Third Party & Independents Archives

National Debt: The All Important Vote

Let’s begin with a background number not often discussed, the total American debt is now 37 trillion dollars. That is the sum total of business, personal, trade, and national government debts. 24 of the 37 trillion dollar debt have accrued since 1990. This number is growing at a phenomenal rate. The total labor force is 147.9 million (Bureau of Labor Statistics). That 37 trillion dollar total American debt equals $250,169.00 give or take a few dollars, for every working man and woman in this country. In other words this is a quarter million dollar debt for each and every working man and woman and spiraling. On November 2, voters can elect to do something about a large portion of this debt.

The national federal debt is over 7 trillion, 328 billion dollars. That is equal to $99,716.41 per breadwinner(s) in a family of four; almost $100,000. of taxes owed. And the national debt is expected to rise to over 10 trillion in less than 5 to 7 years from now. Our federal government deficit this year is projected to be between 400 and 500 billion dollars. That means the amount of revenue reduced by the tax cuts and the amount of spending by Congress will result in our government spending over 400 billion dollars more than it is taking in.

And the interest is also climbing despite lower interest rates. Although debt soared to a new record high of $7 trillion and interest on that debt fell the last 2 years (due to historically low interest rates, effectively siphoning-off senior citizen interest earnings on their savings) - - total interest increased from $214 billion per year in 1988 to $318 billion in 2003 - a 50% increase. That is $2150.00 of taxes added to our debt for each and every working man and woman in America. And that $2150 new tax burden per working person bought not a single dollar's worth of education, health care, military weaponry, or intelligence service. It will be paid to investors in America, Japan, China, and Saudi Arabia as interest earned in return for their loaning us the money. That is if America can make good on paying its debt.

Clearly, the incumbent President and Congress are not feeling pressure from the voters on this issue. If they were, they would not be increasing these fantastic, almost surreal, numbers through the roof. There is no more important issue facing Americans. Not even terrorism. Should two or three more terrorist attacks succeed in the U.S., they would not spell the end of our way of life. They may spell the loss of life for 100's or thousands or even 10's of thousands of Americans, but they will not end America, its strength, its resolve, or its future. This kind of spiraling indebtedness can do all of that.

Just as a person who extends their debt beyond their ability to borrow anymore, beyond their ability to pay it back, beyond their ability to even maintain the interest on their debt should hard times fall upon them, our nation faces very similar consequences. Many argue this debt is sustainable by a growing economy and its promise of increasing tax revenues. But, what if the economy falters? We have seen world wide recessions in our own life times, the last one in just this decade, due to market and geo-political events beyond our control and some within our control. And in 5 to 7 years when our national debt is 10 trillion dollars, and interest rates are much higher than today increasing the interest on our debt load, and our trade deficits are eating into our job markets even further, and another recession hits causing investors to pull back into cash and gold and become wary of U.S. treasuries and bonds, we could easily find a recession turning toward depression.

A majority of us today do not remember the depression of the 1930's. But, those who do, would almost without exception, caution us not to ever allow such a circumstance to reoccur. The reason is that deep recessions and depressions destroy families, psychological health, and more importantly, it destroys hope for millions and millions in our society. The solution, the ton of prevention it is going to take to get the U.S. debt situation to turn around, is not going to be painless. Just this week, the Congressional Budget Office issued a study's results on which the Associated Press reports:

The tax rate declined across all income levels - but more so in the top brackets, the report said.

People in the top 20 percent of incomes, averaging $182,700 a year, saw their share of federal taxes decline from 65.3 percent of total payments in 2001 to 63.5 percent this year, according to the study by congressional budget analysts.
In contrast, middle-class taxpayers - with incomes ranging from $51,500 to $75,600 - bear a greater tax burden. Those making an average of $75,600 had the biggest jump in their share of taxes, from 18.5 percent of all payments in 2001 to 19.5 percent this year.


The burden of buying down this debt will have to fall upon all Americans. And it is up to the American voters to force politicians to deal with this American debt burden by tapping all available resources, including those of the rich in this country. But, unless voters take a hard anti-incumbent stand in November, only platitudes will be thrown at the debt. Unless voters take an anti-incumbent stand at the polls, politicians will continue to assure us that cutting the deficit is a solution. It is not a solution. Cutting the deficit does not reduce the debt, but, simply adds to it by a lesser amount.

