The world is reeling and rocking in real physical terms. Not talking about gyrations produced by an electric guitar. Earthquakes, tsunamis, droughts, hurricanes, floods, and tornadoes cover the world and spare no one. Extraordinary human suffering and grief.
Many would say, we have always had these phenomenon; that’s how they get their names. Yet, our inner instincts tell us our time is different. the named calamities are more frequent, more severe, world-wide and more devastating in their psychological and economic effect.
The South, and here in Tennessee, was stricken in mid-week. Up close and personal suffering is what it is all about. Suffering and devastation that will not disappear or be fixed the next morning, or the next month, or the next year.
To truly appreciate the value of opinion polls you must examine the public opinion on our debt crisis. Remember, almost everyone credible agrees that medicare and social security is not sustainable as currently designed by governing laws. Also, that you must get into the middle for any revenue relief via taxes. The middle class is where the big numbers are located. Now, what do polls reveal the public says about these dire propositions. They say, “don’t mess with my Social Security; don’t mess with my Medicare; and don’t raise my taxes!”
This week the congressman from the 1st District of Tennessee announced a Federal grant to hire a half-dozen or so firemen for a local community. This was a public relations announcement, complete with local television reports, etc. I thought, how anachronistic ! This is what congressmen did in the 60’s and 70’s and even later. But now ? The irony being the same congressmen who tout the Federal gifts can go to the Rotary Club next week and tell that group how he is fighting Federal spending.
The generous news media rarely calls out this distinction and hypocrisy. Local communities and even most states are better positioned to hire firemen than the Federal government. But, it’s about re-election for the incumbents. Re-election first and always. For now, the public is not well-informed enough about the seriousness of our debt or fiscal condition to care. But, education is coming.
For a couple of nights now NBC news anchor, Brian Williams, has asked for a straight answer about climate change. Partly, a leading question, as he asked about human responsibility. Tonight, he got a straight answer to the first half of the question. Jim Cantore of the Weather Channel said, ” the earth is warmer and the jet stream has to work harder to get balance.”
In considering the national debt and how to reduce it and make it more manageable we have alternative views. Maybe, just alternative posturing.
The Republican view takes the position that with enough incentives in the tax code we can grow the economy, reduce unemployment, and ease the social safety net or welfare. This would, in time, solve the debt problems by reducing government costs. This is a cruel hypothesis, to say the least. Cruel, because some people actually believe that plan would work. Our economy is growing at less than 2%. It is unrealistic in the extreme to think that tax cuts could make any difference that would significantly change the debt equation. However, the Republican tax cut would further polarize wealth. There, we have a reliable track record.
The Democratic view takes the position that we need to tax all those making over 250K per year more, by altering the tax codes. This would reap big revenue for the treasury and soon we would see the red ink gradually sinking. A deceptive viewpoint ! Deceptive, because in order to make the numbers work we would have to import millions of millionaires and a few thousand billionaires. In these hard times I don’t know where we can find that many rich people.
Very early this morning I checked the news and saw a piece that said; ” IMF says China will overtake America as the number one economic power in 2016.”
I know there is much evidence for IMF’s forecast. I went to a large chain store last night and found almost all light bulbs were made in China. Some time ago it was reported that over 80% of all that Wal-mart sells is imported products. This trend has been steady, with little interference from Congress. When Wall Street was telling Congress the virtues of globalization, the pliant Congress had listening ears.
Economic well-being is a symptom and usually a latent symptom of the broad cultural condition of a nation. Although, some economic vitality can be present, even in an otherwise decaying culture. Consider present-day Europe ! It is the same with America. The stock market is rising today.
America’s cultural decline portended the economic result that the IMF sees today. The cultural decline goes back a while. There are many, many factors, not the least of which is the decadence of affluence. Sometimes, it defies statistics and maybe even observation. When our record divorce rate started rising we knew that it would soon show up in health costs, other entitlements, and last in the general economy.
It seems, that faith goes early in the decline of nations. Then, comes the social ills such as broken families, discipline, education decline, crime etc. and finally economic hardship. The churches lack power in our society, and common respect is diminishing too. In fact, many churches are unlike the secular world by about any measurement you want to use. I know our figures are better than much of the world in church attendance. Certainly, better than Europe, where faith receded more than a generation ago. But, those facts are deceiving. The church had more power in America when attendance was 20% of the population in the 18th and 19th centuries than it does today with an excess of 50%. Most of the 20% adherents were sincere; maybe that’s the difference.
When things get stretched economically, the politicians attend to the symptoms. They mess with the currency and the tax code or some other palpable tinkering. Anything, but the more basic problem and sooner or later you have major dysfunctions. Like Now !
