THE ROLE OF GOVERNMENT

THE ROLE OF GOVERNMENT

Is this too big a topic for a small town blogger to attempt to address?  I’m not sure, are you?

This week’s Time Magazine had an interesting article discussing how to get control of deficits and debts.  The numbers discussed therein were informative.  I extract some below to make my point that we must fundamentally reconsider the role expected of government, national, state and local in our society.  Incidentally, I thought the Time article was “milk toast” and didn’t come close to a resolution of the issue.

There are about 300 Million people in the U.S.  I use that figure to calculate any per capita data below.  While not at all accurate (because I don’t know the number of “households” filing tax returns or the amount of taxes paid by a typical “household”), I suggest multiply any tax figures below on a per capita basis by four to get the dollars required for such a household.  Actual dollars required will be higher for such a household actually paying taxes.

Take the current planned deficit of $1.5 Trillion in 2011.  That amounts to $5,000 per person ($20,000 per household) in the U.S. simply to pay for that deficit, not the entire year’s budget.  If you are a family of four currently paying taxes of any amount, your tax increase would be $20,000 to zero the deficit.  To me that is a staggering number.

Looking from the “other” side, think what is required to zero the deficit through only spending cuts.  If we completely eliminated the Department of Defense for the year 2011 we could cut the deficit in half (eliminating the $750B defense spending).  No pay for any member of the armed forces or civilian officials in DOD, no payment of any sort to industry manufacturing everything from bullets to aircraft carriers, no money period for any defense related people, work or whatever.

After doing all of that, we would still have to pay (a household of four) an additional tax of $10,000 for the remainder of the deficit.  Do you have that kind of money available?  Of course not.

We could eliminate the Departments of Homeland Security and Education to save ONE figure to the right of the planned deficit making it ONLY $1.4 Trillion leaving citizens to offer up ONLY $4,660 per person, every person, to zero the deficit.

My point is very simple.  There is no way to achieve zero deficit spending in a given year with a combination of tax increases and spending cuts and still have a government such as we have today, again at all levels, nationally, state and local.  We simply do not have the money to support such government, now or in the future.

How and when did this kind of spending and increase in government start?  Look at any historical chart over our history and it is clear either as percent of GDP, per capita expense, actual dollars each year or any other statistic you choose.  It started and has continued essentially unabated with the New Deal in the late 1930’s.

Forget the anomaly of WWII on such charts.  That “spike” was caused by the war and quickly “reduced” back to the subsequent steady trend in excess government spending since around 1950.  Then look if you will at our current excess spending to “get out” or reduce the effect of the Great Recession.  Our current “spike” in that effort looks like excess spending in WWII AND with no end in sight in the out years.

Was the Great Depression worse that our current Great Recession?  Sure it was.  But the simple fact is that the programs put in place in the New Deal to mitigate the Great Depression were never eliminated long AFTER the depression was over.  They are now as much a part of our national ethic as “Mom and apple pie” and we simply cannot do without them.

But indeed we recovered financially from both the New Deal and WWII.  Then what did we do?  It is called the Great Society.  We took New Deal programs and trumped them at great expense.  Now our Great Society programs are imbedded in our national conscious and totally “untouchable” just like former New Deal programs.

The New Deal and Great Society are the embryos of our current entitlement programs that have now grown to be very large and voracious adults, gobbling up dollars along with everything else that government “has” to do.

Ah, you say as a liberal detractor.  If we had not fought those very expensive wars since 1950 we would be in good shape.  Take the total expense of the Korean War, the Cold War (a huge number for sure), Vietnam, Gulf War and War on Terror (Iraq and Afghanistan being a subset of the latter) and compare it to our current $12.3 Trillion debt.  Maybe, just maybe it would cut our current debt in half still leaving us woefully out of balance.

I leave it to others to argue the state of the world or America had we never fired a shot or put troops, equipment and industries in place since 1950 to be engaged militarily over the last 60 years.  Bring the troops home during 2010 from Iraq and Afghanistan and “fire” them all.  That still leaves us with a staggering deficit well over $1Trillion in 2011.

I take no political position for now over what a “rethought” government should look like, nationally, state or locally.  I only and passionately suggest that all of it MUST be very different from what we see and have today.

Face it folks, we still have around $2 Trillion dollars each year to spend.  That should provide for some kind of national defense and safety net for society.  Focus on those two alone and get government out of everything else for starters to budget that $2 Trillion dollars.  If anything is left over MAYBE we can still have an FAA to allow airplanes to fly safely.  OOOPS, can’t do that.  We still have to have Homeland Security for airline safety.

Maybe we should start with bicycle helmet and seat belt mandates!!  And God forbid, don’t rely on industry to manufacture life saving drugs without government control.

Make your list of “have to haves” all you like.  Just make sure it fits into the $2 Trillion per year envelope.  I won’t even suggest that part of the envelope must pay for the liquidation over time, a very long time, of our current total debt.

WHO IS TO BLAME FOR DEFICITS AND DEBT?