The only way to stop the growing debt is to end deficits. To reduce spending equal to tax revenues or raise revenues equal to our spending, are the only ways the debt's growth can be halted. But halting debt growth does not deal with the debt, only the deficit. To reduce the debt, we must take in more revenues than we spend in a given fiscal year.

Now do voters really want to see the middle class squeezed while the wealthy see their tax burden reduced? Raising middle class taxes while allowing rising interest rates, food prices, oil prices, and government spending on homeland defense, foreign wars, and the military (all being planned for today) while watching social security, Medicare, and education funding wither, is a recipe for social disaster in the not too distant future. The American voter is not required to have the answers to solve our debt crisis. They are only required to hold their representatives responsible for the rising debt.

As long as our debt continues to rise, most American voters should, in their own self interest, vote against their incumbent representative, whether it is the President, or the county tax assessor. The only voter who would benefit from escalating debt, is the one who plans on dying in the next few years. There is little doubt that if two election cycles pass with fewer incumbents being reelected, the newly elected officials would get the hint, and begin taking actions that reduce the debt.

It is not up to the politicians. It is up to the voters. And voting for their incumbents is a vote for increasing the debt that could well end our quality of life as we have known it. Politicians don't have the political will to take measures that will lose them votes. Cutting the debt will lose them votes. Voters must convince them that not cutting the debt will lose them even more votes. It is not up to the politicians. It is up to the voters. Cast your vote - cast your fate, and the fate of generations of our children to come.

Posted by David R. Remer at August 15, 2004 04:24 AM
Comments
Comment #21717

The only way to cut the deficit is to spend less.

Posted by: Eric Simonson at August 15, 2004 04:27 AM
Comment #21718

That is your opinion, Eric, and I appreciate your providing it. But, you seem only to want to address cutting the deficit. Does that mean you don’t see a need to end the deficits? And in turn, does that mean you think we should keep the 10 trillion dollar debt at the end of this decade intact?

If not, then cutting spending AND increasing taxes are the only way to address the debt.

What specific spending would you cut, Eric, toward reducing the deficit? I don’t think 450 Billion dollars can be found in waste and inefficiency, do you?

Besides, we have been going after waste, fraud, and abuse for 40 years, and look at where it has got us. So, I would appreciate something more specific in the way of spending cuts.

Posted by: David R. Remer at August 15, 2004 05:10 AM
Comment #21731

The Bush Administration doesn’t care about reducing the debt at all, and they never will. As Bush himself said, when asked about how he’d be judged on the Iraq war, “Who knows? We’ll all be dead.” The Administration is simply being reckless with regards to the economy, adopting politically popular plans with no eye to fiscal responsibility whatsoever. None.

Fiscal conservatives are flabbergasted by Bush’s policies. I hope they see the truth and switch allegances before its too late, but I’m not holding my breath.

The Grover Norquists of the world, however, have a more foresight than Bush’s team. They, in fact, have a long term vision; their policies are less reckless but more evil. They are thinking that Bush is, in fact, doing the right thing: pointing our country straight towards a fiscal crisis of monumental proportions. And the solution to this crisis, they hope and pray, will be to totally dismantle the federal government. This is the endgame of the “starve the beast” strategy, and it is apocalyptically insane.

-Cf

Posted by: Christopher Fahey at August 15, 2004 12:16 PM
Comment #21733
The only way to cut the deficit is to spend less.

Technically, that’s not true Eric, but it’s a good start. Why don’t you email your president and your representatives in Congress and tell them that. Maybe they forgot.

David, here’s Kerry’s plan. It cuts the deficit in half within four years while still paying for health care and education. I’d prefer that he shoot for actually balancing the budget, but it’s obvious that Bush and the Republicans in Congress aren’t serious about it at all.

At least Kerry has Clinton’s shadow hanging over him - his fiscal policy will constantly be compared with Clinton’s. Hopefully that (and a few emails from me) will give him a kick in the pants if he starts slacking off. :)

BTW, Here’s an article by some conservative economist talking about the debt. He advocates ignoring it or defaulting. His argument is, debt doesn’t matter because our lenders can’t repossess Illinois.

