Category Archives: budget

All Posts, budget, deficit, taxes

FEEDING OUR DINOSAURS

1 Comment

I was rambling around the house trying to mentally outline a column about tax policy when my wife asked me to fill the dinosaur feeder in our back yard.  Actually she called it a bird feeder but we’ve only recently learned that birds are evolutionary descendants of dinosaurs, so we haven’t adjusted our language.

Feeding a dinosaur is less complicated than revising the tax code.
Feeding a dinosaur is less complicated than revising the tax code.

Thinking about how dinosaurs became birds is easier than imagining the how American tax code could evolve into something as practical as a chicken, so I changed the subject and my day is already better.

For the dinosaurs, the transition took a long time – something in the neighborhood of 150 million years is a widely accepted estimate.  Dinosaurs didn’t need to elect a congress to create their future, they just adapted as best they could to changes in their environment, including the evolution of other animals and plants, and let nature take its course.  Judging from the number and variety of them now having brunch outside my window, the dinosaurs may be slow, but they have been successful.

We humans haven’t been around nearly as long as the dinosaurs, or even as long as the birds.  We’re evolutionary newcomers but most of us think we’re superior to the creatures sharing our back yards because we have sophisticated languages that we can speak and write to convey complicated ideas to future generations.  Our “superiority” has produced science, literature, mathematics, religion, art, music, clothing, big buildings (and the American tax code).

Along our evolutionary way, we created customary ways of doing things that allow our descendants to survive and thrive.  We build homes to shelter them.  We feed them, teach them, and keep them safe as best we can.  As I look around in my yard, I can see squirrels and dinosaurs (ok – birds) working at those same things.  It seems that evolution or creation (or God if you prefer) built the desire to do those things right into our DNA.  We are here today because our ancestors, going back millions of years, had successful families to care for their young.

As I watch the dinosaurs in my yard, they seem to be fully occupied in the present, the recent past and the near-term future.  They are building nests that will be temporary, eating, and enjoying active sex lives.  The squirrels still seem to be digging up some of last year’s acorns.  Mostly they are living in the present but any observer can see their values – the sense of right and wrong that will assure the success of their families and their coming generations.  Evolution rewards such behavior with survival and adaptation.

We humans expanded mutual support beyond family into neighborhoods, villages and cultures.  We specialized, filling particular roles that help the whole group.  Ants, bees, beavers, wolves, buffalo and others did that too and it worked for all of us.

With our long-term social memory, passed down by word of mouth and later in written form we humans are able to record our values as stories, religions, and laws.  We’ve learned to use those as organizing principles for large societies – even empires.  Incas, Masai, Cherokee, Egyptians, Chinese, Romans, and recently Americans organized themselves so that future generations could succeed. Their laws, customs and religions supported societies where future generations could thrive.  That appears to have worked for all of them.  But eventually some things need improvement.

The evolution of cultures seems to be a lot like the evolution of living species.  Some have been overrun by more powerful competitors.  Some fell prey to droughts, or natural disasters.  Some fell when they were unable or unwilling to support their families and societies so their young could thrive in future generations.  Dinosaurs became birds in order to thrive in a changing world.  Romans became Christians and brought much of the western world along in the process before their empire collapsed.   America emerged from that, much as birds emerged from dinosaurs – becoming a new creature that fed and supported each new generation toward ever greater success.

That, unfortunately, brings me back to the American tax code.  Our congress will soon begin debating it.  In our large and complicated nation, the tax code should collect resources from us and direct them toward creating a nation where all can achieve our potential and succeed together.  Will we use it to evolve as dinosaurs did?  Or will we become extinct?

 

All Posts, budget, Congress, Constitution, taxes

It’s time to balance budgets

1 Comment

Although our election decided who will hold public offices, the issues that divide Americans remain unsettled.  Our political battlefield is strewn with social, economic, religious and geographic landmines ready to explode.  And it’s too early to know what a Trump-led Republican administration will be like.  Besides, election “winners” achieve mostly temporary victories because the “losing” side returns to fight another day.

