Debt, risk and lies

The following is a comment I posted on our friend Jill’s blogpost where she has penned an excellent letter firing the president. See below for a link. There is good back and forth between two of her followers, which is good for its content and civility, the way it should be. Since the debt came up as one issue, as a failing of many presidents including Obama, I used that as one example. These are the views of this independent voter who has been a member of both parties and defines himself as fiscally conservative and socially progressive.

Just taking the debt as one issue, while Obama will be remembered as a pretty good president, to me a key failure was to put on the shelf the Simpson-Bowles Deficit Reduction Act. Dems and Reps did not like it as for every $1 of tax increases it asked for $2 of spending cuts. Obama should have said, let’s start with this and make changes. What both parties fail to understand is we need both spending cuts and tax increases to solve the debt – the math will not otherwise work.

That was when the debt was about half of what it is now. I find the Freedom Caucus who got elected on reducing the debt the height of hypocrisy when they voted for a tax law change in December 2017 that increased the debt by $1.5 trillion – we did not need that, so now when we spend $2 trillion because of COVID-19, we have to go deeper into the well to borrow money.

On top of the many reasons not to vote for Trump (climate, environment, corruption, chaos, lying, global leadership retrenchment, et al), his cavalier short term financial focus to prop up a long running pretty good economy to be a little better for a little while was indicative of why he had six corporate bankruptcies and other failed investments. Even on the COVID-19, his primary focus has been his image, first, the stock market second (his proxy for the economy) then the people, third. This is not a recipe for good decisions and is one reason for his inconsistency.

But, at the heart of all of this, is I do not believe a word the president says and that makes me sad. All presidents lie to some extent, but this one is the most corrupt and deceitful president in my lifetime including Richard Nixon and he was a crook.

But, before we burn the government down, please read Michael Lewis’ “The Fifth Risk,” which reveals the true risk heightened by this “chaotic and incompetent” president’s White House (per conservative pundit David Brooks) and that is the gutting and hamstringing of people who know what they are doing to serve us. Could they be more efficient, always? But, for the very large part, they are dedicated public servants trying to do a good job. Lewis based his book on the required briefing materials prepared by the outgoing administration that went largely unread and not even picked up when briefings went unattended by incoming (or not even appointed) Trump people.

YOU’RE FIRED!!!

Voting for Trump is not a favorable vote for Bernie

Note the following is a comment I made on our friend’s Jill’s recent post. See link below.

I have written separate posts on the relative veracity of Biden and Sanders. I have commented on a couple of progressive sites as well. I will vote for Sanders if he is the nominee, but I favor Biden. I am an independent who is fiscally conservative and socially progressive. I believe in helping people, but we need to make sure we pay for it and are getting a ROI (i.e. – is this the best way to help?).

Biden and Sanders are genuine and decent people. Neither are perfect, but I don’t find myself questioning the veracity of what they say. None of these descriptions fit the bill with the incumbent. I also recognize what too many don’t that America’s economic system is a blend of fettered capitalism with socialist underpinnings. That simple statement would blow people’s minds.

The question we need to ask is what is the proper balance? That question does not fit on a bumper sticker which is how the president got elected. I am just saddened that our reputation around the world has declined with 64% of Europeans not trusting the president trusting Putin and Xi more. To be frank, I am surprised it is not higher in distrust, as I don’t trust a word he says.

And, neither does Bernie Sanders who calls him a “pathological liar.” So, when I see Bernie fans say they would vote for Trump over Biden it is a puzzlement. I think it is an insult to everything Bernie stands for. I would also caution my more ardent Bernie friends to make sure who they are getting their information from, as it easily might be a Trump supporter masquerading as a Bernie Bro. Trump has and will stoop low to get reelected.

Finally, my friend Bernie is not getting the votes like last time. I was pulling for a good interview on “60 Minutes,” but his subtle answer to a question about Cuba cost him Florida in huge way. One Democrat said it may have lost Florida for the Dems if he wins the nomination. Trump cannot win if he does not carry Florida.

So, I do hope we rally around Biden. Otherwise, the climate change and environmental fights will be lost for a key four year period (per Greta and AOC) and SCOTUS will likely become a 7 to 2 conservative majority along with other judges. This point galvanizes Republicans as Mitch McConnell knows he can shape a future of jurisprudence that favors big business and is diminishes civil rights for forty years.

