America's Ticking Bankruptcy Bomb: How the Looming Debt Crisis Threatens the American Dream-and How We Can Turn the Tide Before It's Too Late [Hardcover]

Peter Ferrara (Author)

Book Description

Release date: June 14, 2011

In America’s Ticking Bankruptcy Bomb, conservative policy expert Peter Ferrara explores the issue that will be THE hot-button topic from now until the 2012 presidential election: the looming bankruptcy of the federal government of the United States of America. Providing indisputable evidence that the American welfare state, aggressively expanded by Barack Obama and the Democrats in Congress, is on the verge of rapid and total collapse, Ferrara offers concrete proposals for reforming entitlement programs along free market lines that will shift responsibility from centralized bureaucracies to individual Americans. For every concerned citizen, America’s Ticking Bankruptcy Bomb is a must-read—a blueprint for avoiding the impending catastrophe before it’s too late.

Editorial Reviews

Review

“In an authoratative book which leads to an inarguable conclusion, Peter Ferrara provides an antidote for anyone still in denial about the mortal threat posed by our nation’s debt--and the anti-growth policies that are adding to it.” (Mitch Daniels, Governor, Indiana )

From the Back Cover

Record-shattering government spending, taxes, deficits, and debt threaten a downward spiral in the American people's standard of living, ultimately stealing the American dream.

The welfare state is melting down. State and local governments are reeling under the burden of runaway public-employee pensions, dysfunctional education bureaucracies, and belligerent public-sector unions. In the past, the state governments have turned to the federal government to bail them out. But the federal government is broke.

In chilling detail, former Reagan administration adviser Peter Ferrara documents the looming collapse of the American social safety net and describes what will happen when the government goes bankrupt. He also introduces us to his vision for the way forward: a new concept that he calls "prosperity independence." Ferrara supports sweeping tax reform to maximize economic growth, and fundamental entitlement reform to replace our outdated redistribution-based welfare state with a modernized comprehensive social safety net.

Utilizing modern capital, labor, and insurance markets, these reforms will accomplish far more than our current entitlement programs could ever hope to do, at a fraction of the cost. In addition to balancing our national budget and cutting back on government power, control, taxation, and spending, America will finally win the War on Poverty.

Ferrara also shows how our nation can enjoy a new generation-long economic boom, once again leading the world in economic growth and abundance.

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Product Details

• Hardcover: 432 pages
• Publisher: Broadside Books (June 14, 2011)
• Language: English
• ISBN-10: 0062025775
• ISBN-13: 978-0062025777
• Product Dimensions: 9.3 x 6.4 x 1.4 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (14 customer reviews)
• Amazon Best Sellers Rank: #840,328 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

13 of 15 people found the following review helpful

5.0 out of 5 stars The Right Analysis and the Right Solutions August 8, 2011

By Ryan Ellis

Format:Hardcover

In America's Ticking Bankruptcy Bomb, Peter Ferrara provides a comprehensive overview of the debt crisis that threatens economic security, individual freedom and collective prosperity of the United States. More importantly, however, Ferrara offers critically important policy solutions to steer America back on course. Reforming Social Security and Medicare into personal account systems, Ferrara argues, would allow for the savings, investment, and growth that are currently impossible for these unsustainable, hemorrhaging entitlement programs. Repealing Obamacare would prevent a further explosion of suffocating taxes, spending, and regulation. Ferrara makes the case for a modern, 21st century healthcare safety net that would empower individuals, providing them with both the most advanced medical services and the incentive to control costs. He lays out a plan for the 185 federal welfare programs be block granted to the states, using the 1996 reforms to AFDC as a template. Regarding tax reform, Ferrara outlines his novel "15% solution," which seeks to simplify the tax code, lower the rates, broaden the base, and kick-start a long-term economic boom that will generate enough revenues to eventually balance the federal budget.

The book begins by spelling out the problem: severe overspending causing unprecedented deficits and debt, which has led to unfunded liabilities of the nation's ever-expanding entitlement programs. Ferrara notes that in one term of office, Barack Obama's administration has racked up more national debt than all prior presidents combined. The George W. Bush administration does not escape criticism, either, most notably for its bungling of the housing crisis, but also for 8 years of its own reckless spending. Increased taxation is not a viable solution, according to Ferrara, who points to Hauser's Law as evidence that raising tax rates will not lead to increased government revenue. In other words, the United States cannot realistically tax itself into fiscal order. Without serious changes, Ferrara forecasts economic stagnation similar to the 1970s, or worse yet, the 1930s. Double-digit unemployment, double-digit, inflation, and double-digit interest rates are knocking on America's door.