In that unfortunate climate, vital responsibilities of government often go unattended.  Perhaps the best example is our decades-long and increasingly urgent need to balance federal budgets.  The last time we balanced our budget for more than two consecutive years was the eleven year period from 1920 through 1930.

If both conservative and liberal voters push for it, this might be a time when we could pass a constitutional amendment requiring a balanced budget.  With that in mind, here’s my Balanced Budget Amendment idea.  It would force decisions on some issues that divide us, most notably taxes, health care and defense spending – maybe even uniting conservatives and liberals in support of practical ideas.  Here is the concept:

IDEAS FOR A BALANCED BUDGET AMENDMENT

The President must propose a balanced budget to the congress at least five months before the beginning of each fiscal year.

  1. Congress must pass a balanced budget and send it to the President for signature at least three months prior to the beginning of each fiscal year.
  2. If the President vetoes a budget approved by the congress, the president and the congress must confer, agree to and sign a budget at least 30 days prior to the beginning of each fiscal year.
  3. Failure of a President to meet the responsibilities described above on a timely basis constitutes voluntary resignation from the office of the presidency.
  4. Failure of the Congress to meet its responsibilities described above on a timely basis constitutes ninety day notice of resignation from office by all members of the congress. Each state will elect new members of congress within 60 days to take office 30 days later.
  5. A balanced budget must include all projected expenses plus any unplanned deficit from the prior year and retirement of at least one percent of existing national debt.  It must also include projection of sufficient tax revenue to fund the budget.
  6. An unbalanced budget with expenses exceeding revenue is permissible during a  time of war or other national emergency declared by the congress and approved by the President.  An unbalanced budget requires approval by sixty percent of the members of each house of congress.
  7. Trust Fund programs operated by the Federal Government which have their own dedicated revenue streams may accumulate surpluses and loan them to the Federal Budget at the discretion of the Congress and the President.  Timely repayment of such debt is the highest priority claim on federal revenue.  (Social Security is the main program of this kind.)

The specific language and content of constitutional amendments requires extreme care and scrutiny.  I’ve only tried to describe principles for an amendment, not the exacting language that would be needed.

My prediction is that it will be difficult to get legislators from either political party to consider an amendment because few, if any, are willing to make the decisions required to balance budgets. Facing a deficit, legislators from both parties are generally more willing to raise the debt ceiling than to raise taxes or cut spending.

After all the partisan shouting is done, the necessary compromises usually involve increasing our debt.  The burden is borne by voters and taxpayers.  With this amendment, if officeholders fail, they lose their jobs to someone who is willing to actually do the work.  Holding new elections to replace a failing legislature is not a radical idea. Numerous parliamentary democracies do exactly that.

This column lays out an ambitious vision for solving an urgent national problem.  It’s a good first step toward more effective government because it will also force more responsible decisions on all other federal priorities.

Is it unrealistic to think that our congress, president and voters would actually do this?  Maybe…  But if congress is unable to balance a budget, how can they expect to find success on other contentious questions like immigration, health care, war and civil rights that sit atop their agenda?

If we can’t make such decisions, our future as a viable nation is in doubt.  Let’s get started.

All Posts, budget, economy, health, justice, lgbtq, medicaid, north carolina, taxes

We can do well while doing good

The ongoing debate about the economic impact of HB2, North Carolina’s “bathroom law” seems both sad and laughable because its effect is so small when compared to another foolish decision made by the state’s Republican legislature. The economic and human damage done by the decision to reject expansion of the Medicaid program is greater by far.

Republican friends, before you disagree, do your homework and discover the facts for yourselves. Bring truth to the debate and then see how your legislature’s decisions look under that bright light. Before considering human impact, let’s examine some raw financial facts.