Posted by: American Pundit at August 15, 2004 12:37 PM
Comment #21734

hey AP and the rest of the dems. lets make a deal- if Kerry wins the election in november and the republicans propose another balanced budget ammendment (for whatever reason), will you guys support it this time? Please?! I know david said that he has changed his mind on the balanced budget ammendment, maybe the last 4 years have convinced the Dems about what we fiscal conservatives were saying in the 1990s?

As for Kerry- i have absolutely no reason to believe that he will cut enough spending to make any serious dent in the deficit, let alone the debt (campaign literature not withstanding). As a result, we fiscal conservatives are stuck without a horse in this race. (Thats why we need some viable third parties!!)

Posted by: Misha Tseytlin at August 15, 2004 12:45 PM
Comment #21741

McCain’s economic team director has looked at Kerry’s spending plans and concluded that the numbers don’t add up.

Kerry is proposing something like 1.7 to 2.5 trillion dollars more spending over the next ten years. Without corresponding spending cuts. How is he going to cut the deficit?

Every constituency group he speaks to is promised some kind of ‘free’ stuff. The government is going to gaurantee Health Care for all, College Education for all, etc etc etc. Does any of this add up for you?

Even with that generous accounting, the Kerry spending promises add up to an extraordinary amount of money. Our best estimate is that Kerry’s proposals will add up to between $2 trillion and $2.1 trillion over the next ten years. Since the revenue from his tax proposals relative to the current baseline is actually negative, this implies that the Kerry proposal would increase the deficit by perhaps as much as $2.5 trillion over the next ten years.

On August 3, 2004, the Kerry campaign responded to criticisms such as this with a revised budget plan. The main difference between the first and second plans is that the campaign now claims to be able to save about $300 billion from eliminating corporate welfare. Even if we include this rather implausible savings in our estimate, the net increase in the deficit associated with Kerry’s proposals is on the order of $2.2 trillion.

What would he spend the money on? According to our analysis, roughly half of this additional spending is attributable to Senator Kerry’s health care proposals that would add more than $900 billion in federal outlays. Education expenditure accounts for nearly one quarter of Kerry’s new spending, with almost $500 billion added over ten years. A $400 billion expansion of military personnel and benefits for veterans comprises most of the remainder of Kerry’s spending plans, with the balance distributed among numerous social programs and increases in international aid.

While making all of these promises, Kerry and his surrogates repeatedly have made the claim that they will restore fiscal discipline if elected. They have also promised to adopt a “pay as you go” rule that will guarantee deficit reductions. But they do this at the same time that they promise voters the moon and the stars. It is time for them to state exactly which of Senator Kerry’s promises are no longer valid, or stop all of the warm and fuzzy embraces of deficit reduction. They cannot have it both ways. Our just-released paper has highly specific scores for each of his proposals. Perhaps the Kerry team can tell us which ones are incorrect. techcentralstation

I’m all for reducing the deficit and the debt, but Kerry is not going to be able to do it with these kind of spending priorities.


David,

What specific spending would you cut, Eric, toward reducing the deficit? I don’t think 450 Billion dollars can be found in waste and inefficiency, do you?

We could cut 450 billion dollars from the budget tommorrow. Do you really think that federal spending is so tight that there is no waste and fraud and unnecessary spending? I don’t know why we need a Department of Education which doesn’t teach a single child to the tune of $60 million a year. All we’d need to do is go through the list of the Federal Budget. You are correct in that Republicans have failed to live up to their promises in this area. But Democrats want to spend more not less. Most of the resistance for such cuts comes from Democrats and you know this.

