Archive for the ‘Economy’ Category

Personal Responsibility

Tuesday, September 3rd, 2013

When the Son of man shall come in his glory, and all the holy angels with him, then shall he sit upon the throne of his glory: and before him shall be gathered all nations: and he shall separate them one from another, as a shepherd divideth his sheep from the goats: and he shall set the sheep on his right hand, but the goats on the left.  Then shall the King say unto them on his right hand, Come, ye blessed of my Father, inherit the kingdom prepared for you from the foundation of the world: for I was an hungered, and ye gave me meat: I was thirsty, and ye gave me drink: I was a stranger, and ye took me in: naked, and ye clothed me: I was sick, and ye visited me: I was in prison, and ye came unto me.  Then shall the righteous answer him, saying, Lord, when saw we thee an hungered, and fed thee? or thirsty, and gave thee drink?  When saw we thee a stranger, and took thee in? or naked, and clothed thee?  Or when saw we thee sick, or in prison, and came unto thee?  And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me.
Matt 25:31-40

For Christians, I don’t know how the message could be any clearer.  This is about salvation.  In my reading, those that provide for the poor, the hungry, the stranger, the sick, and those in prison will be welcomed into heaven.

It is also instructive that Jesus directed this advice specifically at those he called “the righteous”.  These are the people who aspire to perfection, go to church, and keep the commandments.

During Jesus time, many pious Jews thought that bad things happened to bad people.  So they felt no compassion for those that Jesus described.  Instead most blamed the poor, the sick, the hungry, the homeless, and those in prison for their plight.  The self-righteous Jews figured that these people were being punished by God for something.  And clearly who are they to question God.

Jesus was very clear in what he said.  He didn’t qualify those in need in any way.  Instead he said that their NEED is the only relevant qualification.  It doesn’t matter why someone was hungry or sick or homeless or in jail.  Our response is all that is important.  That response will determine how we are judged in the afterlife.

We find ourselves in a very similar situation today when we attempt to have a conversation about race, poverty, and crime.

First a few facts.

According to the Census Bureau, fully 38% of African-American children under 18 now live in poverty.

67% of African-American children live in single parent households, and nearly all of those doing the actual parenting are women.  The courts, according to HHS, have awarded child support to 45% of these African-American mothers, but less than half actually get any money.   Doing the math, that means that 80% of those custodial mothers get no funds from the fathers of those children.  About half of white women actually receive the support the courts have awarded.

This raises the obvious question of where the African-American men are.

A million of them are in prison.  That’s 43% of our prison population even though they represent only 13% of the population.  One out six African American men have at some time been incarcerated.  Even that is a decrease from the past decade.

Maybe because they commit more crimes?

Not exactly.

African-American defendants are more likely to be given jail or prison time for the same or similar offenses for which white folks are given probation. African-American men also receive longer sentences than white men sentenced for the same or similar offenses.

This is, in part, the sorry legacy of our failed war on drugs.  In the 80’s, “ghetto” drugs like crack cocaine carried penalties up to 100 times more severe than a similar offense for a similar amount of the “yuppie” powder version of cocaine.  When these drug laws were originally passed in 1986, the thought was that crack was more potent and addictive.  Studies have since disproven that claim.  The U.S. Supreme Court finally ruled the sentencing disparities unconstitutional.

On the employment front, only 52% of African-American students graduate from high school and the rate for African-American boys is even worse according to the Department of Education. The economic consequences of that lack of formal education are well known – lousy jobs with lousier pay and a downward economic spiral from which there is no escape.  The economic consequences of an arrest record are also severe.  70% of employers run criminal background checks and 50% won’t hire those with a criminal record.

New research also suggests that children raised in poverty actually suffer physician damage to their brains which impair their cognitive abilities as adults.  Testing has already discovered that rich kids perform better than poor kids at a number of standardized cognitive tests.  Researchers have now discovered at least one cause.  During the first couple of years of life, our brains “wire” themselves based in part on the stimulation that we receive from our environment.  Stressful environments inhibit the full development of this wiring.  Even the tone, language, and vocabulary that a young child experiences during the first weeks and months of life can have a profound effect on later academic success.

It’s a statistical avalanche of negativity – grinding poverty, early developmental deficits, poor educational opportunities, failing schools, few jobs, and way too much interaction with the criminal justice system.

We cannot and should not ignore that some of this is self-inflicted even while we acknowledge the historical and socio-economic hurdles faced by African-Americans. Whether or not you respect the women trying to raise you and the young women around you, or if you stay in school, or take responsibility for your own children are all choices that can be made regardless of external pressures.

But it most certainly is not all self-inflicted.

There has to be some other reason why, for example, if a white man and African-American man with the same educational credentials apply for the same job the white man is twice as likely to get the job. Or why, when both African-American and white little girls were given a choice between a white doll or one of color, even the African-American girls preferred the white doll. Or why we still have such a profound ignorance of Africa and African-American history.

There also has to be a reason why race and poverty have become so politicized.  Why African American voters, for example, voted in higher rates than whites in the last two elections.  One opinion is encapsulated in a Romney quote that became a pivotal moment in the 2012 election.

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it — that that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. … These are people who pay no income tax. … [M]y job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

Romney was correct in suggesting that 47% of those who file income tax forms pay no net income tax, though that doesn’t mean that they aren’t tax payers.  Two thirds of those paying no income tax did pay payroll taxes (FICA and Medicaid) and virtually everyone pays some state and local taxes/fees.   He was also wrong in suggesting that this cohort votes primarily democratic.  55% of the “47%” are elderly.  They voted 56% to 44% for Romney.  Roughly 60% of the “47%” had incomes above $50,000 a year.  They supported Romney 52% to 46% and those with incomes above $90K supported Romney 54% to 44%. 

So what segments are left that voted for the president no matter what?

The voter segment that gave Obama the largest margin of victory was African Americans (93% – 6%).

Even though Obama won two elections, this open issue has not been resolved.  It remains the most difficult one that I think our democracy faces.  One only need look at the range of responses to the Treyvon Martin killing to understand the depth of the division.

What do we do as a country to deal with the stark realities of institutional poverty, crime, and violence in the African American community?

One choice is to blame African Americans for their condition.

This view was summarized by Ted Nugent in his comment about problems of crime and violence in the African American community.  He said African Americans could “fix the black problem tonight,” if they would put their “heart and soul into being honest, law-abiding, [and] delivering excellence at every move in your life.”

And

“racism against blacks was gone by the time I started touring the nation in the late [19]60s” and by the 1970s, “nothing of consequence existed to deter or compromise a black American’s dream if they got an alarm clock, if they set it, if they took good care of themselves, they remained clean and sober, if they spoke clearly, and they demanded excellence of themselves and provided excellence to their employers.”

There is great risk, at least for Christians, in this choice as Jesus explained.

The other choice is to follow Jesus recommendations.  Feed the hungry.  Help the stranger.  Clothe and shelter the homeless.  Heal the sick. Care for those that are in prison.

That’s not to say that these aren’t complex issues.  They are.

This is also not to say that all people need to develop individual responsibility.  They do.

