Debt and more debt

The following is a brief sample letter to the editor on the US debt problem that is being unwisely ignored. Please feel free to adapt and use if you agree.

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The last time we had a balanced budget was when Bill Clinton left office, but we still had debt. Now that debt is about $21.5 trillion and is expected to grow by almost $12 trillion by 2027. The tax reduction law passed last December will increase the debt by $1.5 trillion and the spending bill from the spring will add to it as well.

The annual deficit is once again approaching $1 trillion, which is about 30% of our annual tax revenue. I believe it was poor stewardship to increase the debt with the tax change and now I understand another tax bill is in the works. We cannot cut our way out of this problem – we need both spending cuts and more tax revenue.

A day of reckoning will come and future legislators will have to address this poor financial stewardship by three Presidents and their Congresses.

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Not so Freaky Fridays anymore

It seems that news people recapping the week are in a continual, almost weekly, loop saying the President had a difficult week. One week it was the appropriate backlash on his Helsinki acquiescence to Vladimir Putin. Another week was the conviction and confession of two of his cronies. Earlier it was the detention of migrant children away from their parents. And, there are many others.

This past week started last Saturday with the funeral of a true hero and honorable public servant, an event to which he was purposefully uninvited. Not being invited to the national mourning of Senator John McCain was bad enough, but his modus operandi was appropriately criticized without mentioning his name by more than a few speakers.

By itself, this event would warrant a bad week, but it was followed by the release of excerpts from highly credible reporter Bob Woodward’s book on the disruptive White House environment. For younger voters, Woodward was 1/2 of the team that broke the Watergate story. While nothing surprising about Trump was revealed, it was reassuring that the President’s people do their best to keep him between the white lines.

While the White House was in full damage control mode, an anonymous op-ed was published in The New York Times by an insider which echoes much of what Woodward’s book reveals. It should be noted that the both pieces echo some earlier books that were also denounced by the White House, as well as previous leaks and actual observations by reporters.

A few comments are in order:

– Many GOP legislators are painfully aware of these shortcomings of the President, but choose not to act. Right now, supporters are ignoring the consistent message and focusing on the messenger.
– A plausible reason the anonymous op-ed writer has not gone to Congress is it would likely not do any good given the willingness of too many GOP sycophants wanting to save their tribe and not do their job.
– The President’s boorish behavior is not a secret, except to his base, who water down the criticism. What is known by fewer folks is what conservative columnist David Brooks noted as early as last year regarding various mismanaged events when he said the “White House is equal parts chaos and incompetence.”
– But, his offensive behavior and poor management predates his campaign and White House. Five biographers note Trump’s problems with the truth and financial reporters have lauded his sales skills, while being critical of his poor management skills. It is easy to see why he is deemed a poor manager given his ego, temper and lack of attention to detail.

What frustrates me as well, I have consistently reached out to Senators and members of Congress usually after various missteps or misstatements by the President. Two questions I often ask are “is this the man you want to spend your dear reputation on?” and “what will it take for Congress to act?” Seeing us bully our allies and forego our global leadership role is highly frustrating. Seeing us make changes that favor corporations and wealthy is another. Seeing us ignore climate change and our building huge debt are yet more concerns. But, the lying, denigration, name-calling, admiration for autocrats and disdain for democratically elected leaders takes the cake.

You may have noticed I have not mentioned the Russian collusion issue or his historical sexual misconduct. More will come out on these issues, but I find it of interest the lone constant in both issues is the story changing by the President. This is a key reason he did so poorly on a mock deposition in preface to a possible real one with Robert Mueller. The contradictions abounded.

So, I leave you with the questions I asked the GOP legislators above. Apparently, this is the horse they are going to ride. My added question is where will he lead you? And, us?

Capitalism and socialism coexists

On more than one occasion, I have seen letters to the editor speak of setting up beachheads in the coming election around capitalism vs. socialism. To me, this is a name-calling gimmick to persuade a voter who does not do much homework. Voters that are prone to listen to name-calling as debate will buy into this logic time and again. The irony in this debate is the United States’ economy is a blend of “fettered” capitalism with socialistic underpinnings. So, both co-exist here.

For readers in the either camp, this observation probably surprises them, especially those who are gung-ho capitalists. But, the word in quotes is also important as we do not have unfettered capitalism. If we did, the US President would have run out of money long ago with his many bankruptcies. I believe in capitalism as well, but we need to understand why we ventured down the path of the socialistic underpinnings.

These underpinnings spoke to a nation that was in a great depression and who seemingly got lost in poverty later on. Social security is a low-income weighted pension, disability and survivor benefit program that is funded equally by employers and individuals. To determine the base level benefit, 90% of average wages are used for the earlier wages then added to 32% of the next tier of wages which are added to 15% of the highest wages up to a limit.