You’re honorable Senator Byrd has led the pack of pork for his state. Perhaps he should take one for the team? Here’s a partial list of Byrd’s fine additions to the deficit:

Robert C. Byrd Drive, from Beckley to Sophia (Byrd’s hometown) Robert C. Byrd Health Sciences Center of West Virginia Robert C. Byrd Cancer Research Center Robert C. Byrd Technology Center at Alderson-Broaddus College Robert C. Byrd Hardwood Technologies Center, near Princeton Robert C. Byrd Bridge between Huntington and Chesapeake, Ohio Robert C. Byrd addition to the lodge at Oglebay Park, Wheeling Robert C. Byrd Community Center, Pine Grove Robert C. Byrd Honors Scholarships Robert C. Byrd Expressway, U.S. 52 near Weirton Robert C. Byrd Institute in Charleston Robert C. Byrd Institute for Advanced Flexible Manufacturing Robert C. Byrd Visitor Center at Harpers Ferry National Historic Park Robert C. Byrd Federal Courthouse Robert C. Byrd Academic and Technology Center Robert C. Byrd United Technical Center Robert C. Byrd Federal Building Robert C. Byrd Hilltop Office Complex Robert C. Byrd Library and Robert C. Byrd Learning Resource Center Robert C. Byrd Rural Health Center Robert C. Byrd Clinical Addition to the veteran’s hospital in Huntington Robert C. Byrd Industrial Park, Hardy County Robert C. Byrd Scholastic Recognition Award Robert C. Byrd Community Center in the naval station, Sugar Grove Citizens against government waste

Citizens Against Government Waste has a few suggestions which I would think about seriously:

Prime Cuts features some long-standing proposals, such as terminating the Americorps Program (saving $2.2 billion over five years), reforming milk marketing orders (saving $669 million over five years), and eliminating the Advanced Technology Program (saving $480 million over five years). New recommendations include opening up the Arctic National Wildlife Refuge (ANWR) for drilling, saving $1.5 billion over five years. ANWR is a massive, 19.5 million acre chunk of land, roughly the size of Maine, in a forbidding far corner of Alaska above the Arctic Circle.

Other recommendations include ending the Community Oriented Policing Services (COPS) program (saving $2.5 billion over five years) and reducing drug elimination grants by 25 percent (saving $133 million over five years).
cagw.org

Posted by: Eric Simonson at August 15, 2004 01:22 PM
Comment #21747

Eric, after decades of politicians, including this President and the Congress, campaigning on cutting waste, fraud, and abuse, do you really think 450 Billion in waste, fraud, and abuse can be found? Maybe 50 Billion, or even 75 Billion in a given year, but, 450 Billion? I don’t think so.

I don’t know why we need a Department of Education which doesn’t teach a single child to the tune of $60 million a year.

Except for those funds that go to special education needs, I agree. The cost of special education for the handicapped exceeds the capability of many local school districts. Without federal assistance, the handicapped of modest means parents would receive little formal education. Nazi Germany had an economical answer for such students as these, but, it is hardly one I think we would want to contemplate.

But Democrats want to spend more not less.

That goes without saying. But they weren’t cutting taxes at the same time they were increasing spending like this President and Republican Congress have been doing. Facts are facts my friend, and the lesser of two evils appears to favor the Democrats regarding the deficits. Though I see nothing at all to indicate the Democrats are willing to tackle the debt or even halt deficits. At best their talk is of slowing deficit growth.

9/11 and the war on terror accounts for less than 10 percent of the deficit growth since the year 2000. Bush campaigned on fiscal responsiblity as did Republicans in their party platform. Fool me once, shame on you, fool me twice, shame on me. With regard to the debt and deficits, I have no empirical evidence to warrant believing Bush or Republicans pledges to cut the deficit by half in 4 years.

Most of the resistance for such cuts comes from Democrats and you know this.

I do know the Democrats are holding the line against social program cuts. I also know that the Republicans are holding the line at corporate welfare cuts. Both sides can tout token gestures, but neither is willing to barter cuts. You know as well as I, that as long as the Republicans insist on making tax cuts for the wealthy permanent, Democrats are going to hold the line on social program cuts. Both sides are killing us fiscally.

Senator Byrd has led the pack of pork for his state.You mean like the Alaskan representatives (R)? Yep, I agree. The porkers can be found on both sides of the aisle. Pete Domenici is Byrd’s counterpart on the Republican side.

“Americorps Program (saving $2.2 billion over five years)”

OK, but will increase unemployment rolls.

“reforming milk marketing orders (saving $669 million over five years),”

Go for it, got my vote!

“eliminating the Advanced Technology Program (saving $480 million over five years)”

Got my vote again!