The political establishment got the best of the Tea Party in the budget negotiations. They blinked and blinked, and then voted for the deal. They blinked on Planned Parenthood funding. Why not pull funding from Planned Parenthood ? It is primarily an abortion mill. Why the exemption ? Why should values not be a part of budget negotiations ? The second blink was the agreement by many of the Tea Party and Republicans to pass a bill without significant budget cuts. Just another public relations stunt.
Now, Wall Street, along with the political establishment, which is heavily made up of Wall Streeters, are keeping the phones buzzing to raise the debt ceiling and to raise it to the tune of 2 trillion. Also, to raise it soon, before the mid-May projected time it must be raised. The Tea Party and Republicans are listening to the dire outcome of our currency, world economy, and payment defaults if we don’t raise the debt ceiling. Think the Tea Party and Republicans are getting scared ? Probably !
Standard and Poors are a little late coming on board in political realities. On board, that is, in learning that America is politically dysfunctional. Better late than never they say. The rating agencies were “never” in the times leading up to the 2008 melt down. S & P now says they have no confidence that our national debt will be fixed or improved by this Congress.
Therefore, they issued a “negative” warning that a downgrade was coming: sooner rather than later. In fact, they issued an ultimatum that debt-remedy action must precede the 2012 elections. The downgrade will make borrowing more expensive and treasurys harder to sell. Pimco, already figured that out, and pulled investing in U. S. treasury bonds. Such action will affect other borrowing and Wall Street is getting excited about the prospect of higher borrowing cost. Wall Street likes free money !
Meanwhile, the main objective of the politicians that S & P has lost confidence in, is getting re-elected. The President has already announced and on the campaign trail. The Baker Machine, here in Tennessee have started too. Sen. Corker, up for re-election has television commercials showing up regularly.
But, politics is a rich man’s business; his primary business. And, rich men are nervous.
There is an important truth about our fiscal condition, recognized by insiders, but avoided in public discourse. The fact is; reform of our 20th Century entitlement plans is improbable, even with political will. The reason, of course, the 20Century politicians whose names adorn public buildings and highways, as well as the men with the libraries, promised too much, for too many, and for too long.
We must start over ! This was what Congressman Ryan was suggesting in his budget proposal. Ryan’s proposal needs a lot of revision, but the essence of his plan was a Medicare entitlement capitulation. This does not mean Medicare will go away. It only means it will not work as it was designed.
Conversely, President Obama is living in a dream world ! When you read his counter proposal you get the feeling he don’t want to change nothing; just a little tweak here and there. But, Obama does not have the luxury of time and personal retirement as his 20 Century counterparts. And, the President wants to deal with “adults”. Maturity needs to show up everywhere, especially newly elected congressmen in 2012.
As the two parties confer, consider some of the “off the table” as reported by the Wall Street Journal this morning.
RAISING TAXES : Raising taxes will be essential. You cannot “grow the economy” to deal with the kind of debt we are facing.
LETTING THE BUSH ERA TAX CUTS EXPIRE : The tax cuts should have never been implemented.
ANY KIND OF VOUCHER PROGRAM FOR MEDICARE: There is too much fraud and inequity in fee for service. Surely, Democrats can figure that out.
BLOCK GRANTS FOR MEDICARE: A block grant would reinforce the primary state obligation.
As this great debate progresses, day by day, you will see the same old politicians from both parties with their eye on the next election. Carefully, playing their mind games with the public, which has been so successful for career politicians and so destructive for the rest of us.
Another “compromise” which does not confront the debt realities, will further reinforce the public perception of the incompetence of their government. Yet, it will take a few election cycles to get serious people in office and time is the enemy.
Pride will close the government and maybe it should close. We are living in the age of political entertainment, and political posturing is the equivalent to stand-up comedy. But, politicians do need a forgiving public, and for the past few decades they have found one.
The much-maligned Tea Party, with their fiscal intransigence has received the blame for the impasse. The blame is misplaced. America has more of a political problem than a fiscal problem. If you only have 12% of your budget (non defense discretionary) to adjust you have a political problem. The authors of our safety net lacked foresight. The figures would not hold up. But, the politicians could see no further than the next election. The public, from the mid-sixty’s to the twenty-first century were asleep or drugged in pleasure. So, the people acquiesced to unrealistic and unsustainable legislative generosity which extended beyond the safety net. The public rewarded the popular Congress with near 90% retention rate during much of these fateful years. Now, the politicians most responsible for the fiscal mess are generally dead, but at least well retired. Many are remembered by their names on public buildings all across the country.
What is happening today is symbolic. By mid-week or before the debt-laden federal government will have the lights back on. But, the basic problems have not moved.