WHO IS TO BLAME FOR DEFICITS AND DEBT?

I am not absolutely sure exactly who is to be blamed for our current deficit and debt situation, are you?

After struggling with a lot of online data, tables, government reports, etc. I am only certain without any doubt that our huge debt, huge deficits and huge predicted growth in both over the next ten years are cause by one very simple dynamic.  The federal government spends more money than it “makes” and plans to do so in the future.

Of course that is not very enlightening. 

So ok, who has historically spent more government money than the government receives?  Wikipedia makes the following statement in that regard, “Since 1970, the U.S. Federal Government has run deficits for all but four years (1998-2001)contributing to a total debt of $10.6 trillion as of January 2009.”  It also notes that the federal debt as of January 18, 2010 is $12.3 Trillion, a $1.7 Trillion increase in just one year.

The question then arises as to exactly who or what has spent such money by borrowing it.

The answer is simply every President AND every Congress since at least 1970.  President Clinton in fact evidently spent less than made 4 out of his 8 years in office, which of course I applaud and acknowledge.  Oh that all had done that.  And of course how President Clinton was able to do in 4 years what no other administration has been able to do in 40 years is a different topic of debate and not applicable here.  He did in fact have a Republican controlled Congress each of those 4 years and economic growth was abundant as well.

Now let’s ask why each President has spent more than collected for the last 36 out of 40 years.  Well the first simple observation is that they planned to do exactly that in most cases.  7 Presidents and their associated Congresses purposefully put government spending on a credit card for a wide variety of reasons.   No combination of emergencies caused it.  It was methodically and for political reasons simply planned.

14 of those 40 years were Democrat and 26 were Republican White House administrations.  12 out of those 40 years were Republican controlled Congresses and 28 were under Democrat control.  A total of 4 years (Carter) plus 5 years (Bush) plus 2 years (Obama) for a total of 11 out of 40 years had one party control of both Congress and the White House at the same time.

I admit that last paragraph is a jumble of numbers and I have no idea how to draw any specific conclusions to lay the majority of blame at the feet of either party, the White House alone or the Congress alone.  My simple conclusion is that they all, each party, each White House and each Congress got us to where we are today as a result of almost 40 years of living on a credit card.

I challenge anyone to bore into the details of those 40 years of numbers and conclusively show the vast majority of the blame on any one party, Congress or administration.  I would also ask why waste your time in doing so.

Now let’s see where we have been and are currently planning say 2000- 2015

In doing so there is a very stark difference.  Both the annual debt increase and deficit from 2009 -2015 that is planned is at least twice the annual increase in both categories compared to the period of say 2002-2008. The actual deficits incurred by President Bush were around $500 Billion per year.  The planned deficits by President Obama for the current 6 year period is well over $1 Trillion per year.  I leave it to you to look up or calculate the total debt accumulation during those two different 6 year periods but it obviously will be around twice as much.

What is my point in all of this?  Well first I argue that our debt accumulation to date is a result of at least 40 years of profligate spending by all combinations of parties, Congresses and Administrations.  I suspect if we had had one party dominance for the entire 40 year period we would be somewhere in the vicinity of where we are today, plus or minus a few $Trillion. 

As a follow on to that point I question the blame game of who did what to whom in the past.  Essentially we did it ourselves by increasing entitlements, fighting wars, you name it.  Little blips along the way, good or bad, does not a mess make.  It is the cumulative effect across those 40 years that matters.

So my second point is why don’t we focus on the FACT of the current mess and figure out how to do something about it.

And I soundly reject any suggestions that we can fix the mess by “doubling down” to increase the debt increase and deficits by a factor of two each year for the next 6 years.

That to me is denial of the problem in the first place.  The solution to me seems to be to stabilize government income and dramatically reduce spending.  Cutting income and increasing spending are nuts as is increasing income slightly and dramatically increase spending as well.

To me that sounds like “President Bush left me with a mess (actually 6 Presidents did that) and I am going to ignore the mess and spend more because we NEED so many crucial things.”  That is sort of like saying “If you think I inherited a mess, just wait 4 (or years”. 

Look forward Mr. President, not behind and in doing so fix the biggest mess we have faced in the lifetime of our country.  Failure to do so will be more cataclysmic than losing the Cold War or even WWII.

CATACLYSMIC EVENTS

CATACLYSMIC EVENTS

 

I was born in 1942.  As I ponder today’s political landscape both domestically and globally I wonder how bad or good it really is as compared to other times in my now 67 years.  Specifically, I ask myself what is the most cataclysmic event or series of events that I have seen, heard about or read about in my lifetime.

I made a list of the “heavy hitters” that I could recall.  I started in 1950 just to pick an even number and leave out WWII and carried forward to 2000.  50 years of living in America and wondering how those years compare to what my children and grandchildren are facing and may face in the period 2000 – 2050.