The Robert Wood Johnson Foundation and the Urban Institute have collaborated on research to understand the economic impact on states that rejected Medicaid Expansion. They found that health care funding in North Carolina would be increased by $41 billion in the decade from 2017-2026 if the state accepts Medicaid expansion. That would require $4.9 billion of state funding and would bring $36.1 billion in federal funding. Do the math. $36.1 minus $4.9 equals $31.2 in net gain. Another way to look at it, suppose someone offered you $36.10 in exchange for $4.90. Would you accept it? That is one billionth of the deal that Republicans rejected.  The legislature knew this information when it rejected the Medicaid expansion.

Some will argue that our state budget is too large and we shouldn’t increase it further by expanding Medicaid. That is a reasonable concern, so let’s look at Medicaid expansion in the context of other government spending.

Most federal highway grants require a 20 percent state match. State funding of $4.9 billion would produce a federal highway match of $19.6 billion. That is $16.5 billion less than we would get if we spent the money on Medicaid expansion. Therefore, if one accepts purely financial justification for not expanding Medicaid, the state would be better off by $16.5 billion to reject the highway match and use the money to fund Medicaid.

In addition to providing health care to uninsured North Carolinians, the Medicaid expansion would create thousands of new jobs in health care to replace those lost in other industries.

The argument that “we can’t afford it” doesn’t hold water when made by legislators who spend money on items that yield a far smaller return on investment. It’s a matter of priorities, and this legislature obviously sees other spending as more important than keeping poor people alive and creating jobs.

What about the human effect of the decision? The Medicaid expansion was designed to provide coverage for the working poor, many of whom have jobs (sometimes more than one job) but who are paid so little that they can’t afford insurance even with the help of the Affordable Care Act.  Whatever became of that right wing mantra “take a bath and get a job”? As cynical as it sounds, the Medicaid expansion is designed to support exactly that behavior. It provides health care for people at the bottom of the economic ladder so that they can stay healthy enough to work and support themselves.

Instead of supporting a program that fits with their own traditional philosophies, Republicans rejected the expansion. That leaves us with a law that requires hospitals participating in Medicare and doctors with privileges to practice there to provide emergency and obstetrical care without regard to a patient’s ability or willingness to pay. The cost of that is invisibly built into the prices paid by everyone else. As a result, North Carolinians will pay for surgery to add a few months of life for an emergency patient diagnosed with advanced colon cancer. But we won’t expand Medicaid to pay for the colonoscopy that could have prevented the cancer from forming in the first place. The result of Republican policy is higher cost and a dead patient.

Yes, HB2 is a foolish law that should be repealed. Yes, the cancellation of concerts and sports events has an economic impact on hotels, restaurants and tourism. Yes, the law unfairly discriminates against a largely defenseless class of citizens. Yes, it should be repealed. But so far no one has died as a result of HB2 and the economic impact is microscopic compared to the rejection of Medicaid expansion.

It’s a fabulous opportunity when the right thing to do is also the profitable thing to do.  We have two such opportunities at the moment.  Accept the Medicaid expansion.  Repeal HB2.  Everybody will win.

Republican friends, the facts don’t support your policies.  It’s time to change your minds.

All Posts, American Foreign Policy, budget, deficit, Terrorism, war

WE NEED MORE UGLY AMERICANS

1 Comment

Who was “The Ugly American“?  Most of us know the phrase, but few are aware that the original Ugly American is the hero of the novel by the same name.  Published in 1958, the book described American diplomacy in the fictional Southeast Asian nation of Sarkhan.  Obvious similarities to actual events in nations where the US and the Soviet Union competed for influence (especially Vietnam) made the book a hot topic of discussion in the press and the congress.

The “Ugly American” was Homer Atkins, an American engineer who went to Sarkahn with a desire to help local citizens improve their own lives.  Doing hard, physical work in the fields to design and build simple devices like a bicycle-powered irrigation pump often left Atkins sweaty and dirty, and that “always reminded him that he was an ugly man”.  “Ugly” was a title that he applied to himself, not to others.

