At the precipice...

The Debt to GDP is approaching 105% in the United States, up more than 25% in the last 5 years.  Its only a matter of time before our creditors won't lend to us anymore.  For Greece, it was a Debt to GDP of 120%... and even with huge bailouts by the rest of Europe, they had 25% unemployment.  And just who is going to bail us out?  Wouldn't count on Germany for that one... and you weren't holding out hope China would lend us a big hand.

a political take on equality

  I would have at one point been convinced that one of the core separations between Republicans and Democrats is their perception of equality.

  In my view, Republicans seek equality under the law, and there are many examples of this in practice.  A flat tax, often pressed by conservative pundits, treats all citizens equally in terms of responsibility to bear the burden of government programs.  Affirmative action in schools and business are to be shunned, not because Republicans are against racial equality, but because they see that equality expressed in a meritocracy, where employers and schools will want the best students to attend their universities.  They believe social programs like welfare must be shrunk to the minimum safety net, in part because it constructs a false class hierarchy of those who should provide for others, and those who should be provided to, rather than individualism that advocates equal opportunity, and equal consequences.

  It seems to me that Democrats, on the other hand, seek a practical equality in the world.  They see deck is stacked from birth.  Income inequality is the great impediment to practical equality in our country, and social programs that seek to restore a balance in wealth for the poor should be paid for by the excess of the extraordinarily wealthy.  They see affirmative action as necessary because institutional racism prevents practical equality.

  This interpretation of views on equality doesn't quite fit into the context of the current debate over gay marriage.  I wonder what the debate would look like if it did?

Gun Control

Gun control legislation is just on the horizon.  Will any significant change make it through congress?  It is hard to say...  Powerful lobbies like the NRA are throwing their full weight into defeating any new laws that might crop up.  I find myself having mixed feelings about gun legislation.  I have never owned a gun, and probably never will.  Guns are incredibly dangerous, and due diligence should be done to make sure gun owners are sufficiently capable of handling guns responsibly.  We make teens take drivers education classes, and only allow them to drive with an adult supervisor for something like 500 hours.  We make barbers take nearly 2000 hours of classes before they can cut hair.  To get a gun?  As long as you have the money, there is a legal way to get it.  That is a scary prospect.

And yet, I find myself coming back to the arguments against much of the proposed legislation, and find it more compelling.  There is a striking amount of fear mongering and sheer ignorance that goes into pushing these controls.  Many people hear "assault weapon ban", and think they are talking about banning machine guns.  Semi-automatic weapons must be m-16s, not handguns, right?  Wrong.  Automatic weapons are already banned.  Most hand guns are semi automatic.  Deaths are misrepresented as murders, when in fact, most deaths are suicide (another issue that I have mixed feelings on), and many are accidental.  Right now, the FBI has told us 323 people were murdered by rifles in 2011.  Is that really a good enough reason to take away someones rights?  Consider, 34,367 people were killed by cars.  More than 34000 more!    That seems like a much larger safety risk to the public.  More than 728 murdered by "hands and feet".  Does that number keep you up at night?  Probably not.

Then consider the effectiveness of the laws being proposed.  The reality is that handguns are far more dangerous in society.  They are easy to conceal, and account for the majority of gun deaths.  But the legislation seems to be focused on which guns look scariest, not which guns are most responsible for gun violence.  I looked through the restrictions proposed by Senator Feinstein, and just scratch my head at the lack of common sense.  Banning weapons that have a pistol grip, a detachable stock, or a forward grip.  How does that make a weapon more dangerous?  I've seen no quantitative evidence that makes a compelling case for these restrictions.  As far as I can tell, these restrictions produce a set of weapons that looks scary, and could shake the confidence of the voting public.  Nothing more.

 Perhaps the biggest concern I have is that gun rights are enshrined in the very document that protects us from government intrusion into our basic rights.  People often argue that the 2nd Amendment is a relic, meant for times when people needed guns in their daily life just to survive.   But there were other reasons, first most in my opinion, giving the people a means to check tyranny.  I watch power endlessly being channeled into the institution of the presidency, and I think it could only be a matter of time before someone comes along and tries to consolidate it for themselves.  It has happened in democracies like Venezuela with Hugo Chavez, Russia with Vladimir Putin, and once upon a time, democratic elections in Germany elected Adolf Hitler.  I have a hard time looking at the Arab Spring, watching defenseless civilians slaughtered by their own government, and thinking that these people are in a better position to stop tyranny without guns.