Here is my list for 1950 – 2000                       Reduced list

Development of Nuclear Weapons            Development of Nuclear Weapons

Korean War                                                                       Cold War

Vietnam War                                                                 Great Society Legislation

Cold War

Civil Rights Legislation/Great Society

Medicare Legislation

Cuban Missile Crisis

Collapse of the Soviet Union

Here is my list (thus far) for 2000 -2050                                          Reduced List 2000-2050 

9/11 Attacks                                                                                       War on Terror

Iraq War                                                                                               Great Recession

Afghanistan War                                                 Proliferation of Nuclear Weapons

War on Terror                                                                     National Debt and Deficits

2001 dot com bubble bursting                                                    Energy

Great Recession

                                                                                                                Environment

Iranian Nuclear Weapons

Corporate Greed

Entitlement Programs

National Debt and Deficits

Proliferation of Nuclear Weapons

Energy

Environmental (climate change or whatever)

You of course may add to those lists but hopefully we can agree that the events above were/are in fact dramatic, again domestically and globally.

Now compare the two lists and follow with me my observations generally.  That last list is only 10 years in time but has more items on it (8 big events versus 13 big ones).  The number of wars is equal with again 3 big ones in 50 years and 3 perhaps a little smaller but still big ones in 10 years.   There were no events of really huge economic consequences in the first list (though of course we had the usual bumps along the road which few remember now) but the Great Recession certainly is significant now.  (Ok so I should take off the dot com bubble item as historically insignificant.

Certainly if we want to reduce the length of each list we could remove those smaller event such as Korea, Vietnam, Iraq and Afghanistan from each because they are indeed subsets of the larger wars, the Cold one and the War on Terror (or whatever politically correct term you choose to call it).  I shorten the two lists accordingly and we now have 3 really biggies in 50 years and 6 in 10 years.  Maybe we can simply blame that numerical difference on the difference in communications.  The more we talk, the more we worry.

Finally, certainly you may argue that Great Society Legislation was not cataclysmic in terms of “bad”.  But I hope that you agree that it was indeed a major event with very far reaching consequences, good or bad.

Now I ask that you pick the single most important, or biggest, or most cataclysmic event, just one mind you, for each period.  It of course is a judgment call and you may even put a different event not listed in so picking.

For me, I pick the Cold War and National Debt and Deficits as my two choices

But wait you say, without developing nuclear weapons we would not have had a Cold War and certainly not the threat of nuclear annihilation experienced during most of that 50 year period.  Hmm?  I wonder if the Soviet Union would have gone all the way to the English Channel during that period.  Again, a judgment call.  I also wonder how once the genie was out of the box such development could have been restrained.  I also wonder how France would generate electricity today (80% being nuclear).

You may as well consider the Great Society legislation as the most important given the Freedom provided for minorities.  Compare that affect however on a global basis.  I doubt that Europeans would care much about our social legislation as compared to holding Communism at bay.  Again a judgment call.

Many will say Energy or Environment is of greater concern than Debt and Defects.  I disagree.  If we are broke/bankrupt we cannot do anything about those two pressing concerns.

I’ll stick with my list and you stick with yours.

NOW, of the two most cataclysmic, the Cold War and National Debt and Deficits, which do you think (judgment again) had or will have the most profound effect on the American way of life and our position in the world.  Also consider the global consequences of no significant American influence in world affairs in the future.

For me the choice is easy.  In my view the National Debt and Deficits today are having and will continue to have the most far reaching and cataclysmic consequences of any event or series of event over at least the last 60 years and probably well into the future.  I won’t be here in 2040 to test my theory for sure.

And now you say, so what.  All the really biggies are important and we must do them all.  I don’t disagree that all need attention.  But, I follow; in what priority we should approach those issues.  Note I have already said that with no money we can’t do much environmentally.  You will say with all the money in the world when the ice caps all melt we are screwed.

Nope, I retort.  If the ice caps melt with no money to move to higher ground we for sure are screwed, like goodbye NYC.  But if we are flourishing economically we can sure as hell build big barriers to protect ourselves AND afford to move to higher ground.  Same with energy.  If we have no money and the oil runs out we are screwed and return to caves.  With money we can build a lot of solar panels and wind machines (or God forbid a nuclear power plant).

So, having gone through this little exercise; let me point out what our political priorities are today as articulated by national leaders.

Health Care?  Hmm, it is not even on the list.  AND even if it was on the list we have not done a damn thing except argue for a year.  If it is a real, cataclysmic preventing priority, why have we done NOTHING?

Great Recession?  Hmmm, all we have done so far is increase the Debt and Deficit AND with absolutely no plans or even much creative thinking of what to do about them AFTER (which we eventually will) we leave the Great Recession behind us just like the Great Depression.  Economically all we are doing is building arguments for the November 2010 elections.  Now THAT is really deep and big picture thinking like leaders are supposed to do.

Finally, look at our approach to the Cold War.  We were generally united as a country and every single national leader did his or her best to do everything possible to protect America and our allies during that 40 year period.  Trillions of dollars, millions of people, all in agreement to do whatever it takes to limit the consequences of that war and ultimately prevail at the end.