“New recommendations include opening up the Arctic National Wildlife Refuge (ANWR) for drilling, saving $1.5”

I really believe opening ANWR will add to our deficit when all is said and done, with sweetheart deals where the Federal Gov’t picks up the tab for security, roads, inspections, monitoring, etc. But, OK!

“Community Oriented Policing Services (COPS) program (saving $2.5 billion over five years)”

I don’t think we want to reduce community vigilence at this time, do you?

“reducing drug elimination grants by 25 percent (saving $133 million over five years).”

Agreed!

But, you see, Eric, even if all these programs were cut, you are talking about cutting the deficit by only about 7.6 billion over 5 years. That will reduce our deficit by only 1.52 Billion per year. We are at 450 Billion deficit this year alone.

C’mon, guy, if you are not going to raise taxes, you are going to have to do better than this on spending cuts.

Posted by: David R Remer at August 15, 2004 03:27 PM
Comment #21749

Stop worrying about the deficit. It’s just a bogeyman. Take a look at these two columns by Larry Kudlow which explain it far better than I can:

http://www.townhall.com/columnists/larrykudlow/lk20021125.shtml

http://www.townhall.com/columnists/larrykudlow/lk20040715.shtml

For those of you thinking about voting for John Kerry, consider that if his health care proposals (Clinton II?) are enacted, they will cost the government two trillion dollars in ten years (http://www.aei.org/news/newsID.21055,filter.all/news_detail.asp ).

Also, take a look at this article about Kerry resorting to the old Clinton plan - the largest tax increases in US history, despite what he has been saying for the past year: http://www.atr.org/pressreleases/2004/pr-Kerry-8-13-04.htm

Posted by: Troy at August 15, 2004 03:34 PM
Comment #21752

Troy, you are absolutely right. This Republican Congress and President who have surpassed the democrats in their disregard for fiscal responsibility, and the Democrats who won’t even say the words national debt, are both unwilling to do the job that needs to be done. That is why voters need to teach them both a lesson in November.

Kudlow has his head buried deep up some hole in D.C. because the conservative think tanks and economists are now agreeing their is no growing the economy out of this fiscal disaster looming before us. He is talking the good campaign spin talk just like McAuliffe is for the Democrats.

Posted by: David R. Remer at August 15, 2004 03:47 PM
Comment #21762

(sarcasm)
I think that to address the national debt, we should run it up further to subsidize the lifestyle of the lazy. It doesn’t matter how far in debt we are if we have “compassion” for those whose lifestyles contribute to it.
(/sarcasm)

Posted by: Ciggy at August 15, 2004 06:07 PM
Comment #21784

While the debt is extremely troubling, remember it is extremely difficult to do anything economically in Washington. How can you cut a deficit when every fiscal plan is a 10-year plan? That’s why Kerry can say that Bush had bigger budget deficits than predicted (those predictions were made during boom times) and Bush can claim to beat predictions in his next term (predictions made during bust times).

Kerry’s plan of raising taxes on the richest cite figures that would appear over 10 years, numbers that are never going to be true. Bush is the same.

The only way, in my opinion, to have a lower deficit is to reign in the Fed’s issuance policies, lessen spending, and increase revenue ie: taxes on corporations.

And before and Democrat says is: Kerry wouldn’t be closing a loophole on corporations, he would be enacting illegal law to tax profits earned by companies overseas. Why would Ford operate overseas if it couldn’t keep the profits there? Repatriated profits are taxed, profits earned overseas for work overseas are not and should not be taxed.

Posted by: Adam Ilkowitz at August 15, 2004 10:40 PM
Comment #21795

Ciggy, your reference to the wealthy in “subsidize the lifestyle of the lazy” does reflect Republican compassion. They never met a rich donor to their party and campaign who has no need to work, being so wealthy, that they did not have compassion for when it came time for tax cuts. :-)

Posted by: David R. Remer at August 16, 2004 01:41 AM
Comment #21796

Adam said, “The only way, in my opinion, to have a lower deficit is to reign in the Fed’s issuance policies, lessen spending, and increase revenue ie: taxes on corporations.”

Adam commendable. But how do you propose to induce politicians to take these steps. Thus far, they have shown no willingness cut spending or increase revenues. At least the Dem’s would increase revenues somewhat, but to little avail as the new revenue would be countered by new spending.

