Posted tagged ‘balanced budget’

A Real Third Party Candidate?

March 29, 2012

In today’s Wall Street Journal, Mayor Michael Bloomberg, writes in an op-ed column what the Presidential standard bearers of both parties should be saying.  We need a clear economic agenda which combines some tax increases, some spending reductions, and a healthy economy.  Whoa, that was simple.

Bloomberg believes the Bush tax cuts should be allowed to expire.  He says they should expire across the board for everyone.  Bloomberg rightly points out that fixing the deficit is everyone’s task.

He is less prescriptive about entitlements and other government spending but points to Simpson-Bowles as a good starting point.  An op-ed column is not long enough to include  a lot of detail.  Just the same, detail is important.   In this case, Bloomberg’s column asks the reader to make that point to the Presidential candidates.

The thrust of Bloomberg’s message is that by laying out a long term deficit reduction plan business leaders will see in the plan some certainty about the future.  Bloomberg likens that reaction to business’s reaction when Bill Clinton raised taxes.  There was an explosion of business activity rather than the anti-tax crowd’s prediction of doom.

A booming economy coupled with Bill Clinton era rates would bring in a good deal of tax revenues.  Coupled with sensible changes to the spending side of the equation would begin the process of getting things back under control, implies Bloomberg

What exactly to do about health care or social security or spending upon the infra-structure are details not found in Bloomberg’s column.  We are left to guess.

But can you imagine what a race this could be with President Obama, Governor Romney, and Mayor Bloomberg all running?

The Center in 2012

February 9, 2012

Rick Santorum’s great hat trick in Minnesota, Missouri, and Colorado has pundits once again questioning whether Mitt Romney can actually secure the GOP nomination,  I think these worriers are just spinning events to bolster their own lack of enthusiasm for Romney.  Santorum percentage were impressive but it appears from the turnout that these caucuses were held in phone booths.

Mitch, Mitch, Mitch, Mitch, Mitch.

Can you hear the faint but growing cry for someone other than the current crowd running for the GOP nomination?

Unfortunately Mitch Daniels or any other Republican candidate will be saddled with the GOP base’s thoughts and dead end positions on campaign issues.  These are demographically losing issues.  If the GOP candidate steps back from issues such as repeal of Affordable Health Care Act, sensible tax increases, or moving towards comprehensive immigration reform and full repeal of DOMA will take the steam out of the GOP base with the likely outcome of a low voter turn out.

But these are the wrong issues anyways.

The Center, however, is uniquely positioned to focus an agenda of just three issues

  • Health Care
  • Defense Spending
  • Defining a Path To Fiscal Soundness

That is correct, just these three.  Medicare, Medicaid, taxing the rich, energy independence, and social security are just sub sections of these issue.  If we get these big issues right, we can find solutions to the rest.

Health Care is the most dangerous disease facing America.  It is too costly, access is often an issue, and its quality varies across the country.  Fixes to our current (or previous) health care delivery must increase access, lower costs, and ensure that quality does not deteriorate (and preferably improves).  There are at least a dozen countries that have adopted alternative health care delivery systems that are superior to the US method.

The Center should reject out of hand the rhetoric of any candidate that says he is for repealing the AHCA unless he first proposes a plan that accomplishes the goal of improving access, lowering cost, and keeping (or improving) quality.

Failure to fix health care will in time bankrupt the country after having first bankrupted the middle class.  Offering a fix that provides excellent care to the wealthy and poorer care to the rest is not an American solution.

Current defense spending cannot logically be about defending America.  The US spends more than all other countries combined.  How can one country have so many enemies?  When one looks at where the Defense budget is spent, one gets a hint at a troublesome fact.  The defense budget is spent in all 50 States and major development projects utilize sub-contractors who reside in the far away districts of Congress members needed to pass these appropriations.  Defense spending is in fact government welfare for corporations and stimulus spending for States.

The issue facing America is “on what basis” should we use to reduce the $900 billion budget?  There must be in this $900 billion very necessary defense programs and throwing the baby out is not our goal.

The Center should call for a reconciliation of who gains from defense spending and who is actually paying for it.  Clearly the jobs provided by defense contractors are valuable and cuts must be done sensibly.  The issue is that if defense spending serves as “pork” in a political process, it will never get cut.