Discord & Dissension — Part X — Bernie or Bust?

A weekend at Bernie’s

Yesterday, I spoke of the value proposition of Joe Biden. While I need not tell this to those “who feel the Bern,” Bernie Sanders value proposition needs more selling to those who may not be so enthralled. But, what is missing from a true evaluation is needed context.

The US economy is not a pure capitalistic system and, has been much less of one, since the changes required by the Robber Baron period. To be frank, this is the period Donald Trump wants America to return to and with the tax cuts and vast deregulation, we have come closer than before to this oligarchy period. Since that time, we have added several “governors” on capitalism and layered in some socialistic underpinnings to protect those in need. On the former, think interlocking boards, collusion, monopolies, insider trading, and bankruptcy restrictions and protection. On the latter, think Social Security, Medicare, Medicaid, Unemployment, Workers Compensation, food stamps, etc.

So, the US is a fettered capitalistic economic system with socialistic protections. And, to make this even more obvious, if we did not have bankruptcy protection, Donald Trump would not have any money as his companies have declared bankruptcy six times. This context is needed, as the debate we should be having is what is the right balance?

Bernie is pushing for several changes that would add more socialistic protections for people. He has also discussed the government taking over the quasi-governmental, but publicly traded utility industry, to address climate change. Addressing climate change is key, but is that the preferred path forward? As an independent and former Republican and Democrat, I would much prefer the argument to be shaped with the context I note above.

As an example, Medicare for All is something to consider, but it should be evaluated with detailed cost projections on what it means for various groups of people and taxpayers. There are many considerations such as should it be obligatory, should it be an option, should it be an extended version of the current system to younger retirees, etc.? As this will take time to evaluate, shoring up the ACA is needed. I mention this as if Democrats don’t keep the House and get 60 senators, Medicare for All will have difficulty getting considered. But, if framed as something to study, it may get consideration.

While Bernie is much scarier to some as much as he is appealing to his base, it would behoove us to consider the following. Bernie is a decent person with integrity and compassion. None of these three words could be legitimately used to define the current president. It is all about Donald Trump. It is that simple.

I believe Bernie is not as scary as portrayed by the right and he should not be as aspirational beyond what he can deliver. Just like tax cuts, free stuff sells. But, everything has a price tag. The better answer is what makes the most sense to do, based on impact and cost, and the fact we have $23 trillion in debt, expected to grow to $35 trillion. If Bernie is the nominee, I would prefer him to offer needed context to his discussions. Otherwise, he is getting people wound up for disappointment.

Wednesday wanderings the first week of March

Well, March Madness will be thrust upon Americans later this month, so everyone get ready for the various brackets for the NCAA basketball tourney. Madness may be the operative term for the world these days, but please note things are usually not as bad as reported, as good news is vastly underreported and does not have as high a bounce as a negative news.

Here are few thoughts as a wander this Wednesday.

The Coronavirus will be more prevalent than first thought, but it seems not as deadly as other viruses. Still, those who are not in good physical shape with breathing issues, circulation issues, obesity issues, etc. should be prepared to more abruptly deal with symptoms. Sadly, since the US president has made this a personal political issue, listening to politicians talk, whose first mission is to protect the Trump brand, is not reassuring. I want to hear from experts.

Many financial people have forewarned that using stimulus tools to prop up an economy and stock market when it is going pretty well is not the best time to deploy them. When they are used now, what will you use later? The economy is still doing pretty good, but has been softening for more than a year. And, the stock market has been in need of a downward adjustment for some time. But, the president views the stock market as a key barometer, so he takes it personally when it falls, even though, he has little ability to control it long term. Yesterday, the market did not react very well to the Federal Reserve lowering interest rates 50 basis points (1/2 %). To me, it was seen as a panicky move, but smarter people than me will have to judge this (note, the market got a bump today in reaction to Biden’s success in the primaries).

While I like Bernie and will vote for him if he is the nominee, America breathed a sigh of relief yesterday with former VP Joe Biden’s rebound performance. As an independent and former Republican and Democrat, I am fiscally conservative and socially progressive. I very much believe in helping people with opportunities and to climb a ladder when disenfranchised. But, we need to pay for things. Right now, we have $23 trillion in debt and it is projected to increase to over $35 trillion by the end of the decade. We must deal with this obstacle, while we do other things – pay for infrastructure improvements, shore up the ACA, Social Security, etc. With this in mind, while both are good people, Biden will be better positioned to bring folks together to do that – Democrats, independents and even some Republicans.