Perhaps more importantly, what does it mean if we chip away at our common principals, the lines in the sand we claim the government can't cross.  It is awfully hard to deny that the 2nd Amendment explicitly says the government can't deny the right to bare arms.  If I argue that a fluid constitution should be interpreted through the lens of modern times, what happens when the next guy tries to do the same thing with the 1st Amendment?  To me, its more important that we prevent the erosion of our cherished principals, even if it carries a high price.  We've sent hundreds of thousands of men to fight and die around the world for this reason, always because it means that much to us.  If ever we were to strictly limit weapons, I'd insist it would start with modifying the constitution.

So I circle back to the beginning.  I still truly have mixed feeling about gun control.  But the gimmicks put forward by congress aren't really about making us safer, and come with a high cost to our rights.  I would support an effort to revoke the 2nd Amendment BEFORE passing comprehensive gun control legislation.  I would support a reasoned debate, not based on fear mongering, but on a quantitative analysis of the costs to our freedoms vs the benefits.  I want all gun owners to be responsible and well trained.  This is the kind of action I want to see.  Not the theater we instead get.

finding the deficit hawks

  Its a tricky thing being a deficit hawk... it means being willing to tighten the belt, cut funding to programs that people like, but are unwilling to pay for.  From a thousand feet, most seem to agree that it is important for our nation to live within it's means, but when it gets down to voting for which programs get the ax, it means lost votes and lost elections.  Its hard to lead in that frame of existence.  So I went out today to try and figure who on the right and the left have shown the fortitude to actually put their reputations on the line.

  A list like that is actually surprisingly hard to come by.  Some meaningless interest group lists claiming to represent fiscal responsibility don't take seriously the issue of the federal debt, and instead present a ballot card that reads like a party election mailer.  So I will start by giving credit to the group of elected officials who participated in the Simpson Bowles commission.

  Two names poke out at me... Paul Ryan, who's Vice Presidential candidacy was characterized by his willingness to stand behind a plan (however unpopular) that addresses the long term fiscal responsibility, represents many of the qualities I look for in a deficit hawk.  On the left, I'd point out a candidate who's district is just a few miles down the road from me, Xavier Becerra.  While I don't know much about his positions, I do know he served both on the Simpson Bowles commission and the Super Committee that sought middle ground solutions in a bipartisan manor.

  Since I think creating a single list of candidates would be hard to remove party biases from, I'd instead to prefer to keep a separate ranking of republicans and democrats for their relative merits.  My intention is to eventually have a list of candidates I can best justify supporting, and a list of candidates who should be challenged either in a primary or a general direction.

  Holding our leaders accountable for their lack of leadership on the federal debt is the only way we will ever get meaningful reform.

real spending on the rise

Over the past four years, real spending by the government (after inflation) has increased by $822.90 per household, according to this report.  That is a 7% increase in the size of government, excluding population growth and inflation.  The government would have to cut $362,069,530,000 from the budget just to reach the spending levels of the Bush administration.  That is 362 billion, borrowed from your pockets, not the pockets of the rich.  The sequester cuts that congress is raising a big stink about add up to 1.1 trillion over the next ten years.  So even after those cuts, the size of government has grown.


Do you feel the benefit of that 822 dollars you gave the government has made a positive impact in your life?


How about the $31,024.03 total the government spent on your family's behalf last year?  Are you getting your bang for your buck?

How about the $52,841.19 you still owe?  That is the share that each member of your family will have to pay back.

At the very least, shouldn't we be cutting the tremendous waste in the federal government, something almost all Americans can agree on?  If we aren't ready to stop the deficit train barreling towards the real fiscal cliff of default, maybe we can convince our politicians to slow it down.

I would pledge a dollar in new revenue for every dollar cut BELOW the real spending level in 2008.  I think its time to get serious about this fiscal crisis.

review of the debt and the debt talks two years ago

This is a repost of an old blog of mine, examining the structure of the deficit in 2011...