In the 1960s, LBJ’s “War on Poverty” added Medicare and Medicaid to the mix, with Medicare helping retirees and Medicaid focusing on people in poverty. Then, we can mix equal measures of unemployment benefits, workers’ compensation and food stamps which are now called SNAP benefits. Each of these programs are forms of “social insurance” benefits. That is socialism designed to keep people fed, housed and protected.

Taking this a step further, utilities are so needed to our communities, they are either co-ops or fettered capitalistic models where rate increases must get approved by a state governing board. Companies like Duke Energy and Con-Ed must get permission before they change their rates. For the co-op model, the customers own the business.

But, the word “fettered” enters into the mix on other businesses as well. To prevent monopolies, insider trading, interlocking boards, collusion, the misuse of insider knowledge by investors, etc. rules are set up to provide governors on capitalism. Then, there is that bankruptcy thing, where a business or person can claim bankruptcy to pay debtors what they can and restart. I use the President as an example, but his experience is a good one, as he filed for bankruptcy six times on various investments.

I want people to think about our country in this context. We want people to earn their keep and be fully functioning tax paying citizens. Yet, we have programs in place to keep them out of the ditch. As we considering changes to programs, we should consider what they are accomplishing and how changes could make them more effective. And, we must understand that things must be paid for, so how do we get the best return on the investment into those stated goals?

For those that have followed my blog for some time, you know I have been involved for many years in helping homeless working families find a path back to self-sustainability. We help the homeless climb a ladder, but they climb it. Yet, we are also successful in keeping people housed on their own after two years of leaving our program because we measure things and make improvements. The ultimate goal is self-sustainability, so we measure how we can be the best financial stewards toward helping people achieve that purpose.

We need social underpinnings to help people be fed, housed and protected. Some need to be temporary in nature, while others are longer term like Medicare and Social Security. There is a cost-benefit to these equations, but we should understand that we have poverty problem in our country. We must also understand technology advances will continue to change the paradigm on employment as it has throughout the industrial age placing additional pressures to even more wage earners. Not providing ladders out of poverty or ways to avoid it would be a bad path to follow for our country.

 

Questions for Campaigning Republican Legislators

Our diligent and thorough blogging friend, Gronda, wrote a post regarding answers to questions that Republican Party leadership provided GOP candidates. Most of the questions are of many of the messes the President finds himself in of his making, but truly miss the boat on where Republicans and the President have failed to address larger US and global issues.

There is plenty to ask about of these legislators. Here are a few of my questions:

– why are you allowing the easier maltreatment of our environment by industry?

– why are you supporting leaving the Paris Climate Change Accord ignoring the rest of the world?

– why have you failed to address our water concerns in Flint and similar places?

– why have you not only ignored our rapidly rising and expensive debt, but made it worse?

– why have you stood by and let the President trash and cut our diplomacy staff and bully our allies?

– why are we placing tariffs on everyone, without concern for past failures and ignoring better channels to address China involving our allies?

– why have you not listened to Americans and improve the ACA actually harming it instead?

– why have you not done anything to materially address gun governance?

– why have you allowed a President to trash our hard working people in important government departments to create an illusion of conspiracy to save his hind end?

– why have you tolerated a President who believes the civil rights of whites matter more than that of other races?

– why are we doing things to make our poverty problem worse, not better?

– why have we not addressed infrastructure with our significant needs and resulting job creation when interest rates were lower?

That is a start. These folks have a lot to answer to. To be frank, all Americans should be asking these questions, but if I were a young person, I would be even more alarmed. Just with climate change and growing debt, this party is screwing our youth.

But, there is so much more. I am an Independent voter who left the GOP over ten years ago because of their failure to speak to the truth on real problems – Trump has made it worse and his followers have been conned to believe the opposite.

Cognitive dissonance prevents further unraveling

I have been using the analogy of a wound ball of yarn unraveling to describe what is happening with Trump voters. The outer layers represent the more moderate and rational voters who have seen what Trump represents and their support is unraveling. As the ball gets smaller, the unraveling becomes more difficult as the yarn is coated with cognitive dissonance.

One dictionary defines cognitive dissonance as “the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change.” A definition I hold is calling the dissonance a “disharmony” that is upsetting to the person as it is at odds with what they believe.

When a person is confronted with facts that diminish their belief, they often run home to some source of information to tell them the facts are not true. This is s key reason people like watching pseudo-news sources that tell them what they want to hear. Some even rely on the President’s tweets as a source. But, that is not news – that is opinion from a biased source.

So, unraveling those inner layers is harder. The key to getting through is listening to them and asking follow-up questions. I have cited the example of how an African-American man was able to convince over 200 KKK members to cede their robes. He asked them questions, listened to their answers and followed-up with probing questions. This is as ardent a group of people as could be found, but even an object of their hate was able to reach them and alter their beliefs.

So, in this spirit, here are a few opening questions to pose to folks who disagree with your opinions. Then, listen and follow-up with more probing questions.