But Jesus said clearly that the individual responsibility He is concerned about is that of the righteous.  THAT responsibility is to care for the less fortunate regardless of how they got there.

Jesus never said this would be easy.  But he did promise that the reward for those willing to take on this task would be great.

He provided every righteous Christian a choice.

Just like any other issue of personal responsibility, how you respond is up to you.

Sequester the Sequel

Thursday, August 22nd, 2013

While many are suggesting that the first year sequester cuts weren’t that bad, they are generally unaware that the sequester bill included five years of scheduled across the board spending reductions.

So let’s take a look at what has happened already and then what is coming.

According to the U.S. Bureau of Economic Analysis, over the first half of 2013, the federal government has subtracted 0.8 percentage point from GDP growth—this as the economy grew a paltry 1.1 percent in the first quarter and 1.7 percent in the second.

The CBO has projected that if the next round of sequester cuts were canceled, we would see another .7% in GDP growth and add another 900,000 jobs by Q3 2014.

As Business Week says, this isn’t rocket science.  “We’re living through the biggest contraction in federal spending in 60 years, and this is one of the weakest recoveries on record. Coincidence?”

Conservatives counter that every dollar that isn’t spent by the government goes back into the pockets of taxpayers.  The implications are that individuals will spend that money in the same ways that the government will, we will see the same growth, and we will be better for it because the government is inefficient and political.  The problem with this simplistic view is that in uncertain times like this individuals DO NOT spend their money.  Instead they reduce their debt and increase their savings.  Businesses respond to reduced demand by doing the same thing.  So we end up with a lot of cash sitting on the sidelines and economic growth slows, which is where we are today.

The CBO says we are operating 6% below our capacity right now.  That is $1T in economic capacity that is sitting idle because of lack of demand.  The problem, for anyone willing to take a look, is clearly NOT too much government spending.  It is too little consumer demand.

Here are a few more quotes if you remain unconvinced.

“The idea that spending cuts generate growth in a demand-constrained economy is nonsense,” says Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities.

“To say the sequester is good for the economy is wrong on a scale that’s impressive,” says Neil Dutta, chief U.S. economist at Renaissance Macro Research.

“I don’t know how you can make that claim,” says Stuart Hoffman, chief economist at PNC Financial Services Group, who estimates that the sequester has stolen about 30,000 jobs from each month’s payrolls total since it was enacted in March.

If there is good news in this story, the economy appears to have survived the assault with a blunt instrument that the first sequester administered.  We are now in a position where the GDP can grow faster than the debt.  That means simple focus on short term economic growth will likely complete the recovery and put us back in a situation where debt as percentage of GDP is going down even though the debt in absolute terms may be going up.

So what is the Republican agenda?

First, threaten to shut down the government if Obama doesn’t repeal Obamacare.

Second, threaten to throw the government into default, if the Obama administration doesn’t agree to ANOTHER round of spending cuts in addition to what is already on the books.

So it doesn’t sound as though there is much political appetite at the moment to replace the sequester with something more constructive and there is certainly the possibility that it will get worse before it will get better.

That said, here’s a short list of the impacts we’re dealing with beyond those already mentioned.

States

This next round is going to impact states even more than the previous cut.  States will see $4.2B less in federal funding.  Targeted programs include public housing assistance, money for schools with low-income students, food inspection, scientific research grants, and environmental protection programs.  While states absorbed a $4.6B cut last year through reductions is staff in reductions in programs, this year they will be forced to start eliminating programs completely.

The other state complication is that most states are required by law to balance their budgets and the 2014 budgets have already been passed.  If the next round of sequestration is implemented, most states will start their fall legislative terms with significant budget shortfalls.

From a USA today article

“They are already in a difficult spot because they already have imposed major cuts to their schools and other public services,” Leachman said. “If they enter those legislative sessions having to deal with additional cuts in federal funding for schools or law enforcement or clean water or programs that help low-income families, that makes their job even more difficult.”

Pennsylvania budget secretary Charles Zogby said his state managed to get through the first round of sequestration budget cuts without massive cuts in personnel—but that may change. “Thus far, that hasn’t been part of the challenge. It may be in round two,” he said.

Headstart

Headstart, one of the most successful programs we have to alter the future of poor kids, is going to have to cut fall enrollment by 57K because of sequestration cuts.

Public Defenders

The federal public defender system has been decimated by the sequester cuts.  According to the WSJ, this ends up costing tax payers more than what has been saved through the cuts because our constitution guarantees that those who cannot afford an attorney will have one appointed for them.  When public defenders are not available, court dates are delayed and courts ultimately hire private attorneys.  We pay for all that.

Overburdened defenders also make mistakes and miss evidence that could have cleared their clients.  These mistakes create more appeals.  As Supreme Court Justice Stephen Breyer noted in March in congressional testimony about the effects in general of the sequester, it is “cheaper to have a decent lawyer in the first place.”

Medical Research

Even George Will decries the effects of reductions in basic medical research caused by the sequester.

For Francis Collins, being the NIH’s director is a daily experience of exhilaration and dismay. In the past 40 years, he says, heart attacks and strokes have declined 60 percent and 70 percent, respectively. Cancer deaths are down 15 percent in 15 years. An AIDS diagnosis is no longer a death sentence. Researchers are on the trail of a universal flu vaccine, based on new understandings of the influenza virus and the human immune system. Chemotherapy was invented here — and it is being replaced by treatments developed here. Yet the pace of public health advances, Collins says, is being slowed by the sequester.

This will be, Collins believes, “the century of biology.” Other countries have “read our playbook,” seeing how biomedical research can reduce health costs, produce jobs and enhance competitiveness. Meanwhile, America’s great research universities award advanced degrees to young scientists from abroad, and then irrational immigration policy compels them to leave and add value to other countries. And now the sequester discourages and disperses scientific talent.

Forest Management

The sequester has also reduced our ability to manage our forests which has contributed to the unprecedented scale of wildfires that we’ve had to fight.

The Hazardous Fuels Reduction Program was $500 million last year, went down to $419 million this year under the automatic budget cuts, and has been proposed to go to $292 million next year.

“The fires that are ripping through Oregon and Idaho and California and the West are just proof that the fire prevention policy is broke,” Sen. Ron Wyden, D-Ore., chairman of the Senate Natural Resources Committee, said from Lincoln City.

“There are years of neglect. The fuel load builds up and it gets hotter and hotter on the forest floor. Then you get something like a lightning strike and a big inferno. Then the bureaucracy takes money from the prevention fund to put the fires out and the problem gets worse. The cycle just repeats itself again and again.”

This brings us to the basic question of why.

The only answer I can come up with is that Republicans have lost touch with reality.  They have won the war against debt.  Rather than take a victory lap and set themselves up for a potential change in control in the senate, they are determined to pump another bullet into the wounded economic recovery.

Their fantasy that cutting government spending would stimulate economic activity has failed.  We can now document the damage it did to the economy.  With the second round of sequester cuts looming, we have an opportunity to reduce the damage.  Just stopping the austerity program will have a positive economic effect.  But we can’t seem to even have a rational discussion on how to do that simple thing because of ideology and politics.