Are we doing the same with the Debt and Deficits (or environment or energy or whatever) today?  Na, we just argue and do NOTHING and indeed have no sense of priority of which windmill to attack first.

I rest my case.

OOOPS!

OOOOPS!

 

Words do make a difference and teleprompters can lead one astray as evidenced by President Obama’s mispronunciation of a military title yesterday.  I do not write this to make fun of the President.  I observe a more fundamental issue in this case.

Three times in a speech praising American military personnel in their humanitarian support in Haiti the President identified one sailor of Haitian descent as noteworthy.  The young man was a navy “medic”, highly trained in all sorts of life saving procedures.  They are called corpsmen.  The title is pronounced as if it was written as “coremen”, like say an apple core.

The President referred to him as a corps man, sounding almost as if he were saying “corpse man”.  He did it three times during the speech and Hannity ran the clip three different times on Fox News last night, gleefully.

Obviously the President is not familiar with the intricacies of military jargon including the various “ratings” as they are called in the Navy.  Equally obvious was that the word was correctly spelled on his teleprompter and he simply mispronounced it.  And of course I am sure the President’s military aid was waving frantically in the back of the room when the President misspoke or at least was shaking his head in dismay when he heard it.

Frankly, it is not a big deal to me except for a few observations.  The White House press office has made no comment about the incident and seems to want to ignore the mistake.  Wrong approach in my view.  A quick acknowledgment of the mistake should be made and a simple apology to the corpsman offered.  No great bowing of the waist or wringing of hands, just a simple Opps, sorry is all that is needed.

Privately, some Presidential handler should get his or her ass kicked as well

The President is a tremendously good speaker and I could care less if he uses a teleprompter.  His charm and charisma on TV is dramatic and he can never be criticized for his passion in that medium.  More power to him, I say.

BUT, he is the Commander-in-Chief of all military personnel and needs to demonstrate fundamental understanding of whom and what they are.  I am sure he will never again mispronounce that word again but there may well be other details of military service commonly known to many but with which he is not familiar based on his experience.

He needs a steep learning curve in such matters.  Maybe a few basketball games on several bases and lunch with the troops in the mess hall (it really is clean there Mr. President and all your handlers) might help.  And God forbid attending a military funeral or other significant event dominated by military personnel without extraordinary efforts to get the words correct would be a great error.

Hannity’s gloating was absurd but mainstream media ignoring the mistake is also wrong.  Given his politics the President needs hard work to gain and hold the confidence of the military.  A simple mistake such as this one can have major consequences, particularly if he tries to duck the issue.

AFTER TAXES ARE RAISED

AFTER TAXES ARE RAISED

 

After raising taxes as I recently proposed in http://ansonburlingame.wordpress.com/2010/02/01/tax-hikes-i-support/ the following is what I would do next.

Pass a law (or constitutional amendment if required) requiring the federal government to produce and adhere to a balanced budget each year just as is done by state governments.  Just do it.

Pass a law (or again an amendment if necessary) giving the President a line item veto with a 2/3rds majority vote in both houses of Congress to override such a veto, line by line, one vote each veto.

Provide a loophole to allow deficit spending in presidentially and/or congressionally declared emergencies.  Hurricane Katrina comes to mind as an example.  Require such proposed deficit spending to be passed by again both houses of Congress with a 2/3rds majority and of course signed in agreement by the President.

Then require that such deficit spending in that year be paid in full either in a balanced budget the next year or by tax surcharge passed with the same 2/3rds majority vote in Congress and signed by the President.  No other options.  Pay it out of the next year’s budget or tax surcharge the next year.  But pay it, the deficit, in full and within a year of its authorization.

Leave everything else the same, for the time being the same.  Each year if the President and Congress want to raise taxes on Americans let them do so as now procedurally allowed.  If they are crazy enough both politically and fiscally do to so, let them have at it.  With enough political clout they can still turn us into a socialist state.  The only restriction would be a pay as you go state, no credit cards to achieve that goal.

If that is what Americans want let them have it.  In the meantime we avert an ever encroaching disaster with our current fiscal policies and laws.

DYSFUNCTION

DSYFUNCTION

 

Eugene Robinson, a liberal columnist for the Washington Post wrote in a Tuesday op-ed, “Our political system suffers from many problems and may be bordering on dysfunction.”  I agree with him, do you?

The federal government is “living” by putting 40% of its budget on a credit card each year with MAYBE some slight decrease in a few years in the size of the deficit.  The anticipated interest only payment on the national debt is estimated to be about $840 Billion each year in the near future.  If we try to amortize the debt to reduce it even slightly, starting say 10 years from now we will spend over $1Trillion each year in doing so.

And that friends and detractors is only one of our “many problems”.  Try health care, energy, educations, war, as “other problems” in that mix as well.  It simply boggles my mind to try to grasp the scope of our problems.

Now how about solutions to any or all of them?  One size says spend more for now and hope to reduce that spending in the future.  The other side says stop spending now regardless of the consequences.  If those are not dysfunctional positions that will never reach agreement, I suppose I simply don’t have a word to describe them.