Candidates who shout “we cannot desert our Israeli friends”, or “we cannot ignore the rising China threat” are pandering and cannot be counted upon to bring reasonableness to defense spending.

Defining a path to fiscal soundness.  The Center is the most unencumbered position to demand a path to fiscal sanity.  The realities are that once a decision is made to cut government spending, someone or someplace is going to receive less money.  In our economy it will take time for resources to shift and replace the lost economic stimulus.  With a deficit of $1 trillion per year, it will take time for the economy to replace the contribution of this government borrowing.

What is needed is a plan which takes the country back from the edge, provides greater control for the future, and leads us to a balanced budget.  To accomplish this objective, the US will need purpose, focus and time.

Candidates who say “I will create jobs” or “I will cut the size of government” also have a bridge you can buy.  Unless our candidates address health care and defense first, there can be little hope that proposed fixes to Medicare, Medicaid, or Social Security will be sustainable or perceived as fair.

The Center does not need the solutions.  It needs to channel the political rhetoric towards a fuller explanation of the real problems and a pragmatic way to make fundamental change.

I do not see any Republican candidate offering this approach.  And frankly, unless hounded, I do not see President Obama discussing Health Care, Defense, and the Path to a balanced budget.

The Center can insist, however, and in a year where

 Mitch, Mitch, Mitch, Mitch, Mitch.

is likely to grow into

Mitch, Mitch, Mitch, Mitch, Mitch.

there just may a chance to steer the conversation towards common sense.

Let’s Vote Now

September 17, 2011

This may be a little rash.  Never the less, I am asking why don’t we hold the Presidential election right now.  I don’t mean just the Presidential piece, I mean every Congressional office too.  Why you might ask?

The current crowd is not going to produce anything in the next 14 months.

There are two pieces of legislation of any consequence kicking around Washington.  One is to be the handy work of a “super committee”, a euphemism, I think, for highly indebted to special interests and long tenure.  The supers are charged with the task of finding the next chunk of deficit reduction opportunities.  Success will mean the US has a chance to travel a different path than Greece.

The other job has fallen to Congress itself.  The House must begin with taking up President Obama’s jobs plan.  Jobs are important, maybe even number one priority, Republicans say.  But Obama’s plan?  The GOP thinks it is a poor substitute for their jobs plan.

The two subjects have one thing in common.  President Obama has proposed changes to the tax code that would in effect raise taxes on the top earning 2% of Americans.  No way says the GOP.

So the country is looking at grid lock for the next 14 months.  The President’s job plan which should more accurately be called the “least expensive” palliative care for the economy, won’t see legislative action.

The super committee’s deficit reduction proposals will also never come before Congress either.  Automatic spending cuts will kick in, and that will be a hollow victory for anyone who cheers.

The issues should be clear as a bell.  The GOP favors deep cuts in Medicare/Medicaid and Social Security, and no increase in taxes.  The Democrats favor modest spending cuts but nothing dramatic to either Medicare/Medicaid or Social Security, and any cuts accompanied with tax increases.

With respect to jobs, neither party has a clue since they are not addressing the underlying issues behind unemployment.  The GOP recommends cutting regulations and lowering business taxes while the Democrats propose government funded infrastructure investments and palliative measures like unemployment insurance extensions and payroll tax holidays.  No fundamental improvement to the jobs picture will come from either approach.

If anyone is reading the newspapers these days, they will have read that housing foreclosures have begun to pick up again.  In certain cities and certain States the figures are astounding.  Office space is also begging for renters in these locations too.  Forget about the home or office building sectors to rebound anytime soon.

I just wonder if those “job creators” who deserve no tax increases, will be bringing back the call center jobs from India or the manufacturing jobs from China soon.

The current recession has highlighted a fundamental weakness in US pay.  The middle class has essential not seen increases to its real wages in 40 years while Wall Street and senior business executives have done quite well.  This means that as employment improves and the unemployment rate decreases, the economy will not feel so robust.  Recovery will take much longer than either party is predicting.

Back to the original point.  Let’s vote now.  The outcome will make little or no difference with respect to balancing the budget, lowering unemployment or creating new jobs.

If the GOP wins, then, in my opinion, it will be just a short matter of time before Americans realize (again) that this party is not fit to lead.

If President Obama wins, Americans will be just as disappointed in the economy and will say, I knew he couldn’t lead.

