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Steve Forbes: I think, to be blunt, the reason why it ’ s been so diffi cult to cut back on government spending and their overinvolvement in the economy is because we ’ ve done it the wrong way. When you go after a specifi c government program, obviously, the benefi ciaries are going to fi ght you tooth and nail.

And benefi ciaries of other programs are also going to fi ght you because they fi gure, “ Boy, if they knock off that one, they ’ re going to come after us next. ” We saw this happen in the mid - 1990s when the Republicans took over Congress for the fi rst time in decades. Their hard - fought efforts to ratchet back government spending lasted a little over a year. Why? I think it ’ s because they were too limited in their ambitions and they made it sound like they were going to take something away from people or turn the tables on the big spenders.

Take, for example, one of the biggest sources of power, the tax code. If you ’ re simplifying the tax code, people won ’ t think you ’ re taking something away from them. Instead, they think you ’ re helping them. Another example is Social Security. The money is there for the current elderly, yet the real problem is for people in their twenties, thirties, and forties. So why not say, “ We need to help them. We ’ re not going to cut their benefi ts; instead we ’ re going to allow them to control the money by putting it into their own personal account. There will be safeguards for it, but it belongs to them, not the politicians. ” People aren ’ t going to see that as taking something away. They are going to think that the money is being taken away from the politicians, not them.

Same with health care. It ’ s all third - party; you don ’ t get to use it until you use it. Although health care in the workplace is counted c18.indd 248

8/26/08 7:21:02 PM

Steve

Forbes

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as a fringe benefi t, it ’ s not the same thing as getting money in your pay envelope or into direct deposit. Conversely, properly structured health savings accounts would put the money directly into your account. You control it. With this system you say to a worker that he may spend $ 5,000, $ 10,000, $ 15,000 on his health care, but you won ’ t see any of that money unless you go to the doctor. If you had a system where you had a high deductible policy, but you got several thousand bucks a year to go into your account and what you didn ’ t use went into a growing tax - free account, most workers are going to think, “ I ’ m coming out ahead. ”

Same with education. Why shouldn ’ t parents be able to control where their kids go to school? Now, there ’ s a suit just fi led in my home state of New Jersey, a parent saying, “ The school ’ s failed my kid. I want to be able to take the money you spent on my kid and go to another school. ” Think of it this way: If an automobile company sells you a lemon car, they give you a refund and you go buy a car elsewhere. You don ’ t give the auto company more money. The same should be done with education. The government should say, “ If the school fails you, take the money and go to a school that isn ’ t a lemon school. ” Again, people aren ’ t going to think that ’ s a cutback.

This is what leaders have to do. Use a little imagination — fl anking movements instead of charting the machine gun. Bring in some artillery, bring in some air attack, and then we can beat them.

I believe that leaders need to go after the big things — health care, education, Social Security, taxes. If you win there, then you have given a real blow to the leviathan. Then you can start going after other things because you ’ ve established that there ’ s a right way to do things. People think they ’ re coming out ahead and that they are getting something. So don ’ t fi ght by the rules of the other side.

You can only win if you rewrite their rules.

Q: We grew up in a culture where we heard phrases like “ A penny saved is a penny earned ” or “ Put it away for a rainy day. ” Where did this culture change in the