If I had a loan from a bank or a loan shark or anyone in between and I borrowed more money to pay the interest only on the previous loan how long before I would lose my house or get my legs broken?  And I am not talking movie money or money for TV’s, I talking about credit card purchases (or bank loans) at 40% of my total spending and almost equal to my real income.

There are some 450 representatives in Congress and 100 Senators.  Each and every single one of those individual members may scream about spending and each and every one of them (OK only 90% of them) will load up a bill with nickel and dime “earmarks” absolutely needed by their constituents on each and every fiscal related bill.  Is that dysfunction?

Oh, my detractors say, those earmarks are insignificant in total dollars.  I agree that $5Billion is a paltry sum today.  But it is the mindset of take from the other guy and leave mine alone that prevails in any spending debate.  Is that dysfunction on all sides?

It has been within my lifetime of 67 years that our federal budget moved from millions to over a billion dollars.  How long ago was it that the same budgets went from billions to over a trillion dollars, maybe 15 years ago perhaps, maybe 20?  How long before we will measure budgets in quadrillions or whatever comes after trillions?

I have emailed Mr. Robinson agreeing with his statement quoted above.  I also asked him how he, me or many others could address and fix the dysfunction.

Any sane ideas out there?

TAX HIKES I SUPPORT

TAXES HIKES I SUPPORT

I am sure that I know how to construct a budget, can you?  I am also sure that I have great difficulty following such a planned budget, do you?  And finally, I know for sure that I will never budget with any sense without a planned budget.

That lead in of course sets the stage for a discussion on federal budgets, spending, deficits and debt.  The first part is easy and hopefully not controversial.  A budget looks at expected income and spending and balances the two.  Income should equal spending, right, even if part of the income is a loan.

President Obama’s administration has just completed that budget task.  He submitted to Congress today a budget that predicts federal income in 2011 at about $2 Trillion and federal spending at about $3.8 Trillion.  Obviously he intends to borrow $1.8 Trillion to balance that budget. 

Now who knows what Congress will do?  Argue a lot for sure and probably when all is said and done their budget back for the President’s signature will only vary slightly in the numbers to the right of the decimal points.  A little more income through taxation, MAYBE a little less total spending, and a corresponding small reduction in the deficit.  And of course all of that will only be predictions, not reality of what will happen in 2011.

About 9 months of political rancor to produce a prediction and plan. And the plan/prediction will only drive us much deeper into a fiscal hole nearing the impossibility to dig ourselves out.   Holy Cow!

Contrary to the cries of liberals, I am a conservative that believes that raising taxes (or fees) is required to get control of this fiscal mess.  I address those suggestions below.

What causes the biggest part of the deficit?  The President says medical costs are the culprit.  OK, let’s address medical costs beginning with Medicare. 

Obviously the income TO Medicare is far less that the spending on health care for disabled and those over 65.  No one wants to reduce the benefits provided so let’s talk about raising the Medicare income.

Everyone receiving Social Security and Medicare pays for their medical care in the amount of about $96 per month deducted from Social Security.  The millionaire and the pauper both pay the same.  Why, I ask.  We have a progressive income tax, why not a progressive Medicare tax or payment according to the means of those paying.

Obviously the pauper can afford the current payment simply because it is being paid.  They won’t default on that one as long as they get SS.  So use that as a base and start raising the Medicare deductions from SS by a large amount depending on the means of the individual.  Maybe the millionaire should be paying say 50% of his/her SS into Medicare.    Argue the percentage as you like.  It is the principle I am addressing here of means testing payments to support Medicare.

Obviously “Obamacare” has identified huge saving by greatly reducing Medicare Advantage.  Well go ahead and do it now, right now and don’t wait.  One simple bill saving $100’s of Billions at one swath.  Even Republicans should vote for that one.

VA medical benefits are essentially free regardless of income again.  I know friends on VA care with lots of money and they have not cheated or gamed the system.  They qualify for the care based on their service related injuries.  Why should they not pay a portion of their VA or military retirement benefits to contribute to that care?  In terms of cost to the individual, one size should not fit all.

Now let’s look at SS.  It is not creating deficit spending for now but soon will do so.  Let’s fix it now before the crash comes about.

Payments into SS come from employers and workers, one half each.  Want to create jobs then stop any employer contributions to SS and make the worker, the ultimate beneficiary pay the whole amount.  The employers can and should be forced to use that extra income to create more jobs.

No one making over about $106,000 anything towards SS above that amount.  Why?  Why should not the person making say $200,000 pay more money into SS and why again should his employer pay anything in to it.  Tax all salaries, regardless of how high they may be and take all the tax out of the salary.

One of the reasons employers and employees like bonuses is that they pay no SS tax.  Why?  Fully tax all bonuses regardless of amount at an INCREASED rate for both SS and Medicare.  Make it big and make it hurt.  The recipients cannot argue they need bonuses for subsistence.  That is what salaries are for.