In 1958 the Soviet Union was spreading communist ideology into emerging nations around the world.  They portrayed the US as an empire-building colonial power enriching itself and capitalists by dominating smaller nations.  Our diplomatic corps was focused on influencing rulers (often dictators), business owners and military leaders.  The Soviets were interested in the general citizenry, especially any movements to depose rulers or to create wealth among peasant classes and divide them from rulers.  As far away as Vietnam and as close to home as Cuba, the Soviet approach was succeeding.

After reading “The Ugly American” a Senator from Massachusetts was so impressed that he bought a copy for every one of his Senate Colleagues and encouraged them to read it.  Less than two years later, that Senator became President John Kennedy.  Only six weeks into his presidency, Kennedy created the Peace Corps by executive order.  Its mission was to recruit highly qualified volunteers, educate them about local language, customs and issues, then send them to emerging nations as representatives of America.   Kennedy’s decision to create the Peace Corps was inspired by The Ugly American and based on his belief that talented young Americans working alongside local residents without compensation would be excellent ambassadors for our nation and our values.

Today, the Peace Corps remains active and successful, but it is woefully undersized to address needs and opportunities around the world. The Peace Corps budget for 2016 is $410 million.  For comparison, the Department of Defense spent $437 million on military bands in 2015.  The estimated cost of the Iraq and Afghanistan Wars (including derivative costs such as benefits for veterans) for the years 2003-2014 is $5 trillion.  That is almost $52 million per hour.  Eight hours of these wars costs more than a full year of Peace Corps funding.

The Ugly American argued that, “…we spend billions on the wrong aid projects while overlooking the almost costless and far more helpful ones…”.  Today budget deficits are massive and our world seems increasingly dangerous. We should re-examine our spending, the results that we are getting, and our national values.  Despite great sacrifice, uncountable deaths and heroic effort, military intervention in Iraq, Afghanistan,  and throughout the Middle East has not produced peace, safety, prosperity or stable nations.  Instead we see civil war, poverty, terrorism and refugees that no nation wants to accept.  Americans and Europeans now fear home-grown terrorists who have been nurtured by brethren in the nations that we have invaded.

The three Middle Eastern nations with a history of Peace Corps involvement, Jordan, Morocco, and Tunisia have plenty of problems but seem more stable and less susceptible to anarchy and terrorism than their neighbors. We’ve supported a wealthy and radical dictatorship in Saudi Arabia that seems increasingly vulnerable to popular uprisings because oil revenues are down.  The most stable large nation in the region appears to be Iran – the only one that has avoided our efforts at military driven nation-building.

One can only wonder what the Middle East might be like today if we had consistently offered Peace Corps style nation-building that helps individuals and families improve their own lives based on their own values rather than regime change and military solutions.  People of the region might be more inclined to treat us well if we send “Ugly Americans” to help them build the kind of nation that they want rather than arming them to fight each other.  Under the circumstances, it seems like an idea worth trying.

All Posts, budget, guns, health

GUNS IN AMERICA – WHAT SHOULD WE DO?

My thinking would be described by many people as “liberal”; yet  I’m happy to have many friends who are very conservative. We’re friends, but when we talk about public policy we often preach our ideas without really listening to each other.

As I watched the CNN town hall meeting “Guns in America” I saw a remarkable opportunity squandered.  Anderson Cooper of CNN did a good job asking hard questions.  So did some of the invited guests.  President Obama responded clearly but he didn’t take time (or have time during the program) to really draw out opponents of his policies and understand their concerns.  He preached.  So did many of the questioners who were more concerned with getting their points across than with understanding the President’s thinking.  It did not appear that anyone learned something new or changed their minds in any way.