Since it is unlikely that Republicans will unilaterally abandon the ideology that is driving their actions, the only other possible solution is a political one.  If Republicans suffer another defeat in 2014 similar to what they experienced in 2012, maybe then the survivors will finally realize that there are real political consequences to imposing a minority agenda on an unwilling majority.

A More Perfect Union

Sunday, August 4th, 2013

A More Perfect Union

But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you; That ye may be the children of your Father which is in heaven: for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust.

For if ye love them which love you, what reward have ye? do not even the publicans the same?

And if ye salute your brethren only, what do ye more than others? do not even the publicans so?

Be ye therefore perfect, even as your Father which is in heaven is perfect.  Matthew 5:43-48 

Jesus was pretty clear here.

God loves everyone.  His Son Jesus advises us, for our own good, to do the same.  He was also pretty clear about who that “everyone” included.  Not just those that agree with us, but all those who treat us badly, make us mad, and may even persecute us.

The political situation in this country is pretty good evidence that people aren’t taking that advise.

CBS released a poll which shows that there are very few people left in the middle of our political spectrum.  The rancor of the past 13 years or so has forced most people to take a side.  The result is that everyone thinks that the other guy is crazy.

Is-the-other-party-too-extreme

 

Compared to partisans, independents actually don’t appear stuck in the middle: just 29 percent of them see both parties as too extreme. Independents instead tend to pick only one of the parties as too extreme, so this isn’t really a case of an alienated center watching both parties move further away. (And it also squares with the fact that many people who call themselves independent do in fact lean to one side.)

Here’s how that affects our politics.

Americans want deals and compromises in principle, and from both sides -eight in ten say they’d like to see more of it. But when those Republican voters back home see congressional Democrats as too extreme, and vice versa for Democratic voters, then members to who cut deals across the aisle are bound to face suspicion: has that extreme other side really changed its stripes? Did our side really get more than we gave? And it’s easy to see why activists on both sides are turned off by the very thought of cooperation with another party that’s so (seemingly) out of touch.

The result is that voters have given their representatives an impossible task.  They dislike deadlock, but they are so skeptical of the motives of the other side, that they question any concessions that necessarily have to be made in order to reach a compromise.  In other words, voters say that they want compromise, but they punish the politicians who in fact attempt to make a deal and reward those who, in principle, refuse to support anything but the party line.

Because the extremes appear to outnumber the middle, our government has lost the ability to compromise.  Instead it is all about maneuvering for power and counting the “scalps” that can be accumulated along the way.  We have replaced practical reality with political gamesmanship and obsessive ideology.

Here are a few recent examples.

Obamacare Obsession

The House recently voted for the 40th time to repeal Obamacare.  It passed on a strict party line vote, but will have no practical effect on the law.  The only value of this vote is to provide Republican members of the House a “scalp” to take home with them and show to their supporters.  The vote may help Republicans build the case for electing more Republican Senators in 2014, but Senator Tom Coburn summarized reality when he said, “The only way you get rid of Obamacare is winning the 2016 election.”

Republican Senators Lee and Rand Paul have been circulating a letter threatening to shut down the government in the fall if President Obama doesn’t stop the Obamacare rollout.  This is another activity, like the previous one, that is perilous for Republicans.  The last time Republicans shut down the government, they paid a dear price at the polls and single-handedly rescued Bill Clinton’s Presidency from the Lewinsky scandal.

Sen. Richard Burr, R-N.C., called it the “dumbest idea” he had ever heard, while Sen. John McCain, R-Ariz., warned against more shutdown “shenanigans.” Some senators who initially backed the idea, like Sen. John Cornyn, R-Texas, have rescinded their support for it.

Even if House Republicans WERE successful in shutting down the government, that action, like the votes in the House, would only be symbolic.   The Congressional Research Service has reported that a government shutdown would not slow the Obamacare rollout.  That’s because Obamacare has other sources funding that are beyond the reach of the sorts of annual appropriations controlled by the House.

So why try?  According to Senator Ted Cruz, who is backing the government shutdown gambit, “No major entitlement, once it has been implemented, has ever been unwound,” he said. “If we don’t do it now, in all likelihood we never will.”

The reality about Obamacare is that the game is over.  By 2016, the law will be fully implemented.  State exchanges will be up and running.  Somewhere around 20M people who previously couldn’t afford to purchase insurance themselves, will be insured.  Those people are not going to vote for anyone who promises to take away their health insurance.  The margin of victory in 2012 was 5M.  It will be political suicide for any candidate for national office to start the race with a 20M deficit.  The 2012 election was the best opportunity for Republicans to repeal Obamacare, and they failed.   Their base, however, won’t allow them to admit defeat.  Instead they may inflict some very real economic damage to the country.

Scandal Obsession

Republicans are convinced that there must be a scandal somewhere.  The harder they look, however, the less they find.  Yet they continue to dig, because the digging itself supports the conservative partisan view that Democrats are corrupt.  So we have the spectacle of Rep Issa issuing subpoenas for more documents from the IRS, the state Department, and the Justice Department while the information that they are supplying only continues to support the administrations original claims.  Issa claims that the agencies involved are holding back valuable information, but that is also more political grandstanding.  The IRA has 170 people including 70 lawyers working on delivering the documents that Issa has requested.   His demands deliberately exceed their ability to respond.

Here’s what the documents that have been delivered so far have shown.

There was no executive branch involvement in the methods the IRS created to screen applications for non-profit status.  In fact, both liberal and conservative groups were subjected to the same types of screens.

While mistakes were made in Benghazi, there was no conspiracy to misrepresent the information shared with the public.

The failed attempt to trace guns being traded across the Mexican border was just that.  There was no attempt by the White House to cover up what was a poorly designed operation from the start.

The failures in each case were bureaucratic, not political.

Republicans aren’t particularly interested in what has the potential to be a real scandal – domestic spying.

Debt

We’re going to see this spin up again this fall when there is another discussion about spending.

The reality is that the sequester has cost both jobs and economic growth, but it has slowed the growth in debt to the point where it is possible with additional economic stimulus that we could grow our economy faster than our debt.

This should be good news.  Instead we are going to see more attempts to cut spending rather than stimulate growth because it was never about the debt.  It was always about reducing the size of government and weakening the traditional Democratic base.

Immigration Reform

Republicans of almost all stripes have admitted that if they are to have any hope of competing in future national elections, they have to repair their dismal image with immigrants.  The Senate in a brief moment of clarity managed to pass an immigration reform bill, but only after committing to spend $30B to build more fences and hire more border control agents.  Some have estimated that this cost works out to $40K per immigrant and may only serve to redirect the flow of immigrants from the border to other coastal locations.

The CBO estimated that the Senate bill would reduce the debt over the next decade by $135B and cut the flow of illegal immigrants by 50%.  Because of the path to citizenship, it would also reduce the number of undocumented workers living in this country over the next decade to 5M.

Yet it was not enough for House Republicans who rejected the whole thing.  They want to focus on questionable enforcement measures first.  Some reject the whole notion of a path to citizenship.

Why?