The faint hope is that in four years both parties could nominate a new breed of candidate.  These candidates would totally ignore or disavow the social conservative voices or the wildly liberal ones.   These candidates, instead, would focus on economic fundamentals and key areas where Federal investment actual can positively impact the economy.  They would come with a clear vision of how to achieve a balanced budget employing a balanced tax and spending cuts combination.

So I am in favor of voting now so we can get the clock ticking for the Presidential election four years after that.

The Beauty of Paralysis

September 15, 2011


We often read that the best US government is a divided one.  Congress controlled by one party and the White House by the other.  The very best divided form is one where a veto will stand.  The rationale is Congress can do no damage.

Partisans, of course, see control of both Congress and the White House as the best form.  This is fine except when the opposition happens to hold that control.  Then even partisans opt for deadlock.

On the surface it appears the government is deadlocked today.  Even though the Senate is Democratically controlled, there is not a veto proof majority.  So in effect Congress has become a non-factor.

The best days for paralysis are days when the sun is shining and the economy is humming along.  That does not describe current events even remotely.  Never the less, paralysis might still be the best medicine.  Why would that be?

One must look under the leaves for an answer.  With the passage of the Affordable Health Care Act, one of the major moral errors was corrected.  Denying insurance coverage due to pre-existing conditions has been eliminated and while there remain plenty of Health Care aspects that can and should be improved, they are unlikely to happen unless the overall system is revamped.  So what are the really crucial issues facing the government?

The deficit?  The economy?  And what exactly can the government do about each?

The deficit is mainly the product of two forces, healthcare costs (Medicare and Medicaid) and a broken tax code (thanks to millions of special interests).  The economy is weaker that it was 5 years ago and seems to be floundering (with 9.1% unemployment).  The economic slowdown has spotlighted the lost buying power of the middle class.  This loss of buying power did not just happen.  Rather it is the result of a slow growing cancer of greed where the spread between the rich and the poor has grown the past 40 years.

So why is paralysis good?

The current state is so compromised by special interests that sweeping changes will just not come.  Paralysis will allow health care costs to continue to rise for everyone.  These costs will continue to take a larger and larger bite out of the family budget.  American businesses will continue to opt for low cost manufacturing locations (mostly off shore) and more and more Americans will be forced to take employment at lower wages and benefits.  The wealthy will cling to their tax loopholes and deny any future adverse effects.  Middle class buying power will continue to shrink.  And then what?

The bottom end of the “wealthy” category will begin to get sucked into the middle class.  These “job creators” will realize there is no need to create any jobs because demand is below the radar screen.  Less regulations and lower taxes won’t make any difference (as it never did before) for these ‘jobs creators”.

The country will jerk hard to one party and then to the other seeking more sweeping solutions.  People will long once again for the paralysis.  I guess this is why horses run back into their burning barn.

It doesn’t have to be this way.  Our politicians could end their reliance on special interests.  Special interests could recognize the corrosive damage they are inflicting and see its counter effects.  The real health care industry (doctors and hospitals) could take back their futures from for profit insurance companies and demand the government enact universal health care.  And, voters could withhold reelection unless their Congress member produce a track record of balancing a budget.

So do you think paralysis will lead us to sensibility?


Thinking Things Through

March 9, 2011

Yesterday, Pennsylvania Republican Governor Tom Corbett, announced his proposed 2011-2012 budget.  The newspaper headlines in Philadelphia screamed of cuts to education.  Is this all there is to the story?

It would be easy to say that a Republican Governor is just simply unfriendly towards traditional Democratic strongholds such as Philadelphia and Pittsburgh.  And while that may be true, a review of the Pennsylvania budget is quite revealing.  In Corbett’s proposed budget, Education and Public Welfare (Medical assistance, mental health, intellectual disabilities, child welfare, etc) make up 77% of the total $27.3 billion budget.  Of these two, Public Welfare will actually increase.  So, with 77% spoken for in two categories, it makes you wonder whether everything else ($6.3 Billion) is necessary and how you get at it.

Corbett placed great emphasis that his budget contained no tax increases.  With aid to K-12 decreasing $800 million, one of two consequences will emerge.  Education will get poorer or local residents will pay more in taxes to maintain their current schools.  The real question should be, where are education dollars most fairly found?