No politician today can survive by drastically reducing SS or Medicare benefits to meet income.  They must increase the income to some degree.  Why not collect the income from those that benefit now or in the future from the government spending.  We have a social and moral commitment to SS and Medicare.  For now no one will change that commitment.  So raise the income to meet the expense and do it for those receiving, now or later, the commitment.

Now go back in my blogs to PAYING FOR IT written in 2009.  Reduce the deficits using the above new taxes then balance the budget with real income meeting real budgeted expenses.  Anything else goes into that year’s deficit which in turn would be paid for next year AND IN ITS ENTIRETY by income surtax, each and every year there is a deficit.

Then watch the deficit plummet and politicians run for cover.  And the liberals that scream for more spending will be right behind them.

WHAT’S THE SCORE AND WHO CARES?

WHAT’S THE SCORE AND WHO CARES?

 

Duane Graham wrote a blog entitled “HOUSE REPUBLICANS NO MATCH FOR OBAMA”.  Having now read and studied the transcript of the meeting between the house Republican caucus and President Obama, I couldn’t disagree more.  But so what.  This is not the Super Bowl, it is governing America.

Go to Duane’s blog and read it.  The go to his link and download the transcript of the meeting.  Read and study that document point by point.  Then decide for yourself who won or lost.  Below I focus of some of the issues addressed and the differences discussed.

The total transcript is 14 pages long.  In my view, if you watched the SOTU speech by the President you can skip the first three pages.  It is just a shorter version of the SOTU speech.  The “meat” was in the exchange of views between Republican representatives, respectfully expressed, and the President’s replies, equally respectful.

JOB CREATION

Per the SOTU the President is proposing a tax credit for small businesses to create jobs.  Now read the front page of the Globe today and hear the reaction.  It boils down to this simple point.

“We (Joplin small businesses) hire people when there is work to be done.  No work, no jobs.  In fact not enough work for some to even have to pay taxes.  Giving us more tax return money does nothing to cause me to hire workers.  I have to sell stuff to create jobs”.

Now there is a common sense rebuttal to the tax credit proposal as it relates to job creation and some of the congressmen alluded to it with no reply from the President.  He went elsewhere.

Turning to the stimulus bill of last year one congressman noted, “Mr. President, Republicans offered a stimulus bill at the same time (as the Democrat bill).  It cost half as much as the Democrat proposal.., and using your economic analyst models, it would have created twice the jobs at half the cost.  It was an across the board tax cut, Mr. President.”

You must read the transcript to get the full Presidential reply and I only use a portion.  In essence the President said that he would not support a tax cut for “Warren Buffet” or “bankers”.  WELL, my question is WHY NOT if it creates more jobs at less cost than his proposal that was rammed thru congress.

The President went on to say that large tax cuts were further creating havoc in deficits and debt which of course are huge issues.  I agree EXCEPT you can reduce the size of government and its power to reduce the size of deficits and debt.  In fact that is really the only way to do it.

This President will NEVER agree to substantially reduce the size of government.  He firmly believes that government is our only safe haven from the ravages of private people.  Without substantial government control Americans will tear themselves apart leaving many behind in terrible conditions.  It is worth the cost of government whatever it may be to prevent that from happening.

Republicans believe that government should provide the minimum of protection needed to preserve order and common sense (theirs not liberals).  Get government out of the way a la the first what 175 years of our existence of a country, and the people will take care of themselves.  Want to create jobs then get government out of the way is their call.  The President fundamentally disagrees.

I am not arguing who is right or wrong, just pointing out the difference of views, radical difference.  Now you go score the winner or loser in that exchange depending on your views.

I give Republicans a score of at least 80 to 20 over the President on this issue.

GOVERNMENT SPENDING

Now this exchange, while very polite, was stark.  Read the words carefully.  I have added my own underlining to some quotes.

A congressman said, “The spending bills you’ve signed into law, the domestic discretionary spending has increased by 84%.”

The President essentially said (you have to read the transcript) that such spending was driven by legal requirements in law as a result of the recession.  Increases in unemployment, etc drove such expenses.  He implied that such increases were a congressional mandate and he had no choice.

The congressman closed the discussion by saying, “I would simply stipulate that automatic stabilizer spending is mandatory spending.  The discretionary spending went up 84%”

The President replied, “We’ll have a longer debate on the budget numbers, all right?

President 0 Congressman 100 on that one.

The same congressman then pointed out that a bipartisan bill has been proposed by him and Senator Feingold to provide for a constitutional amendment to allow a line item veto by the President on budget bill.  He asked the President’s view of such a bill.

Again, you have to read the reply.  BUT in my view the President was lukewarm on such a bill to establish a line item veto (“I’ll look at it”).  He then turned around and said that Congress bore the blame for loading up the bills and congress should do a better job.

He also said that earmarks were strictly a Congressional problem (which they are without a line item veto).  He again challenged congress to fix the problem.

Does that sound like passing the blame, all of it, on Bush?  He (Bush) or you (Congress) made/make me do things I would never do.  How much longer can he use that passing buck?