Watching that meeting prompted me to write this experimental column.  I hope to use it to listen rather than to be heard.  I’m inviting all who are interested in the debate about gun ownership to think it through and then clearly state what you want from our gun related laws.  I’ve designed a short survey that also allows comments in your own words.  You can access it HERE or  at the end of this column.  I will compile  responses and report them in a future post – one that I hope will enlighten us all about how others see this issue.

Here is some background information on the subject:  Our Constitution provides a right to keep and bear “arms”.  It doesn’t mention guns.  Our three major national laws governing arms were passed in 1934, 1968, and 1993.  The first law severely restricted private ownership of machine guns, sawed off shotguns and various kinds of guns that were designed to be disguised as canes or other devices.  It was passed in response to violent organized crime during the prohibition era.    The 1968 law prohibited gun possession by various kinds of criminals and other individuals thought to be dangerous.  It also regulated gun commerce and importing “Saturday night specials”.  The “background check” system that is operated by the FBI originated with the 1993 “Brady Bill”.  The combined laws also ban ownership of “destructive devices” like chemical weapons, grenades, and bombs.  The FBI has a good summary of current rules  on its website.

Current enforcement practices allow many  purchases at gun shows and from private individuals without background checks.  One of the President’s proposals is to require background checks on all purchases.  Under some circumstances, the law allows corporations and organizations to own otherwise banned weapons like machine guns.  That exception was intended  for purposes like corporate security at nuclear power plants but its use has expanded significantly.   President Obama has proposed re-examining that program.

The context of the current American debate about guns is important.  Gun related deaths have declined but our conversation about them is increasingly heated and emotional.  In 2013 there were 33,169 gun deaths in the US.  Suicides accounted for 21,175; homicides 11,208; accidents 505 and 281 unknown intent.  Gun homicides accounted for 67% of all American murders.  They peaked at over 18,000 in 1993, dropped rapidly until 1999 and have begun to gradually increase in the 21st century.  Most of the shooters are young – under age 25.

saved-Homoffendersbyage

In the US, we have about 3.5 gun homicides per 100,000 population each year.  The other nations closest to that rate are Nicaragua and Barbados.  There are a lot of nations that American tourists might consider dangerous who are doing much better than us:  Chile – 1.02, Greece and Kyrgyzstan – 0 .53, Azerbaijan – 0.27.  Our closest neighbors show an extreme contrast:  Mexico – 14.2 and Canada – 0.51.

These deaths are not confined to someone else’s neighborhood.  There have been shootings and deaths across our nation, ranging from terrorist attacks to invasions of public schools to drive by shootings.  We can accept it and take our chances or we can try to improve.

What do you think we should do?  Please take five minutes to complete the survey.  Perhaps we can have more intelligent conversations if we know each other’s opinions.

CLICK HERE TO COMPLETE THE SURVEY (PLEASE)

 

 

 

All Posts, budget, Congress, deficit, taxes

NEW IDEAS FOR A BALANCED BUDGET AMENDMENT

3 Comments

Our elected officials in Washington congratulate themselves for avoiding a government shutdown and argue about which non-budgetary legislation to tack onto “must-pass” short term spending bills while we limp from month to month with no long range financial plan .  This column is my attempt to persuade readers of all political stripes that we should pass a constitutional amendment requiring a balanced budget – not because I like the idea but because nothing else seems to work.

First, a dose of reality – Social Security is not the problem.  In 66 of its 77 years Social Security has brought in more money than it spent. That includes the most recent 34 consecutive years.  Because we are living longer and have the large baby-boom generation retiring, Social Security will need some combination of delayed retirement, increased taxes, and reduced benefits; but if congress will act soon, the changes will not be massive.

The real problems are in other areas of the budget.  Our deficit for 2015 was $439 billion despite a $19 billion surplus by Social Security.  Historical data from the US Office of Management and Budget show only two recent balanced budgets: 1999 and 2000 (President Bill Clinton’s last two years).  Prior to that it was 1960, the last year of President Eisenhower’s term.  We have had budget deficits for 53 of the last 55 years and our Congress seems more interested in cutting taxes and increasing spending than in balancing budgets.