I'd like to add my take on the national debt and the current debt crisis, firstly because it is the most important political issue to me (and has been since I was a teenager), and secondly because I think there is a lot more focus on the fluff of the debate than the substance.  I've tagged each section separately, if you want to just browse the areas that interest you the most.  Hopefully this can help be a cheat sheet on the debt, so you can express your opinions with some knowledge on the issue.

National Debt:  The national debt currently sits near 14.2 trillion dollars.  That is 14200000000000 dollars, or roughly 40000 dollars for each man, woman, and child in the country.  This number has doubled in the past decade, and ignores future unfunded liabilities that could eventually reach as high as 70 trillion, roughly 5 times current gdp.  This graph shows the debt in two terms: raw debt, and debt as a percentage of GDP.  Note the current public debt is around 70% of GDP, which is the highest its been since we were paying down our debt on WWII.  The difference between the two debts is one was due to temporary spending to fund the war effort, and one is driven largely by long term liabilities, and will not be going down any time soon.  Public debt is held by a number of institutions, including the federal reserve, foreign nations, and 

National Deficit:  This is the amount of money we spend each year beyond the revenue which we take in.  The current federal deficit is roughly 1.2 trillion dollars every year, according to the CBO.  That means about 40 cents of every dollar the government spends is not backed by revenue coming in.  The last time we were deficit neutral was the beginning of the Bush administration, which was a result of bipartisan management of the budget during the end of the Clinton administration (cutting spending on military and welfare), as well as the economic expansion due to the internet in the late 90's.  In my view, unfunded spending amounts to a type of hidden tax, where we get less value out of the dollar we spend due to the future interest we have to pay on it.

To be fair in assessing the long term damage, we need to know where all this new debt has been coming from over the last decade, and moving forward.  There isn't one source of the problem.  We want to figure out where that 7 trillion dollars have gone, as well as where the future problems lie.

Wars in Iraq and Afghanistan:

Since 2001, the total expenditures for these wars has totaled about 1.2 trillion dollars, around 17% of the debt problem over the last decade.  Moving forward, it is expected these wars will contribute less and less to the debt as the wars wind down and troops are brought home.

Bush Tax Cuts:

With projections of as much as a 5 trillion dollar surplus at the start of the 2000's, Bush pressed tax cuts through congress, and again following the 9/11 attacks to stimulate the economy during the dot com recession.  The total cost of those cuts over that decade were about 1.6 trillion dollars, and may expand to 2.8 trillion over the next decade due to the Obama expansion of the cuts.  People paint these tax cuts as targeting the rich, but keep in mind 2/3 of these cuts went to people making less than 200k per year, or families less than 250k per year.  Obama's plan to extend these cuts for the middle class would increase the debt by 2.2 trillion dollars over the next decade.

New Entitlements (Prescription Drugs):

President Bush pressed a prescription drug plan through congress in 2006, without increasing taxes to pay for the new entitlement.  This adds approximately 550 billion dollars to the debt between 2006 and 2015, or about 400 billion to the current debt total.  This will add approximately 70 billion dollars per year to future deficits.

Tarp (Bailout of Financial Institutions):

The Fed, the Bush administration, and later the Obama administration, spent nearly 1.5 trillion dollars to buy failing mortgage backed securities, bail out financial institutions, and prop up auto makers.  It remains to be seen how much of this money comes back in the form of repaid loans and stock gains in government owned corporations. 

The Internet Bubble, 9/11 attacks, and The Great Recession:

Its much harder to gauge the impact of loss in revenue as a result of the recessions over the past decade.  This graph shows the direct revenue of the government over time. We can clearly see that revenue declined significantly during periods of recession. Government spending is pretty steadily increasing, not matching losses in revenue when GDP shrinks.

Economic Stimulus Plans (Bush and Obama's attempts to dull the hit on the economy):

The Bush administration pushed through 120 billion in tax cuts in the early days of the great recession.  The Obama administration passed approximately 750 billion through the Economic Recovery Act.  Neither was particularly effective, and combined added nearly a trillion dollars to the debt.

Medicare/Medicaid:

Like Europe, America is approaching a period where a greater percentage of the population reaches retirement age.  In combination with the raising standards of health care (at a higher cost), the percentage of GDP spent on healthcare will rise from 4% in 2007 to 18% by 2080.  This represents a major problem moving forward, where the big problems with the federal debt remain ahead of us.