Anti-incumbent voting is the only means the American people have of motivating politicians to do what is not in their best interest, but ours!

Posted by: David R. Remer at August 16, 2004 01:46 AM
Comment #21811

Haha! David you walked right into that one. When you asked Eric which programs he’d cut, I knew the answer would basically be, “all of them.” :)

I know none of you guys read Kerry’s deficit reduction plan that I linked, so here’s some interesting bits,

  • Collect royalties for mineral rights on Federal lands (saves $1 billion over ten years)
  • Cut electricity used by the Federal government by 20 percent in 10 years (saves $14 billion over ten years)
  • Reduce the number of contractors employed by the Federal government by 100,000 (saves $50 billion over ten years).
  • Constitutional line-item veto power.
  • push for a McCain-Kerry Corporate Welfare Commission to identify unnecessary corporate welfare and force Congress to vote on the list - without amendments - to ensure that special interests cannot protect their own special projects.
  • Budget caps to ensure spending does not exceed inflation. Kerry will propose a budget that funds all of its priorities without growing spending more than inflation. But if Congress cannot agree on savings, John Kerry will be willing to sacrifice some of his own priorities if necessary to keep spending under control.

I think that last part is the most telling of Kerry’s focus on reducing the deficit. If you’re just going to argue that Kerry is a liar and will never cut programs, then there’s no reason to talk about it. But if Kerry implements any of those cuts, he’ll have done more than Bush.

We could cut 450 billion dollars from the budget tommorrow. Do you really think that federal spending is so tight that there is no waste and fraud and unnecessary spending?

Eric, that’s what Schwarzenegger said about California’s budget. He still ended up implementing Davis’ plan to borrow the money.

Stop worrying about the deficit. It’s just a bogeyman.

Thanks Troy for so succinctly stating the current GOP leadership’s position on their “borrow and spend” economic policy. Here’s how that plays out,

“First of all, the warning about growing U.S. financial obligations to the rest of the world is essentially meaningless in terms of the hypothetical ability to repay. All U.S. debt is denominated in dollars. The federal government is the sole manufacturer of federal government securities. All foreigners can hope to do with their accumulation of U.S. debt is redeem it for dollars. And it’s very unlikely that they will try to take the state of Illinois in payment. They can only take goods and services.”

Do nothing - default - screw ‘em. Problem solved. When China comes looking to repossess Illinois, let’s give them a Republican state (Texas?), instead.

Posted by: American Pundit at August 16, 2004 08:50 AM
Comment #21818

Sorry, A. Pundit, your numbers don’t add up toward halting the debt growth or addressing the debt anymore than Eric’s do. Total cuts you propose 2 billion per year. In the first year the numbers you provide only equal 2 Billion dollars. With a deficit in the range of 400 to 500 billion, it doesn’t even make a dent. Inflation and increased interest alone due to rising interest rates would cancle that 2 Billion savings per year.

What is left? Kerry’s word that he will do it. Bush said he would do it too! But, provided no hard numbers. All I see is “new boss, same as old boss” when it comes to deficits, debt and debt interest. If Kerry wants credibility he is going to have to come up with numbers that not only demonstrate a substantial reduction in the deficit, but, cancel out the increased costs of his proposals for increased program spending.

Am I the only one around here with a calculator? Add up your numbers folks, and see if they support your statements. If you don’t, I will.

Posted by: David R. Remer at August 16, 2004 09:26 AM
Comment #21820

The unspoken truth, David, is that the majority of the budget is undebateable. I would guess, and probably be wrong but not by much, that the defecit is made up entirely of discretionary spending (the amount, not the specific dollars that are in deficit). Most social programs are pre-programmed and not up for date year after year. Individual programs are not the issue, its the way government revenue is calculated in 10-year impossible-to-realize blocks.

Even A Pundits figures are in 10 years spurts. Kerry, if elected the next two times, will be in for 8 years, why predict 10? There is no way any of those guesses will be right 3 years from now, let alone 10.