President 0 Congress 100

NUCLEAR POWER

The President now “supports” building more nuclear power plants.  Great.  Where is he going to propose to put the waste?  THAT is one of if not the greatest hurdle for the nuclear industry and HE, the President, has zero funded Yucca Mountain and shut it down.

President 0 Congress 100

This is getting too long so will only summarize some of the other points.  The President supports cap and trade to reduce climate change affects.  Republicans say no, jobs are more important now and cap and trade restricts a major jobs industry.

President 30 Congress 70

President is trying to get rid of lobbyists but is having a hard time. 

Pres 80 Congress 20

HEALTH CARE

I’ve heard it all and went to sleep reading this part.  Both get 50/50 in NEGATIVE numbers from me.  EVERYONE HAS SCREWED THAT ONE UP.

IN SUMMARY

I don’t bother to add up all the scores. It is really not important.  To me the Republicans made better points and a lot more sense.  But that is me and my conservatism.  Duane will score it much differently.

But whatever your position, liberal conservative or whatever (other than I don’t give a sh..) it was a good exchange.  We need more of them and they should be held very publicly.  I for one will watch, listen and read carefully.

CONFUSION AMONG DEMOCRATS

CONFUSION AMONG DEMOCRATS

Another interesting observation from the Washington Post.

“A day after President Obama called on them to renew efforts to pass his ambitious agenda, congressional Democrats remained in disarray Thursday about how to move forward, with at least some pointing at the White House as the cause of the legislative standstill gripping Capitol Hill”.

I would be confused too if I was a Democrat.  Full speed ahead, all stop, right (the rudder is already left) full rudder, or what?  This is going to take some time to sort out.

It is pretty clear to me that the President intends Full Speed Ahead except, maybe, with health care reform where he said “You guys figure it out” or something like that.  The rest of his speech was the same agenda that he proposed a year ago with economy, energy, education and health care in the same place with the same intentions.  “I won’t quit” also means I won’t change my agenda including adding to it like maybe war and terrorists.  Nope, they don’t deserve mentioning.

I also agree that if I was a Democrat I would point my finger at the President.  Take health care for example.  He instructed Congress to create a bill with only very, very broad guidance from the White House.  Here is what I want, he said, now go make it happen.  The result was a 2000 page instruction manual on making sausage, almost every single page written only by Democrats.

The President said, OK; now pass it so I can make a big speech in January.  Opps.

Democrats have the largest majority in both houses of Congress in decades.  They should be able to pass anything they want.  Opps, again.  Too many Democrats disagree.  So nothing, again nothing, gets passed.  No folks, let’s all blame Republicans for that failure.   Am I missing something here?

Oh, of course, I forgot about the filibuster thing.  One election in one small state causes one vote in the Senate alone to change and now real turmoil reigns.  OK, blame Republicans for winning an election for the first time in 50 years and now we are really unable to govern according to Democrats.  Let’s just forget that both parties have governed for about 150 years with that terrible filibuster thing around.

So here comes our courageous Nancy saying we will continue to govern on our principles.  Great, I wish all politicians did that.  But I ask her, which ones, which principles do all Democrats follow?  Obviously not just her’s. 

There are all sorts of principles upon which Democrats cannot decide to stand like, public option, cost controls (no, that’s not right they are against those controls because it is not in the bill), abortion, taxes and fees and a few other “principles.  It is just too hard to sort out all those principles I guess.

How about the principle of big government or limited government.  Now those are two big principles and Republicans know exactly where they stand, on principle.  It is limited government.

Democrats want BIG government but just not too big, at least for some.  Republicans standing on their principle of limited government stand united.  That is a constant in this political debate.  They are doing exactly what Nancy, sweet Nancy with her wonderful smiles and “bounciness” during Presidential speeches (Opps, Democrat Presidents only please) advises.

So back again to the confusion.  Go up to around 10,000 feet and view the political landscape over the last year.  The only thing that Democrats have really done is spend around a Trillion dollars on “stimulus” and bailouts.  And thus far that has failed miserably.  The only car company not getting a bailout, Ford, made some big money last quarter and projects even more this year.  Hmmm.  Wonder how GM and Chrysler are doing?

So rally round, Democrats.  We are going to save $15 Billion (Opps, next year not this one) while we spend around $200 Billion more on stimulus things (for a net spending increase of some $185 Billion) while we slash postage stamps or something in the Department of Whatever.  Stay with ME, the President said, because America has great ideals that demand that MY government do more and more.

I actually thought American ideals started with Freedom, liberty, and things like that with hard work by individuals producing an ever increasing abundance providing more opportunity for ALL, not just Acorn.

So Democrats, which principles do you stand upon, Big government or limited government, equality of opportunity or equality of outcome, high taxes and big regulation or let private industry do what it does best, and in fact is the only thing that can make the economy grow?

As a conservative I know exactly where I stand and as a liberal I think Duane Graham feels the same way.  It’s those wishy washy Democrats in Washington that are confused.  I’m not and neither is Duane.