Wealthy neighborhoods will have little trouble raising the necessary money while school districts with high poverty will be out of luck.  Has the Governor considered that.

In past years, the Democratic Administration has used gimmicks and Federal block grants to produce a balanced budget.  In the past three years, former Governor Rendell has also stunted the growth of the budget.

You have also to wonder what is about to happen as Congress begins to tighten the Federal purse strings.  It will almost assuredly leave the payment of programs it cuts for States to pick up, if they can and want to.  How will States pay for them?

Without a doubt, there is a need periodically to seriously review all expenditures.  Taking the position of no new taxes as a matter of principle is pure fiscal folly.

The nation’s wealth is concentrating in the pockets of Republican’s main supporters, the already wealthy.  This leads inevitably to progressive taxation as a must coupled with hard nose spending cuts.

The Vacuum When We Leave

February 1, 2011

The US currently spends about the same amount on defense as all the rest of the world combined.  For a variety of reasons, this is far too much and we can no longer afford this size expenditure.  But what will happen when we reduce this spending?

Some consequences will arise from lower troop levels, less procurement of munitions and equipment, and sharp reductions in new, expensive items like tanks, ships, and planes.  Less expenditure will translate into job losses unless the adage about less guns should mean more butter. (There are not many civilian aircraft carriers, however.)  Never the less, with a vibrant economy and strong society, the quality of life should get a boost.  Health care, social safety net feature, and infrastructure investments should all benefit.

There could be, however, other consequences.  If the US spends less, will others spend more?  Will others feel the urge or responsibility to become a regional policeman?  If history is a measure, the answer is affirmative.  But who will step forward?

I think one has to assume the usual characters will try to take advantage.  Countries may try to exert their will (read power) beyond their boarders for purposes of trade (read export), ability to acquire critical raw materials (read oil, rare earths, for example), and sometimes to settle old scores (read Iraq and Kuwait, China and Tibet, Russia and former soviet states).

The cold war has convinced a lot of Americans that the US has been ordained to provide global police protection.  Our cold war warriors will fight any reduction in defense spending and predict the direst of unwanted outcomes.  The outcomes do not have to be that dire.

First, for domestic reasons reductions in defense spending must be gradual spread over three years or so.  Second, the State Department needs to play a greater role.  Third, the defense department, armed with new electronic technology certainly can do more with less (We are engaged in two land wars where next generation ships and aircraft are of no value).  And fourth, with the internet and global social networks, foreign populations are going to take a hard look before they don uniforms and march off for country and glory.

The last and most important point is that if the US takes the initiative and reduces its defense spending, it can manage many of the outcomes.  If the US waits until the deficit grows so large that banks force drastic measures, there will be a global panic and no one can then predict who will do what.

The time is now.


Why Facts Don’t Matter

January 7, 2011

Most Americans  (at least 92% of them) have been hurting for quite some time.  Real wages have stagnated while the cost of living has continued to rise.  College education costs are producing a generation of already in-debt, but mediocre educated citizens.  Our law makers spend zillions to get out the vote, wear nice looking clothes, and from time to time are caught in ethically compromised positions (even though nothing seems to happen to them).  There is something wrong with this picture.

On top of this, Americans stand by and watch their government spend their tax dollars on a Defense budget that in total is more than all other countries combined.  Yet there is not a penny, we are told, that can be cut.  We also are part of a health care delivery system that spends more per capita than any other country in the world, yet not all Americans receive coverage, and those that do, on average, receive very ordinary health care, not the best in the world,  There is something very wrong with this picture.

Despite all this, Americans got to listen to John Boehner repeat his claims that “America has the best health care system in the world and the Obama reforms would kill it”.  We heard others claim that health care costs would rise dramatically and increase the national debt.  Others added that the Obama reforms were job killers.

Facts, of course, say the opposite.  While the US health care delivery system is good and may have elements that are the best, on average it is average when compared to other modern countries.  The reform is being phased in over the next few years and so far there is nothing to cause large increases in insurance premiums (which have been rising year after year at 2-3 times the rate of inflation).  The Office of the Budget released figures which once again support the outcome that the Obama reform will actually lower the debt over a 10 year period.  So much for facts.

It seems it is far more important to just say what you would like the facts to be and not worry about whether they are actually true.  Americans are hurting and listing to facts is not in their priority list.