Because they have a base that has been supporting candidates with xenophobic positions against all immigration.  This even though President Bush proposed a similar plan in his administration and Reagan signed the Immigration Reform Act in 1986 which legalized 3M undocumented workers.

Summary

For those interested in history, what we are seeing in politics today is fascinating.  Ideas that Republicans created and promoted for decades are no longer recognizable to that party.  Obamacare was a Republican alternative to single-payor healthcare reform and was actually successfully implemented by Mitt Romney in MA.  Cap and Trade, monetary stimulus, tax reform, and entitlement reform were ALL originally Republican ideas.  The have ALL been proposed at one point or another by this administration as “common sense” approaches to solve problems.  They have ALL been rejected by today’s Republican Party.  This used to be the party promoting the intelligence of the free market.  It has become the party of opposed-to-whatever-the-Democrats- support.

There is a solution coming because demographics are running in the direction of Democrats.

The problem is that even this doesn’t resolve the underlying erosion in democracy as an effective method to resolve differences between political extremes.  Instead we appear to be drifting towards more of a parliamentary democracy where the only times things get done is when one party controls the government.

While I would prefer that Democratic ideas prevail, I would not want that to happen as a result of the death of the Republican party.  If that’s what occurs, it will be a dark legacy for our troubled time.

Budget Fantasy

Thursday, June 20th, 2013

It wasn’t all that long ago that Republicans in the House and Senate were claiming that the Obama administration was irresponsible because they hadn’t proposed a budget.

“President Obama missed a great opportunity today to help our economy.  This was supposed to be the day he submitted his budget to the Congress.  But it’s not coming.  It’s going to be late.  Some reports say it could be a month late,” Speaker John Boehner (R-Ohio) said on the House floor.

Then both the White House AND the Senate Democrats put budgets on the table.

What has happened since is a fascinating political turn from Republicans.

The first was the claim that no progress would occur on budget talks until President Obama was willing to support cuts to retirement programs.  Then Obama DID publically outline his willingness to make adjustments to retirement programs in return for more revenue through tax reform and subsidy cuts.  The Republican response was to deny that Obama ever said anything.  Boehner said, “there’s no plan from Senate Democrats or the White House to replace the sequester.”

When confronted by reporters that Obama had not only produced a budget, but that it also included concessions on retirement plans, Boehner responded, “If he had a plan, why wouldn’t Senate Democrats go ahead and pass it?”

The facts again, however, are at odds with that position.

The reason the Senate Democrats have been unable to pass a budget to replace the sequester cuts is that the Senate Republicans have blocked a vote with a filibuster.  The Senate Republicans are filibustering the bill because they know if they allowed a simple up or down vote, the budget would pass.

This is consistent with the Republican message that the sequester is not only Obama’s fault, but his preference.  At the same time as they are criticizing Obama for failing to compromise (which in Republican speak means accept our position), they are taking credit for the whole effort.  “I don’t think taking 2 percent off the top in a $14 trillion economy is going to be a big drag on growth,” said House Budget Committee Chairman Rep. Paul Ryan, R-Wis.  For an economy that is struggling to grow faster than 2%, that is a curious statement – but then math has historically been a challenge for him.

Both Obama, the Democrats, and Republicans proposed alternatives to the sequester.  Yet the sequester cuts still took effect.  Here’s how Boenher explained it.

Well, no, he didn’t want the cuts, but we have the sequester as a result of his demands. And I, told my colleagues in the House that the sequester will stay in effect until there’s an agreement that will include cuts and reforms that will put us on a path to balance the budget over the next ten years.

This path to a balanced budget is a reference to the Republican Paul Ryan budget which was rejected by voters less than a year ago. That’s the budget that also includes repealing Obamacare which the CBO says will ADD to the debt. But the Ryan budget keeps the “job killing” taxes contained in the Obamacare bill in order to balance the budget in ten years.

What about the deal that Obama put on the table to “trade” reductions in retirement programs for tax reform?

Boehner said, “Listen. I have worked with the president for two years to try to come to an agreement. Unfortunately, we’ve not been able to do so.”

Right! Obama has a deficit plan, but Boehner couldn’t come to an agreement on it because Eric Cantor told him the House Republicans wouldn’t approve it. Cantor has said this himself. That’s not a supporting point for Boehner’s contention that Obama has no deficit proposal that includes spending cuts. It’s, if anything, a refutation.

When pushed on this point, Boehner has said, “The president got $650 billion of higher taxes on the American people on January the first. How much more does he want? When is the president going to address the spending side of this?”

And so the circular part of this illogical argument starts over again.

Republicans claim that Obama doesn’t have a plan to replace the sequester (which he does) because the Senate can’t pass it.  The Senate has the votes to pass it but Republicans are preventing the Senate from taking a vote.  The House Republicans discount Obama’s offer to cut spending AND raise taxes because they oppose tax increases even though their own budget includes tax increases.

So why don’t we have a deal?

Boehner can’t make a deal because if it did, it wouldn’t pass the House and would likely also cost him his job.  Instead of pointing the finger at the Tea Party section of the house, he has simply created this Big Lie regarding the President and his intentions.

He figures if he and other Republicans continue to repeat this Big Lie, perhaps it will stick.

“The president has to go first with plans for Medicare and Social Security,” Maine Senator Collins said. “Then I think you will see more receptivity on the Republican side to an overhaul of the tax code” that raises more revenue.

Or

“It’s still not clear he’s willing to actually cut spending,” said another House aide.  “And that’s what is necessary.”

“I’m not so sure he has given up on raising taxes entirely,” says yet another aide.  “He will try to raise net tax revenue through tax reform.”  GOP Congressional aids quoted by Byron York.

Yet this is EXACTLY what Obama has been offering for months.  He has gone first, as Senator Collins recommended, and nothing has happened.  He has offered to trade tax increases through tax reform for cuts in Medicare and Society Security.  Republicans are rejecting this offer because, apparently, THEY are the only ones who can be trusted to raise taxes.

So why aren’t we getting a deal done?

Ezra Klein from the Washington Post documented this maddening circular logic with GOP Strategists Mike Murphy.

Murphy began by opining that Republicans might cut a deal with Obama if only Obama would endorse means-testing Medicare. Reporter John Harwood tweeted to him that Obama has supported this. Murphy replied that it’s a “good start but not enough” — Obama should also support “chained CPI,” or using a stingier formula to calculate cost of living increases for Social Security. Many people pointed this out to him. Murphy then called chained CPI a “small-beans gimmick.”

Instead we have sequester cuts which are causing real hardships to real people.  The cuts are slowing economic growth and putting people out of work.  That is making even the International Monetary Fund uncomfortable.  They have already expressed their concern that the US cutting spending TOO quickly.  It wasn’t all that long ago that Republicans were using the IMF as the boogeyman.  If the US didn’t cut spending, they predicted, the IMF would impose harsh penalties similar to what they did to Greece.  Now the IMF is warning us, just like it warned Greece, but the warning is that the Republican plan to dramatically shrink government is too aggressive.