If Bernie wins the nomination, I hope he pulls in a more moderate Democrat as his VP candidate. If Joe wins, it would be great if he tapped someone a little more progressive than he is. One of the dilemmas is the Democrats need to think about the future, as neither person is a spring chicken. I like listening to folks like Pete Buttitieg, Andrew Yang, etc. as they have a well-considered ideas, even if you don’t agree with every thing they say.

Whatever happens, Democrats need to vote for their candidate as four more years of the most corrupt and deceitful president in my lifetime, including the corrupt Richard Nixon, will not be good for America. I have said and written this to Senators and my Congressman, but regardless of party, we cannot have a president who acts the way this incumbent does. He is a national security risk and quite simply, America is no longer trusted as before, because the president is not trustworthy. Plus, we cannot lose sight of more aggressively addressing climate change and environmental degradation that have been made worse and would deteriorate more on his continued watch.

Don’t believe your eyes

Yesterday, Secretary of the Treasury Steve Mnuchin testified in front of Congress that the tax cut of December, 2017 would pay for itself before ten years. Really?

This is after the nonpartisan Congressional Budget Office said the tax cut would increase the national debt by $1.5 trillion before it was signed.

This is after we have witnessed the deficit increasing over previous projections the past two fiscal years.

This is after the president said the tax cut would increase GDP growth to 4%. It rose from 2.3% in 2017 to 2.9% in 2018, but softened to 2.1% in 2019.

This is after previous studies that said no tax cut has ever paid for itself. In fact, it is quite nervy to say it would – think of that statement. “It will pay for itself.”

It takes even more nerve to sit in front of Congress and say that it still will, now that the sugar rush has died off. Companies tended to buy back shares with the tax gain rather than invest the gain.

In short, the tax cut borrowed from our future to make a pretty good economy a little better for a little while. For Mnuchin to follow his boss’ lead and ignore facts is troubling. We have a debt and deficit problem that is being downplayed. To solve a problem, it requires admitting we have one.

Annual US Deficit projected to pass $1.5 trillion on 2028

One of two nonpartisan organizations that have been ringing alarm bells about US debt and deficits is The Concord Coalition (TCC). The other is the Committee for a Responsible Federal Budget. We should be listening to these folks and urging politicians to do the same.

In a press release, Bob Bixby of the TCC notes the Congressional Budget Office (CBO) projects the US deficit will pass $1 trillion this fiscal year ending 9/30/2020. In eight years, the CBO projects the deficit to pass $1.5 trillion. My guess is it will be sooner, given politicians being too infatuated with adding expenses and cutting taxes.

It should be noted we are now passed $23 trillion in US debt. Sans change we look to soar passed $35 trillion by the end of the decade. This means our annual interest cost will be a much larger chunk of our budgeted annual revenue which is around $3.65 trillion.

Two key points need to be made. With our pretty good economy going on 128 consecutive months of economic growth, we should be decreasing our deficit, not increasing it. Sadly, we were sold a tax break that helped a pretty good economy get a little better for a little while, but will add over $1.5 trillion to the debt.

The other key point needs to be said loudly. Our debt cannot be solved by only expense cuts or tax increases. The math will not work. It will need both. Do not let politicians tell you otherwise. It matters not how fervent or well they speak, the math will not work. We need politicians with thick skins and lots of courage.

What is the Trump record? – letter to the editor

While may newspaper has not published the following, I thought readers might like to see a brief comment.

Almost daily, I read Trump’s record as either the second coming or atrocious. If we set aside his boorish behavior for the moment, I see an economy continuing at a pretty good clip at 127 consecutive months of growth, but Trump has only been president 36 months. I see tariffs and trade fights which have and will dampen economic growth. I see the US global leadership diminished because of withdrawing from the Paris Climate Accord, Pacific trade deal and Iran nuclear deal and 63% of Europeans not trusting the US president. I see US debt and the deficit exploding at a time when we should be making strides to pay down both.

And, smart deregulation is fine, but allowing companies to pollute more has a human and economic price tag. Finally, I see us not adequately addressing climate change, healthcare, gun governance or poverty issues.

The overriding problem is we cannot set aside his bullying, untruthfulness and denigration of critics which has made us less a democracy.