Federal spending prior to WWII was typically 10% or less of the value of all the goods and services produced in the nation (GDP).  Since then the US has emerged as a world military power and has developed our social safety net.  As a result, Federal spending has been about 17-20% of GDP since 1975.    Data from the Federal Reserve Bank demonstrate that our serious debt problems emerged in the early 1980s when the Reagan Administration began cutting taxes for corporations and the wealthy without cutting spending.  Historical data from the Office of Management and Budget show that deficits became consistently large around the same time.  Total tax collections have actually remained fairly stable at 17-19% of GDP but the corporate share has been cut in half and capital gains taxes have been reduced while payroll taxes increased.

That is the background information.  Here are some ideas for a constitutional amendment:

  1. Congress is required to pass a budget and establish taxes to fund the budget for periods of time that are not less than one year.  The budget and taxes must be passed and sent to the President at least three months prior to the effective date.
  2. If the congress fails to pass a budget on time there will be a new election 90 days later to replace the entire congress.  The prior year’s budget and taxes will be automatically extended for one year or until they are changed by the new congress.
  3. The debt of the nation is limited to the sum of values of trust funds established by the congress (Social Security for example).
  4. The requirement to balance each budget may be waived during a state of emergency declared by a 60 percent majority of both houses of Congress.  The declaration is valid for not more than one year but can be renewed as many times as the Congress thinks necessary.
  5. At any time when there is no declared state of emergency, 2% of non-trust fund tax revenues will be set aside for reduction of excess debt.

The amendment will:

  1. Force the Congress to do its job.
  2. Protect Social Security and other trust funds that provide pre-paid benefits.
  3. Allow enough flexibility to deal with genuine emergencies and wars.
  4. Gradually pay down existing debt.

The amendment would force serious debate about priorities.  We will be less likely to go to war if we have to raise taxes for it.  There will be more pressure to eliminate wasteful spending and tax loopholes.  There will be pressure to raise taxes for infrastructure, research, and human services.

I was taught in high school that “Economics is the science of meeting unlimited human wants with the limited resources available.”  A balanced budget amendment will require our government to help us do exactly that.

 

All Posts, budget, Christianity, Congress, deficit, economy, justice, medicaid, poverty, public education, taxes

STICKS STONES AND STEREOTYPES

4 Comments

Election campaigns are under way and the name-calling season is open.  Names, labels and stereotypes can influence our opinions and our elections so it’s important to be aware them. Continue reading STICKS STONES AND STEREOTYPES →

All Posts, budget, deficit, economy, taxes

Your Christmas Gift From Wall Street

Congress and taxpayers bailed out too-big-to-fail financial firms that now seem interested only in profits; not in repairing damage that they did. This column demonstrates how Wall Street firms and Congress subsidize each other at the expense of the middle class. Continue reading Your Christmas Gift From Wall Street →

All Posts, budget, health, north carolina, taxes

FRACKING DANGERS ARE WORSE THAN WE THOUGHT

2 Comments

North Carolina’s Republican Governor and a nearly unanimous majority of Republican lawmakers have recklessly dashed ahead to allow hydraulic fracking for production of natural gas. They have ignored the growing body of evidence that fracking imperils our health and the safety of our air and water. They missed the “look before you leap” lesson and took all of us along when they jumped into fracking. Continue reading FRACKING DANGERS ARE WORSE THAN WE THOUGHT →

All Posts, budget, islam, justice, religion, taxes, war

AN ALTERNATIVE ISIS STRATEGY

There must be better ways to relate to Middle Eastern Muslims than the ones we have chosen. Three fallacious assumptions have formed the basis for many mistakes: “The enemies of my enemies are my friends.” “The friends of my enemies are my enemies.” “Those who are not for us are against us.” Here are two examples of where that logic took us. Continue reading AN ALTERNATIVE ISIS STRATEGY →