“The nature of the recovery appears to be changing,” the IMF staff wrote in its mid-year review of the world’s largest economy. “The automatic spending cuts not only exert a heavy toll on growth in the short term but the indiscriminate reductions in education, science and infrastructure spending could also reduce medium-term potential growth.”

What do they recommend?

The same deal the President has offered.   Increase taxes to fund investments in education, science and infrastructure and reduce longer term spending through retirement program reform.

So why don’t we have a deal?

Because the Republicans are unwilling to make ANY deal with Obama.  This has nothing to do with entitlement reform.  This has nothing to do with taxes.  This has nothing to do with economics.

Republicans would rather prevent REAL economic recovery, blame the continuing hardship on Obama, continue to tell the Big Lie that he’s the one who is unwilling to compromise, and take their chances with voters in 2014.  That’s been the Republican strategy ever since Obama and his new progressive majority took over the White House.  It was a strategy that worked in 2010.

Fortunately the Democrats already have plans to hold Republicans accountable for this strategy in 2014.

Sen. Brian Schatz (D-Hawaii) said in speaking with constituents that the budget has become a common topic and people are receptive to the approach Democrats have outlined.

“People want a budget,” Schatz said. “There is anxiety because we’ve been on a [continuing resolution] for so long and sequester is hurting our local economy.”

Hopefully there will be some accountability at the ballot box.  That is the best way to punish those who choose the interests of their party over the interests of the country.

That was Then, This is Now

Monday, May 27th, 2013

A terrible tornado struck Oklahoma earlier this week.

The Governor of Oklahoma, Mary Fallin is sounding very similar to Chris Christie from New Jersey in calling for Federal assistance.  She is saying the FEMA is doing a great job, but Congress is moving much too slowly in authorizing additional aid for those in need as a result of this historically destructive tornado.

The two Senators from Oklahoma were some of those responsible for delaying the aid to Hurricane Sandy victims for two months.  Jim Imhofe called the aid to the victims of one of the most destructive hurricanes in our history, a “slush fund” because it included aid for victims outside of New Jersey.  His counterpart, Tom Coburn, held up aid for Sandy victims because he insisted that it be balanced by cuts to other spending.  When that didn’t happen, he voted against it.

He doesn’t have the same dilemma here because the scope of the damage in Oklahoma can be covered by the existing FEMA $11B budget.  But he neglected to say in his comments that he and Jim Imofe voted against the very FEMA funding that he is now suggesting are going to be the source of relief for his storm-ravaged state. He also has gone on record to say that if FEMA disaster recovery funds are exhausted before the end of the federal fiscal year (October), he will again require that any additional funding required to help others recover from any other natural disasters that may occur between now and then will have to be matched by other cuts in spending.

Sequestration which both Imhofe and Coburn supported included an 8.2% cut to the National Weather Service.  According to the organization representing weather service employees, that means there is “no way for the agency to maintain around-the-clock operations at its 122 forecasting offices” and also means “people are going to be overworked, they’re going to be tired, they’re going to miss warnings.”

Summarizing the problem, a letter from the U.S. Secretary of Commerce put it bluntly: “The government runs the risk of significantly increasing forecast error, and the government’s ability to warn Americans across the country about high impact weather events, such as hurricanes and tornadoes, will be compromised.”

While the NWS was able to provide 16 minutes notice of the storm which is three minutes more than the average, $24M of the of “slush fund” money authorized for Sandy relief went to the NWS for computer upgrades.  Those upgrades will improve forecasting and provide even more notice to those in the path of deadly weather.  This funding, however, will only bring us on par with the types of systems Europeans use to forecast dangerous weather.  They, for example, were able to forecast the path of Sandy more accurately than the NWS.  This is only a fraction of the funding, however, needed to create a state of the art system which, as Oklahoma proved, could save lives.

NOAA also has warned that our weather satellite system is aging.  We may be facing a 53 month gap if they fail before they are scheduled to be replaced.  The reason for this gap?  The Republican-controlled house cut $700B from the NOAA budget in the 2011 debt ceiling shutdown.  Those funds were restored earlier this year in the fiscal cliff compromise.  Both Imhofe and Coburn voted against the fiscal cliff compromise bill.

Finally, both Coburn and Imhofe are climate change deniers.  Coburn said there is, “no hard evidence to support global warming” and that it is “just a lot of crap.” Imhofe wrote a book entitled, The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future.  He supports the Dominion Theory which states that the whole concept of climate change is contrary to the Bible’s statement that God gave man dominion over the whole earth. So human activities can’t be detrimental.

Coburn and Imhofe are two of the top legislators supported by the oil industry.

What’s the moral of the story?

Spending cuts have consequences.  Our weather systems are aging.  Even though we suffer more deaths and property loss than any other country in the world, other countries have found a way to invest more money in more accurate equipment than the United States.

Private industry, non-profits, churches, and local government CAN’T provide all of the services that citizens need.

Government DOES have a role in the lives of its citizens.  Even conservatives are willing to admit this, at least when it is their state or district in need of help.

FEMA when properly staffed and funded CAN effectively respond to natural disasters.

When you cut funding for NOAA and NWS and when you politicize FEMA (as occurred during the Bush administration); people die.

Climate change is real.  The number of natural disasters has been increasing dramatically over the past decade.  Insurance paid out $35B in claims last year alone.  That’s $11B over the average.  This is at least one industry that is taking global warming seriously.

Eventually the American people and their representatives will come to the same conclusion.

Failure to Communicate

Wednesday, March 27th, 2013

The Republican Party recently released an analysis of their shocking Presidential campaign loss last November.

“Our message was weak; our ground game was insufficient; we weren’t inclusive; we were behind in both data and digital; our primary and debate process needed improvement,” Party Chair Priebus said of Mitt Romney and the GOP’s 2012 loss. “There’s no one solution. There’s a long list of them.”

The report outlines the need to reach out to women, African-Americans, Asian, Hispanic, and gay voters.  They are going to do this by hiring staffers across the country to begin engaging those communities.  They support comprehensive immigration reform, shortening the primary process with fewer debates, moving the convention date earlier in the summer, and investing in more technology.

“To be clear, our principles are sound, our principles are not old rusty thoughts in some book,” Priebus said, but the “report notes the way we communicate our principles isn’t resonating widely enough.”

Sally Bradshaw, a GOP strategist who was also on the committee, added that the GOP “needs to stop talking to itself” and needs to open the tent in order to win presidential elections in the future.

So the Republican Party is admitting that it can no longer win elections depending exclusively on the votes from old angry white men.  That is progress.

The problem is that they are blaming their loss on a failure to communicate.  They continue to insist that if women, minorities, young people, unions, and educated professionals voted for Obama ONLY because they didn’t understand what the Republican message really was.

A wonderful example of this delusional thinking is how Chairman Priebus handled the question of marriage equality.  He held up Republican Senator Rob Portman’s recent public support of same sex marriage as an example of this new philosophy of inclusiveness.

“I think it’s about being decent,” Priebus said. “I think it’s about dignity and respect that nobody deserves to have their dignity diminished or people don’t deserve to be disrespected.