– What are your thoughts on placing tariffs on countries?

– What are your thoughts on the President’s meeting with Vladimir Putin?

– What are your thoughts on rolling back environmental regulations?

– What are your thoughts on the economy and our rising debt burden?

– What are your thoughts on the lack of efforts to rein in increasing health care premiums?

– What are your thoughts on better governing immigration issues?

These questions may not lead to opinion changes, but it may help gain some common ground and reveal the problem is more complex than being discussed. Some issues are not being discussed much at all.

Cognitive dissonance is a powerful coating  of protection. Emotion won’t crack it. It can only be unraveled through dialogue.

Infrastructure, India and Intellectual Capital

These are three very powerful “I” words – Infrastructure, India and intellectual capital. They are related in one key fashion. The failure of the US to address each of these issues has hastened its forthcoming demise as the world leading economy. China, of course, plays a key role, but we sometimes lose track of the other fastest growing economy in India, who has been creating a technology proficiency that rivals and may surpass Silicon Valley.

Per Vice News, India is well positioned for two key reasons. They have one billion people and are much more heavily focused on STEM education than the US. Even if the US had the same focus, India is three times larger and has been doing major call center and technology outsourcing for US and other companies for years. Now, they have companies that only focus on the domestic market in India. And, one other key is important. Indians who have traveled to the US to be educated are returning home rather than staying here. Why? Opportunity back home and the fact the welcome mat has been thrown away by the current US President for immigrants of color.

The other two “I” words are crucial. India is investing in their infrastructure and intellectual capital. The US has forgotten what got us to a world dominant economy. In the book “That used to be us: How America fell behind in the world it created and how it can come back,” by Thomas Friedman and Michael Mandelbaum, it describes an America that used to invest along with a blend of local government and private funding to do great things. Now, we are more concerned with cutting revenue to dare fund things like our dilapidated infrastructure and intellectual capital.

Both the US Chamber of Commerce and labor unions have been pleading for years to invest more in our infrastructure. While interest rates were low, it was the ideal time to borrow to invest in depleted assets. Infrastructure investing also would create jobs and enhance productivity, the latter through saving of time by reducing the time when roads, canals, locks and bridges have to be shut down for repair. The President rightfully noted this need on the campaign trail and then shelved a report to do anything about it one month into his Presidency. Who says so? The man he asked to do the report.

Like India, we should be investing in new technologies and our infrastructure. Plus, we should be more welcoming of immigrants, especially those who are educated here. Innovation is portable, so if these folks leave the US, the Innovation will occur elsewhere. This coupled with a better and protective patent system will promote growth.

Like America, India is not perfect. But, they are focused on the future moreso than the US leaders are. We tend to be focused more on protecting legacy industries, than greasing the skids for new ones. Fortunately, other Americans are more forward thinking, in spite of our leaders. But, it would be nice if we helped them out more.

A few select statements

A counterpoint response to my comment that the President needs to tell the truth more than he does not, might be “all politicians lie.” Yes, they do, but he laps the field at a 69% rate of untruthfulness per Politifacts.  But, he also makes decisions off his supporting lies.

One that gives me concern is “You can win a trade war.” History has shown this not to be true and we will soon be finding out as Canada just added their retributive tariffs to those of the EU and China. By the way, the lone constant in these three tariffs is the US. The impact is already showing up in economic decisions by companies,

Today he said “the tax cut is the reason for our economic miracle.” That is a stretch in that we are completing 108 consecutive months of economic growth today, which is the second longest in US history. He has only been President for a little more than 17 months and the tax cut has only been in effect for 6 months. As for the long term, I am worried about the tax cut increasing our huge and increasing debt. To be frank, the tax cut will help some short term, but hurt us in the long run.

Yesterday, he noted again “Russia said they did not meddle in our election,” to me implying his tacit support. But, the US intelligence asserts with high confidence that not only Russia did, but the Trump campaign benefited from it. Plus, they said the Russians are still influencing opinion and sowing seeds of discord. The question we must ask is why? Why say this? Why let it go on? Why is Congress not more assertive to get to the bottom of this? Why do you people believe him when he calls the investigation a witch hunt?

Finally, the Affordable Care Act is in need of stabilization and select improvements. Instead, it has been sabotaged at the expense of Americans, once by Congress in 2015 and just last summer by the President. When he defunded payments to insurers for copays and deductibles for families making less than 2 1/2 x poverty limit, he said “it would only impact insurer profits.” That is simply untrue. The CBO noted that the impact would increase the debt by $10 Billion. Why? As insurers raise premiums as a result of picking up this unfunded tab, the premium subsidies would climb by $10 Billion. That means it effects taxpayers by that amount.

The sad truth is there are numerous instances where lies and oversimplified problems and solutions have caused policy decisions. It is hard enough to solve problems when we use facts. It is nigh impossible when we don’t. The truth matters.