Social Security is on the verge of bankruptcy. In fact, in 2010, the program ran a net cash deficit. Ferrara rightly blasts the "pay-as-you-go" financing system which does not allow for future savings or investment. While Social Security did run surpluses in the early years of its existence, the federal government quickly raided the trust fund in order to finance other projects. As a solution, Ferrara proposes that the payroll tax be replaced by personal accounts, in which funds are set aside --invested in a diversified portfolio of stocks and bonds- to purchase private life and disability insurance. This system would be modeled off the Chilean reforms of the 1980s, where workers were given the option to contribute 10% of their monthly wages into personal accounts in lieu of payroll taxes. Chileans who opted for personal accounts were free to choose between twenty investment funds that were approved and regulated by the government. Ferrara holds up Chile as a textbook example of an effective shift from an unfunded entitlement program to a prosperous system of savings and investment.

Ferrara correctly identifies the most important underlying cause of skyrocketing healthcare costs: third-party payment. In the United States, there is almost always a third-party responsible for paying health-care bills, be it an HMO, insurance company, or government program. American consumers, argues Ferrara, need to take ownership of healthcare costs so there will be strong incentive to control those costs. Unfortunately, Obamacare heaps on a bevy of new taxes and entitlements to an already unsustainable system. By expanding eligibility for Medicaid to those families who earn up to 138% of the poverty line, there will be over 24 million new Medicaid beneficiaries by 2015. Ferrara proposes a "patient-power" solution, which emphasizes health savings accounts, creates permanent high-risk pools at the state level for the uninsured, and offers a consumer choice tax credit to purchase private insurance. These sensible, pro-market reforms will encourage personal ownership and spur economic growth. In Ferrara's ideal scenario, the government would not "decide" what percent of federal spending is devoted to healthcare. This, he would say, is nothing more than arbitrary central planning. Instead, consumers should be free to make this choice in the open marketplace: "The people may effectively decide by their choices in the market that 17% is too much [to spend on healthcare]. Or over time, as the nation gets richer and richer, and technology makes desirable results more and more possible, they may decide they want to spend a lot more on healthcare."

Ferrara is unrelenting in his critique of the American welfare state -- comprising over 185 federal programs that incentivize immoral, destructive behavior and encourage perpetual poverty. In 2010 alone, entitlement and welfare spending accounted for 50% of the entire budget. Ferrara argues that the "war on poverty" was an unmitigated disaster. Work, marriage, legitimacy, crime, and drug abuse have all worsened after the 1960s. Misguided government policies have provided incentive for unmarried couples to have children, since they correctly view this is as a gateway to a generous package of benefits. Ferrara seeks to end this dependence on government through broad welfare reforms that mimic the 1996 AFDC overhaul. This would involve block granting federal funds back to the states and letting them decide how to best structure their own welfare programs. In a short amount of time, this approach would lead to substantial administrative savings, since each state would have the flexibility to create welfare programs that are best suited for their own needs.

14 of 19 people found the following review helpful

5.0 out of 5 stars Insightful thinking July 11, 2011

By John R. Lott Jr.

Format:Hardcover

The debt problems facing the US are staggering, and Peter Ferrara does an excellent job describing those problems. $14.3 trillion comes to $190,000 for the average family of four in the US. Obama's February budget proposed adding another $130,000 for that family (over $10 trillion). Americans see the riots in Greece and the unwillingness for the government to do anything to solve the problem, and even the official debt count shows us on a path that will shortly get us to Greece's debt as a share of GDP. While the EU and the US are coming to the aid of Greece and other countries, you can see the problems created when larger countries such as Spain or Italy start to have problems. Who will be able to come to our aid?

Ferrara doesn't just stop there though. Peter Ferrara is an original thinker and he offers some insightful and thoughtful solutions to the problems. One might not agree with his solutions, but they will get you to think and make your own arguments much better. Unlike many books out there, this book does treat its readers like idiots. Peter makes difficult points understandable, but he doesn't avoid the tough issues.

7 of 10 people found the following review helpful

5.0 out of 5 stars A Positive Pro-Growth Vision July 24, 2011

By Phil Kerpen

Format:Hardcover

Peter is as provocative as ever in this comprehensive, and surprisingly optimistic, look at how we can unleash market forces to meet the enormous fiscal and economic challenges the country faces.

His renewed defense of Social Security personal accounts in light of the political disaster of 2005 and financial disaster of 2008 is vital and comes at an important time in the national debate, and his proposal for completing welfare reform via block granting is another highlight.

Few readers will agree with everything in this wide-ranging book (I do not), but all will be challenged to think differently about the big fiscal problems and consider Peter's innovative solutions.