“I think that there isn’t anyone in this room, Republican, Democrat or in the middle, that doesn’t think that Rob Portman, for example, is a good conservative Republican.

“He is. And we know that. … I think that party leaders have to constantly remind everybody that we can’t build a party by division and subtraction. We can only build the party by addition and multiplication. We get that and that’s going to be our endeavor.”

When asked if the Republican Party supported Portman’s position, Prebius said, “It’s his decision. It’s not a matter of whether I support his decision. I support him doing what he wants to do as an elected person and as an American. If that’s his opinion, then I support him having that opinion.”

In other words, the Republican Party is going to continue to oppose marriage equality but will allow some who hold opposing views on the subject to still call themselves Republicans.  The fact that this is newsworthy is testimony to the depths of the problem.

Conservative Republicans are so invested in their positions, that they can’t imagine why anyone familiar with those positions could oppose them.

They can’t imagine why women would object to being told that rape isn’t that bad, only whores use contraception, or if they become pregnant, regardless of the circumstances, they lose the right to make decisions about their own health.

They can’t imagine why Hispanic and Asian citizens object to being told that their efforts to fix a broken immigration system are just a thinly veiled attempt to secure amnesty for criminal behavior.

They can’t imagine why young people reject a party that says that homosexuality is sinful and college education should be available only to those who can afford it.

They can’t imagine why educated people reject a party that says that says that creationism is a science and climate change is a hoax.

The Republican Party doesn’t have a communications problem.  Voters clearly understand where the Republican Party stands.  The real problem is that voters REJECT Republican Party positions.

The best evidence of this is the most recent budget debate.  House Republicans passed a reworked version of the Ryan budget that voters had just rejected in November.  In fact, this new budget was, if anything, more cynical than the previous one.  If you recall, the campaign budget had a math problem.  This new budget solves some of the math problem by KEEPING the recently approved tax increases that Ryan and Romney campaigned so hard against.  It also kept the taxes included in Obamacare, which Ryan claimed were job killers, while repealing the rest of the healthcare bill.

The Republican Party doesn’t have a communication problem.  In fact, some of the steps they have recommended (fewer debates and a shorter primary season) may be intended to reduce the amount of information the party shares with the public.

The Republican Party has a philosophical problem.  They underestimate the intelligence of the American voter and their ability to tell the difference between what the party says and what it does.

We Don’t Negotiate With Zombies

Thursday, February 21st, 2013

We’ve spent some time examining the underlying historical and psychological reasons for Zombie Politics.

An additional bit of data came out today suggesting that liberal and conservative differences can be predicted by how our brains respond to risk. Fundamental physiological differences could determine political preferences. That further re-enforces wisdom of our founding fathers in setting up a government which requires compromise in order to function.

That still leaves the open question of what to do about the current problem where some conservative Republicans are so invested in their particular political views that they appear unable to compromise.

Fortunately, we live in a democracy where the majority of voters rejected the most recent Republican campaign based primarily on Zombie positions. Since politicians, just like the rest of us, share survival as a primary motivation; conservative politicians have already taken notice.

We’ve already seen John Boehner disciplining the worst Tea Party offenders in the House in an effort to regain control of that group.

Karl Rove has blamed the Zombie Politics of the Tea Party for the November Republican loss. He has pledged to run more moderate Republicans against Tea Party incumbents and protect moderate Republicans against primary attacks from the radical right.

The most recent example is Florida Governor Rick Scott reversing himself on the federally subsidized expansion of Medicaid under Obamacare.

Scott built his political career on opposing Obamacare. His base of support has been the Tea Party.

He is clearly not the ideologue he has appeared to be. He made the calculation that he will gain more support from changing his position than he will lose. Florida Hospitals in particular were very concerned about how their costs would rise if Florida declined to participate in this expansion of Medicaid. So at the end of the day, Scott demonstrated that he wasn’t crazy after all. He was simply a politician taking advantage of whatever opportunities he could to stay in office. His erstwhile Tea Party backers are furious, but he has decided, just like Karl Rove, that it is time for him to move on.

Over the next several weeks we are going to see another sorting out of those who really are Zombies versus those who have simply been dressing up that way in order to avoid being eaten.

That’s because the Republicans are again poised to lose the battle over the sequester cuts. The Wash Post explains why very simply and it is reflected in this graph.

2013-02-19-Obama-and-Congress-approval

  1. Regular people have no idea what the sequester is right now and, even once it kicks in, aren’t likely to pay all that close of attention to it unless they are directly affected by it.
  2. Obama is popular with the American public
  3. Congress is not.

In fact, even cockroaches are more popular with the American public than Congress.

Pew Research confirms that almost half of the voters blame Republicans in Congress for the problem.

Given all of these facts, and the realities that even conservative politicians know all too well, why are Republicans still committed to what appears to be a suicide mission?

Zombie Politics

Republicans are still invested in the smaller government, low tax, cut spending philosophy that the American people rejected. They feel that they lost credibility in the tax hike compromise that was part of the fiscal cliff deal. If they cave now on sequester cuts, they fear that they will have lost whatever support they have left with their base. They are terrified of what Obama will do next if he wins this battle too. They also believe that they will be able to blame Obama for whatever economic damage the sequester cuts cause and perhaps ride that to a Senate majority in 2014.

The problem is that if they go through with their plan, it will not only backfire on them for the reasons listed above. It will re-enforce the majority view that conservative Republicans DO NOT have the best interests of the country at heart. It will further erode the whole conservative philosophy that government is bloated and wasteful. Instead, virtually every American will experience what life is like without the government services that we depend on and the underlying economic support that government spending provides. The most direct effect will be that unemployment jumps (it already has) as the economy continues to contract (it started in December). The stock market will tank. Air travel will slow. Major defense contracting states (mostly republican) will bear the brunt of the job losses. Meat and poultry prices will rise because of inspection shortages which will affect supply. Head Start classes would close. SBA loans would stop. Federal Research grants would stop. Grants supporting Mental Health treatment would stop. Courts will slow because of lack of investigators and attorneys. More first responders will lose their jobs. Tax return processing and refunds would slow.

Every American will discover that federal state and local governments do a lot of good things. They will discover that government is NOT bloated, inefficient, and wasteful. Government is not a collection of faceless uncaring bureaucrats. The government is us. It is our relatives, friends, and neighbors. They will discover that government is a vital part of everyday life and that the Republican vision of dramatically reducing the size of government is really a nightmare. And they will AGAIN punish Republicans in 2014 as they did in 2012 for intentionally damaging the economy for political purposes.

Gridlock

Saturday, February 16th, 2013

Recap

Conservatives and Liberals look at the world differently.  Because of the conservative need for alignment between their beliefs and the world around them (cognitive closure), they are much more likely to hold beliefs that are out of sync with the facts.  That is at first a counter intuitive claim.  But the reality is that when conservatives encounter facts that call their beliefs into question, they will deny or warp the facts rather than re-examine the beliefs.   That’s called Moral Intuitionism.

The result in the current political scene is a series of political positions that have no basis in fact, but continue to drive the conservative movement.

We’ve looked at a few.