Social Security:

Social security currently runs at a surplus, but represents a major part of future unfunded liabilities.  In around a decade, social security will start paying out more than it brings in.  Social security basically works by having current young working people pay for the elderly people's retirement, while young people in the future will pay for ours.  The combination of the shift of demographics to an older population (meaning less young people per retired individual), and the increasing life expectancy (meaning the longer amount of time young people must pay for the elderly) make this a huge source of future problems.  Additionally, the "savings" that social security has accumulated have been "loaned" back to the federal government, meaning there will be an immediate impact on federal deficit spending as soon as yearly liabilities exceed expenditures.

Debt Ceiling:

There are a couple of points of interest regarding the debt ceiling.  First, this is a hard cap on borrowing, beyond which the treasury is not allowed to issue new securities.  We are at a point where we need to borrow more money to pay interest on previously borrowed money.  If we don't pay the interest on these bonds, then investors will no longer lend us money going forward at our current interest rate, and borrowing becomes much more expensive.

One might ask what is the point of the debt ceiling if congress rubber stamps increases?  I believe that it was intended as a lever to force the government to address debt problems on a regular basis.  Election cycles make representatives focus only on near term issues, and long term problems (like the federal debt, global warming, and so on) are unable to be properly addressed.  I think the house is actually using the debt ceiling as it was intended to force the government to address the deficit problems.

One thing you will hear in the debate is the time frame we want to push the debt increases out.. Congress historically has extended the debt ceiling about once a year.  Keep that in mind when considering the different plans.

The Proposed Plans:  All plans are an attempt to reduce the amount of new debt added 10 years from now, so any numbers you hear are amortized over a decade.  Some projections say that the debt will increase by about 15 trillion dollars over the next decade.  We will use that as a baseline to evaluate the deals proposed.

The Simpson Bowles Plan:

President Obama created a bipartisan commission to provide long term solutions to budget problems.  This commission came up with comprehensive reforms to address social security, health care, and tax reforms that would result in the long term solvency of the federal government.  I would have personally strongly supported this plan, but the results were ignored by the president, and nothing came of it.  Perhaps it will be a basis of a bill following the next election cycle.

The Grand Bargin:

When it became clear that the house of representatives wouldn't raise the debt ceiling unless it was combined with some attempt to address spending problems, there was a bipartisan effort to decrease the debt by 4.5 trillion over the next decade, thus limiting debt increase to a new cap of approximately 22 trillion.  House republicans are insisting on a dollar for dollar exchange of debt ceiling increases for spending cuts over the next decade.  The bill would have included 3.5 trillion dollars in spending cuts, along with 850 billion dollars in tax increases.  The tax hikes would have come right away, while the cuts would have come towards the end of the decade (with only a few billion dollars actually cut in the first few years).  I think talks broke down when republicans became concerned that paper cuts wouldn't materialize in future classes of congress (who would be asked to make those cuts), and democrats insisted on increasing tax increases to 1.2 trillion dollars.

The Reid and Boehmer plans:

Both the Reid and Boehmer plan are based on two principle demands of the house republicans.  First, a dollar for dollar increase of the debt ceiling, and second no new taxes.  The Reid plan actually calls for deeper cuts than the Boehmer plan, the reason behind that being allowing the next debt fight to happen after the next election cycle.  There is one major problem with the Reid plan, in that about a trillion in "cuts" are from ending the wars in Iraq and Afghanistan, which many argue are savings that would be occurring anyways.  If those cuts were ignored, you'd basically have the original Boehmer plan, which were the collection of cuts broadly agreed to in the grand bargin.  The senate was planning on rejecting this plan anyways, so republicans tacked on a "balanced budget amendment" to the constitution, something broadly supported among conservatives.  So the current squabbling over the proposals centers around one core issue... the democrats don't want to face debt reduction again in an election cycle, because it is a losing issue for them, while republicans want to use this political pressure to extract deep cuts in spending.  I think if democrats offered the Reid plan with real cuts instead of bogus war cuts, you'd probably find a compromise acceptable to both sides.

I.O.U.S.A.

  I think this is a film everyone should take the time to see.  It captures the seriousness of our country's financial woes in a way that can shake you awake.  The full version is available on netflix streaming, but if you want a condensed version, it is available here on youtube.  GO SEE THIS FILM.