, where valuable capital and knowledge might be lost forever. At the same time, we don’t want them to use their capital to produce crops in which they do not have a comparative advantage if those crops are in chronic surplus. Cotton farmers badly needed the new 10 year farm bill that was just passed because prices were abysmally low. However, in order to get the cotton price supports raised, the farm bill had to also include handsome price supports for a multitude of other crops and supports for agricultural products that had never had price supports before. The President objected to the total cost but, because it was an election year, he signed the bill. Soon, the high price supports will generate overproduction of many crops and the cost of the farm bill will go up substantially. That will prompt a revision. The strategy of the District 19 Congressional Representative must be to ensure that farmers in the District are not unfairly hurt by the revision. I think the best way to do so is to argue for floating price support levels—from which loan deficiency payments would be calculated. For instance, the present price support levels should be kept for 5 years. After 5 years, the last year’s market price should be averaged with 4 years of the farm bill support price to revise the support price. The next year, 2 years of average market prices should be averaged with the Bill’s support price to get the new support price, etc., until after 5 years the support price would equal the average market price over the preceding 5 years. In that way, support prices would eventually fall for all crops with chronic surpluses—but they would do so gradually so farmers would have time to shift their capital and production to other crops, thereby gradually lowering the crop surplus, without incurring bankruptcy, and letting market prices rise once again. This process would apply more forcibly to the crops with support prices that are way too high, than to cotton, where support prices are closer to the costs of production.

6Oil and Gas:

Our country badly needs to increase oil production and its productive capacity. We also need to ensure that world oil supplies will be adequate in case the crazy religious fanatics take over Saudi Arabia and curtail its oil production. We should encourage oil drilling and production on domestic lands—especially in ANWR, where the objections of the Democrats and environmentalists make no sense since hardly anyone visits the area and drilling activities on the North Slope of Alaska have not been shown to cause any long run damage to the wildlife. We also need to ensure that Iraqi oil production capabilities are developed rapidly—and we should give reconstruction contracts preferentially to U.S. companies—and definitely not to French or Russian companies, given the recent duplicity of their UN representatives. That will increase world production capacity. The recent energy bill proposed expanding the existing Strategic Petroleum Reserve—which consists of oil that the US government has purchased, transported to the gulf coast and poured down salt domes—mainly in Louisiana. I don’t think that is wise as from what I have read, some of the pumps used to recover the oil have rusted out, much of the crude poured down the holes is low quality crude from Mexico, and, when Clinton sold some of the crude, contacts for the oil were given to people who had no oil experience. Since politically granted contracts may not have been completely fulfilled, or fulfilled with inadequate grades of oil, and since the salt domes might leak or the pumps might become clogged with residue from poor quality oil in the domes, I seriously doubt whether we could recover a significant fraction of the oil that is supposed to be in the strategic petroleum reserves. Furthermore, we waste energy lifting oil, sending it to Louisiana, and pouring it down a hole.

 If we want to enlarge our strategic ability to produce petroleum in a crisis, there is a much better way to do so. I suggest that the government, instead of purchasing raw oil, purchase partially depleted


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oil fields, where the lifting and oil recovery costs are too great to continue private production unless oil prices are quite high. The government would save the private owners oilfield shutdown costs and could hold the fields and prepare them for future recovery by investing in secondary and/or tertiary recovery processes that could be implemented if the oil price skyrocketed and we needed to draw down our strategic reserves. The distribution system for oil from existing fields would already be in place and the oil could be recovered quite rapidly once the lifting costs could be covered. This process would save shutdown costs, which are a deadweight loss to the economy, save lifting and transport costs of oil to Louisiana, which is also a deadweight loss, and would encourage the government to research and develop secondary and tertiary recovery techniques that could provide benefits to all oil producers.

7.   Social Security

            Our government is heading for a “train wreck” on social security by 2008 when the first baby boomers become eligible to draw upon it. The Social Security Administration admits to an actuarial deficit of $3.5 TRILLION, and the real deficit is worse than that since that number is discounted and offset with nearly $1.4 Trillion in the social security “trust funds” which is essentially worthless—just another form of government IOU. The major problem is that people are living over 20 years longer than when social security was started. That is a good thing, but it means more people live to retire and retirees are living longer. My Mother, for instance, has been receiving social security for 32 years, even though she lied about her age and worked to the age of 67. When we had many workers per retiree, increasing age was not a problem. But it will be soon, because, after the baby boomers retire, there may be less than 2 workers for each retiree. A second problem is that when we had 9 workers per retiree in the early 1960’s, Congress greatly expanded social security benefits. Thus, social security costs more than when it was first started as an insurance plan.

            We have to act now to fix social security. If we do nothing we will face a fiscal crisis that undermines our nation’s creditworthiness and causes us to suddenly have to raise retirement ages and employment taxes and reduce payments to people who are already retired and can no longer adjust their finances. Furthermore, if we raise employment taxes, it will cost more to employ people so employment will rise, as in Old Europe, where their employment taxes are high and their unemployment levels are now near 10%, That will further hurt the economy and its ability to pay retirement benefits.

            Thus, we have to give fair warning now that “normal” retirement ages have to rise—so people can plan their lives. We should keep early retirement at 62 with reduced benefits, and we should implement tax advantaged savings plans—such as those proposed by the Bush Administration . Thus, people could save so they could afford to retire early or supplement their social security. The increased saving would also help the economy generate increased productivity so retirement payments could be more easily afforded in the future. It takes time to accumulate savings, so people need to start now.

8. Education:

I strongly support education and research as it will make people more productive and better off in the future, and better able to support retirees, as well. I support student loans for qualified students who otherwise could not afford to get a college education.

9Constitutional Rights

I support all Constitutional Rights, as most were established to protect people from excessive government power. That includes the right to freedom of religion, speech, the press, and peaceable assembly; the right to keep and bear arms; protections against unreasonable search and seizure; and the right to due process before a person can be deprived of life, liberty or property. It also includes the right to reasonable bail and the right to trial by a jury of one’s peers. In addition, our constitution reserves the rights not explicitly given to the Federal government to the people or to the states, unless those right are specifically prohibited to the states. I am worried that we are losing our constitutional protections as the war on drugs and the war on terror are implemented.


Richard Peterson Campaign, P.O. Box 93417, Lubbock,Texas, 79493, Richard Peterson,Treasurer



Email Chip with any questions.

Richard Peterson Campaign, Richard Peterson treasurer