The claim, starting with Ronald Reagan, that the government is the problem.  That caused conservative Republicans, among other things, to oppose Hurricane Sandy relief.  It also was behind the debt ceiling debate and the claim that government doesn’t create jobs.

Government is not the problem, because in a democracy we the voters choose the government, and surveys have shown that voters generally like the government services that they receive.  What conservatives are really saying when they say government is the problem is that liberal government policies are the problem – and that is certainly something the liberals are going to dispute.

The claim, starting again with Ronald Reagan, that lower tax rates will increase tax revenues.  That was refined some under GWB, that lower tax rates on the rich will stimulate the economy.  We’ve already seen that this is not an effective standalone economic strategy.

Some others that are well known include opposition to climate change, insistence that creationism is a science, and opposition to abortion, immigration, and gay rights.

Roots of Gridlock

Another aspect of how this behavior influences politics that we haven’t looked at is regional distribution of liberals and conservatives.  Where did that come from?

Perhaps we shouldn’t be surprised that at least one historian, David Hackett Fisher, traces it back to colonial times.

The north was settled mainly by English farmers, the south by Scots-Irish herders.  They each brought their centuries of mutual distrust with them.  Herders have an honor culture which is important to being able to be a successful nomad.  Their wealth can literally walk away, so they have to respond quickly and forcefully to any real or perceived threat.  When those threats have been identified, they depend on eye-for-eye retaliation to protect themselves.  Farmers, on the other hand, are more secure because it is much more difficult to steal land.  They develop a culture of interdependence, government, and the rule of law.

The farmers in the northeast had come from a Europe where monarchs imposed civilization on their subjects.  The subjects eventually overthrew the monarchs and demanded self-determination, but retained the concept that a strong democratically elected central government was the best way to prevent the country from falling back into anarchy.

The herder culture followed settlers west.  Initially it was a male dominated anarchy with few laws and many honor killings.  As women moved west to help their husbands work the farms and ranches that they had created; churches, laws, and government followed.  But the west didn’t go through the monarch phase where a strong central government essentially disarmed the populace and imposed the rule of law by force.  Instead women imposed the rule of law by compromise and allowed men to continue support the honor culture.

The political distributions we see today are a direct result of these two cultures mixing.  That mix now, however, goes all the way down to neighborhood.  Conservatives prefer to live in neighborhoods and towns with conservatives.  Liberals prefer to live in neighborhoods and towns with liberals.  Toss in a dose of gerrymandering and you have congressional districts where extremism is rewarded and compromise punished.

In North Carolina, congressional districts are either so red or blue that they trend well above the national average in that regard, said David Wasserman, House of Representatives editor at the Cook Political Report.

There are “diametrically opposed viewpoints just across the highway median from each other,” Wasserman said. As a result, in votes like the fiscal cliff showdown, members of Congress “are simply responding to what their districts want.”

“The dirty little secret is that redistricting only explains part of polarization,” Wasserman said. “Congressional districts are polarized partly because Americans have polarized with their feet. It makes it easier for partisan line drawers to draw those lines.”

The result is what we see playing out in Congress today.

Gridlock.

The 112th House was roughly 50% more polarized in terms of makeup than that of the 102nd, which convened from 1991 to 1993.

The 112th’s Senate was more polarized than the 46th Senate, which was in office from 1879-1881, just after the Reconstruction era that followed the Civil War.

Summary

Liberals and Conservatives do not effectively communicate with each other.  That’s because these are emotional discussions about beliefs for Conservatives rather than discussions about fact which is the liberal preference.

The country reflects these differences geographically because of our history.

The current government reflects this differences because of how our representative government is structured.

So is this the doom of democracy or is there a way forward from gridlock to a functioning government?

We’ll take that up in another post.

Zombie Politics and Debt Hysteria

Friday, January 25th, 2013

First a quick summary.

In previous posts we’ve gone through the issues surrounding debt and built a case for economic growth and lower unemployment as viable methods to reduce our debt.  Austerity programs do not stimulate economic growth or lower unemployment, at least in the short term.  They actually make things worse.

We’ve also looked at the REAL problem which is the rate of growth in Healthcare costs.  Austerity programs do NOTHING to bring down the costs of healthcare delivery.  Economic growth also does nothing about this problem.  Yet deficit hawks are not talking about this as the middle term problem we have to solve.  Instead they focus exclusively on reducing the debt.

Why?

Zombie Politics.

This term was originally coined by John Sides.  He defines it as “ideas about politics that have become so cemented in conventional wisdom that it is virtually impossible to dislodge them. It doesn’t matter what the data says, or what published research says. Zombie politics means that even though the ideas are dead, they just can’t be killed.”

Here are a few examples of Zombie Politics in action.

The House prevented any tax increases until after the 12/31 deadline passed and even then only enough Republicans agreed so that it could pass with overwhelming Democratic support.  That’s because a core belief of current Republicans dating back to Reagan is that low tax rates for high income earners have significant economic impact.  Even though this theory has been widely discredited, most recently by the Congressional Research Service; it lives on as the cornerstone of Republican politics.

Hurricane Sandy relief was voted down because, to quote Paul Ryan, “Unfortunately [the bill] refuses to distinguish — or even prioritize — disaster relief over pork-barrel spending.”  Rep. Peter King (R-N.Y.), a powerful House Republican who represents New York’s Long Island, which sustained billions of dollars in storm damage, refuted those claims. “The House bill never contained any of those extraneous provisions,” he said.

New Jersey Gov. Chris Christie (R) said on Wednesday that the failure to vote on the aid bill was the result of “toxic internal politics” in the Republican Party. “Americans are tired of the palace intrigue and political partisanship of this Congress,” Christie said. “Disaster relief was something that you didn’t play games with.”

This isn’t the first time that Republicans have opposed disaster relief.  In each case, the same complaints about “pork barrel spending” and “unsupervised slush funds” are voiced, but those are just code words for the core issue.  They honestly don’t believe that government can play an effective role as the relief agency of last resort.  That’s because they hold fast to the zombie view that government is America’s number one problem, not its solution even in these cases of extreme need.

The first debt ceiling debate is another perfect example.  Republicans claimed that letting the president have increased spending authority is irresponsible.  Quoting FactCheck.org, “Republicans, including House Speaker John Boehner and Rep. Michele Bachmann, have said that the president wants ‘a blank check.’ Not true. First, he’s asking to borrow money to pay obligations Congress has already approved.”  Yet this characterization that increasing the debt ceiling somehow empowers Obama to spend MORE is another zombie proverb.

Another zombie maxim is that jobs are created by less government, lower taxes, and fewer regulations.  This has been boiled down recently to the frequent comment heard during the last campaign that the government doesn’t create any jobs.  Yet World War II is largely credited with the recovery from the Great Depression by the massive government spending which converted the country to a government run munitions factory.

These disproven zombie concepts have been summarized by Grover Norquist when he said, “Our goal is to shrink government to the size where we can drown it in a bathtub.”   The problem is that, contrary to Republican claims, the vast majority of American LIKE much of what modern government does.