Finally, as I suggested beforfe, Duane and I could go into a room and do some governing despite our stark differences.  I am bigger than he is and a lot better looking, but would still “give him” some things he wants.  He on the other hand yells much louder than I do and would in turn “give me” some of my things.  Why can’t Washington politicians?

Didn’t Massachusetts voters say something like that?

DEBT, SPENDING AND CASCADING TURMOIL

DEBT, SPENDING AND CASCADING TURMOIL

 

In a Wednesday, January 27, 2010 editorial the Washington Post said, “Lawmakers and presidents don’t like to increase revenue or decrease spending. But the alternative is cascading debt, declining standards of living and an end to American leadership in the world.”

Simple, concise and to the point.  Does ANYONE disagree with that statement above particularly the last sentence?   If you don’t agree I would be interested in why you take that position.  I need a good laugh.

Let’s take just the declining standard of living issue.  For sure no one wants to live with less.  Many want more, much more in some cases.  But if the “more” costs the government money, thus increasing the debt how do you break the current cycle of spending and debt accumulation by the federal government.

Well, the answer is simple to me.  If you want “more” go get more money to obtain it.  Do it on your own and not at the behest of government.  You get “more” and the government spends less.  How much less you ask?  Well let’s start with around $1.3 Trillion a year by government.

Now that restraint on government spending does NOTHING to improve your standard of living.  In fact if you are on the government payroll either in jobs or entitlements your standard of living MIGHT go down depending on where the government makes their cuts.  But for sure no one’s standard of living improves yet.

The best figure I know of that measure the wealth created in America is Gross Domestic Product.  If it grows it reflects a growing economy with the tide lifting all (OK, some more than others, but still lifting everyone).

Let’s take the period 2000 -2008.  GDP went from $9,951 Trillion to $14,441 Trillion, an increase of $4,490 Trillion or 45% over those 8 years.  Of course in 2009 the economy went into the tank and we had negative growth.  Forget for now whose fault that might be.

It should also be noted that we had a “dot com bubble bust” with markets and growth reeling for a short time.  Yet in every one of those years GDP went up, even in 2001.  Wonder how that happened?  You know as well as I do.  We cut taxes and stimulated growth and GDP was like the Energizer Bunny.  It kept on going despite a momentary setback.

Bottom line and as pointed out in the Post comment above, if GDP keeps going up we all the people remain in good shape.  Drive it down and all hell breaks loose.  Good positive GDP growth and unemployment oscillates around 4-5%.  GDP drops and we have 10% unemployment or thereabouts just as an example.

Now let’s talk about what makes GDP grow.  Well first we must ask what creates GDP in the first place.  The answer is simple and is called PRODUCTION of goods by labor like houses, cars, refrigerators, cruise missiles and providing services (house cleaners, waiters, cooks).  Produce more and GDP goes up.

Now, who exactly are the producers in America?  Well it sure isn’t government.  Government produces NOTHING but laws and regulations which are not edible.  We must look to non-government organizations to PRODUCE things, even things for government like bombs and tanks.

Are we in agreement so far?  People produce things; governments do not produce anything edible.

Now for sure government can greatly affect the growth or decline of GDP.  It does so by encouraging industry to produce more “stuff” or, usually by mistake, limit industry’s incentive to produce through taxes and regulations.  Would you agree that with no taxes and no government regulations industry could grow unrestrained or restrained simply limited by the available manpower and material supply?

Here we go again.  No government restraints and we have unlimited (in a production sense) freedom.  But of course without government restraint it becomes dog eat dog or anarchy.  So sure we have to have some restraints.  How much is where the argument gets heavy.

But don’t forget, if you want your standard of living to grow, GDP must grow and whatever constraints on GDP (or production) are levied by government the slower your living standards will increase or even the faster they will decline.  I wonder if there is some economic law that can back me up on that statement.  Probably not because most economists are liberals!!

Now here is another big government influence on GDP, perhaps it’s biggest.  Government can regulate to DISTRIBUTE GDP.  Today there is a $14 Trillion GDP pie and government can cut it up any way we the people allow it to do so.  Take a big slice of GDP away from the rich and give it to the poor is a simple example.  Government does that all the time in the name of achieving equality where eventually everyone gets an equal slice of the wealth.

Hmmmm?  Isn’t that what Marx and Lenin and others proposed to do?  Didn’t seem to work very well did it.  How about socialist Europe.  OK they seem reasonably content.  Now would you like to compare their growth in GDP under socialism to ours in a capitalistic society?  Not even close do they come.

Never forget friends and detractors, the more government takes out of the GDP pie or the more it distributes it, the slower the growth.  If you want growth then government should get out of the way.

Take a simple example such as seat belts.  Government mandates that we have them in all cars now, thus all cars cost a little more.  Government does that for safety.  Would you rather have government imposed safety or a choice when you buy a car to have seat belts or not and save $50 on the car?  Keep doing that kind of stuff and you soon began to talk about big money. 

Hell if government really wants us to be safe they could mandate that no car in the US go faster than 55 mph.  I bet some liberal already thought about that one.