Should Spend More

Spending About Right

Should Spend Less

Don’t Know or No Answer

Protecting the environment

59.8%

27.9%

7.7%

4.6%

Protecting the nation’s health

66.8%

25.0%

5.6%

2.6%

Halting the rising crime rate

60.9%

28.4%

9.3%

3.0%

Dealing with drug addiction

58.2%

27.9%

9.3%

4.6%

Improving the education system

69.7%

22.1%

6.3%

1.9%

Social Security

55.7%

31.9%

6.3%

6.1%

Solving urban problems

45.5%

29.8%

12.1%

12.5%

The military, arms, and defense

17.5%

46.3%

30.3%

5.9%

Highways and bridges

38.2%

47.1%

9.6%

5.1%

Welfare

16.0%

36.1%

43.3%

4.6%

Parks and recreation

34.0%

55.2%

6.1%

4.7%

Mass transit

31.7%

47.3%

9.4%

11.5%

What we are left with is a minority segment of the voting public and their representatives who are determined to REDUCE the size of government at every opportunity.  Their beliefs ARE NOT based in fact, but that doesn’t appear to bother them.

The best policies are not those that have the most likelihood to succeed.  The best policies are the ones that will ultimately reduce the size of government because this is their religion.

Don’t get me wrong.  I am a religious person.  I DO believe in God and the power of prayer.  But I don’t believe I have any right to impose my beliefs on anyone else.  When it comes to governing a country, we have to depend on good data rather than religious belief to confirm that our course is going to benefit the majority of our citizens.

In the next couple of posts let’s see if we can dig into data supporting this claim that conservative republicans possess a blind unreasoning commitment to a particular point of view, why this leads to zombie politics, and why this is something that appears UNIQUE to the conservative movement.

The REAL Financial Problem

Sunday, January 13th, 2013

As we saw in the previous post, our near term fiscal issues ARE NOT the result of irresponsible spending. They are the direct result of the deepest recession in our country’s history, surpassed only by the great depression. Part of the legislation put in place after the depression to prevent a repeat of that economic collapse included a social safety net. This safety net provides those who find themselves in dire financial condition, a floor of support below which they can’t drop. This set of interlocking programs also limits the economic damage of any contraction by keeping at least some money flowing from consumers to producers. It’s this safety net spending along with the loss in tax revenue from having excess capacity in workers and factories that is driving $600B of our annual deficits. That extraordinary safety net spending is decreasing and tax receipts are increasing as the economy recovers. The spending will disappear when we approach full employment and robust economic growth.

The REAL problem on our economic horizon is handling the cost of the baby boomer retirement and the impact that it will have on Social Security, Medicare, and Medicaid.

Moreover, an increasingly large portion of the debt is money that the government owes to itself because of borrowing from large entitlement programs such as Social Security and the Medicare. That’s because the money spent on discretionary programs has generally declined, as a share of the economy, while spending on mandatory programs has soared — and will only consume a larger share of the economy as the Baby Boom generation heads into retirement.

In fact, the debt owed to entitlement programs is now almost as large a share of the economy as all U.S. government debt before Ronald Reagan became president.

Washington Post

The Demographic Problem

The Baby Boomers are a large cohort of the population (70M+) that are going to be retiring over the next ten years. Programs like Social Security and Medicare use taxes from today’s payroll to pay the benefits for today’s retirees. If the population growth tracked GDP growth, this wouldn’t be a problem. When you have large demographic anomalies like the Baby Boom generation, you end up with a situation where there aren’t enough workers to support the costs of retirees.

Fortunately the solutions to demographic problems are comparatively simple. You either adjust benefits based on income, change the age at which people qualify for benefits, or change the tax formulas on those funding the benefits.

If you did some combination of those things, Social Security would be fine, but Medicare/Medicaid would still be in trouble.

The Healthcare Problem

Our healthcare system is also broken. The result is that the rate at which healthcare costs are growing exceeds the GDP growth rate. That is unsustainable under any circumstances.  When you combine that problem with the undeniable demographic issues of the Baby Boomer, more systematic changes are required.

Spending in General is NOT the Problem

These inexorable demographic changes mask the fact that over the past four years we have experienced historic levels of fiscal discipline. While there was a temporary and necessary spike in spending from the Recovery Act, annual appropriations actually declined by 1.4 percent a year between 2008 and 2012 in inflation-adjusted dollars — after growing by 6.1 percent a year during the George W. Bush administration.

NY Times

Real Solutions to Real Problems

Obamacare is the first step in changing the healthcare business model. Here is a short list of the next steps to change our healthcare delivery model from a transaction model to an outcomes one. These come from a report by the Commonwealth Fund. The Commonwealth Fund contracted with Actuarial Research Corporation to estimate the cumulative impact on healthcare spending by 2023 if the set of policies were to take effect in 2014. Results showed a $242 billion savings for state and local governments, $189 billion in savings for employers, and $537 billion to consumers because of lower premiums and out-of-pocket costs.

Revise the Medicare physician fee structure and methods of updating payment so that it rewards value. The sustainable growth rate formula should be repealed and replaced with a physician payment policy that incentivizes improvements in health outcomes. Such a system would only provide increases in payments to doctors participating in innovative delivery systems. Fees would otherwise remain at 2013 levels. This will force those physicians reluctant to leave the comfort of their transaction model based medicine to change.

Medicare also should be allowed to institute competitive bidding for medical commodities. The medical commodity lobby has so far prevented Medicare from applying the sort of market-based bidding that every other industry uses to drive down costs.

Strengthen primary care and support teams for high-cost, complex patients. Primary care physicians who participate in a patient-centered medical home would receive enhanced payments. The structure would provide incentives to improve patient outcomes. It will also insure that physicians continue to enter the primary care field of practice, rather than simply being employed by vertically integrated systems like Kaiser.

Bundle hospital payments to focus on total costs and patient outcomes. Providing a single payment for all care during an episode would provide incentives for teamwork and accountability to reduce readmissions and follow-ups.

Adopt payment reforms across markets with public and private payers working together. Ensuring public and private payers employ the same or similar payment methods would reduce complexity for physicians and others in the healthcare system.

 Reform medical malpractice rules and payout policies. Medical liability policies should encourage the disclosure of medical errors and provide fair compensation for injury and medical costs.

The goal is to bring the rate at which healthcare costs grow in line with GDP growth. If that can be done, then the Medicare/Medicaid problems becomes one dimensional just like Social Security and will yield to the same sorts of solutions – means tested benefits, increasing the age requirements, or changing the tax formula.

Summary

The near-term financial issues with large deficits that we face ARE NOT the result of irresponsible spending. They are the result of social safety net increases and tax receipt decreases due to high unemployment and slow financial growth. Those both can be fixed through more robust economic growth. So they are NOT systematic problems.

We DO have some systematic medium to long term problems with Social Security, Medicare, and Medicaid. Those problems are due to the demographic anomaly called the Baby Boom and our antiquated healthcare system. Social Security and Medicare need some changes to deal with the demographic issue, but that won’t fix the healthcare system. That also has to be fixed in order to preserve Medicare and Medicaid as viable programs.

Next let’s look at how some conservatives have tried to create a debt hysteria and what their motives might be.