Posted by: Adam Ilkowitz at August 16, 2004 09:43 AM
Comment #21829

Have read your discusion on the debt of our country, I do have an idea on how to raise the money to pay off the debt. Now, I know everyone hates paying taxes, so I won’t even go there but to say we need to reform the payroll tax laws to lessen the burden of putting a person to work.

In the constitution, our government has the authority to issue notes of debt; therefore, why can’t we as American Citizens work together to purchase back our debt in the form of Special US Treasury Notes. By doing this, every legal citizen in America could say that they really do owm a piece of America. By creating a workable bond buying system that would allow every worker to purchase $70,000.00 face value over the next ten years and restructuring our way of thinking on social and business programs. Than America can once again rise above the crowd as we are forced to deal with cutting the world wide value of the dollar by 40% over the next serveral years. I just hope this time we are wise enough to close the gap between the wages of common workers who operate our society and the management that keeps score.

Posted by: Henry Schlatman at August 16, 2004 10:47 AM
Comment #21831

Adam said, “Kerry, if elected the next two times, will be in for 8 years, why predict 10? There is no way any of those guesses will be right 3 years from now, let alone 10.”

Quite right, Adam. That is not to say that we should not do long term budget planning, but, what we don’t do is long term contingency planning with the long term budget. We assume things will change and therefore don’t take those long term projections seriously. However, if Congress and the Whitehouse built long term budget priorities and factored in a few contingencies to the down side and adjusted accordingly, not only would long term budgeting and planning gain a huge boost in credibility, but, we could also find ourselves delightfully surprised by unanticipated surpluses from time to time.

But, who in Washington has that kind of common sense? Or enough bi-partisan spirit to allow such practices to take place at the hands of the opposing party? It is indeed up to the voters. Perhaps in November, perhaps in 4 more years, 8 or 12, the voters will wake up to the reality that their destiny really is in their hands, not in the hands of the politicians, and they will take back the control they gave up with “representative government” which has come to mean, we pay the taxes, you decide how to spend them.

One day the people may decide to tell the government how to spend the money or insure the death of their political career if they don’t honor the people’s wishes.

This is not unique, Adam. Ancient Greece experienced the same sort of transformation, from a generalized agricultural economy and tribal governance to specialized economy and democratic representative government. What happened is that over the course of 5 hundred years, the evolved from thinking and doing for themselves, to hiring others to do and think for them. They became so interdependent upon other members of their society for all sorts of things like plumbing, shoe making, herding, food growing, shipping etc. that they lost confidence in their ability to do those things for themselves. In exactly the same fashion, the went from tribal self governance which they had confidence in to representative government which they first grew confident in and then grew dependent upon.

Hence when Greece was invaded, they had been so indoctrinated into the notion of the Spartans being the specialists in homeland defense, and government in making societal decisions, that when the call went out for all Greeks to arm and defend their homeland, they essentially said, No, I have a business meeting today, I pay taxes, let the Spartans do the job they were hired to do, and I will conduct the business I get paid to do. Needless to say, with the Spartans outnumbered something like a hundred to one, Greece fell before anyone knew what hit them.

Americans have reached that same plateau of civilization where we pay others to do our governmental thinking for us, and depend upon millions of others to support our livelihoods from bankers, ISP’s, communications companies, and medical facilities. If government makes the wrong decision, we are so detached from that area of expertise, we are as a nation, barely aware that our safety and security have been compromised, let alone motivated and confident in our ability to do anything about it. And when the need arises for Americans to stand up and tell the government it has failed them, and to take control of the politicians instead of the other way around, they will fail to even recognize the need arose and passed them by.

Every advanced civilization that reached that level of specialization and division of labor, and rule by a minority, faced similar circumstances and failed to meet the challenge before them. The Roman Empire, Babylonia, Mesopotamia, Confucian China, the Egyptians, Japan prior to WWII, the USSR, the Aztecs, etc. And now it is our turn. Globalization demands that Americans think for themselves and take control of their politicians instead of being controlled by them at the polls. Will we meet the challenge in time? Perhaps. We have two things no other civilization had in facing this challenge, unfettered freedom of speech and communications technology enabling all of us to dialogue with each other. These two differences may make the difference, or not. Only time will tell.

Posted by: David R. Remer at August 16, 2004 10:59 AM
Comment #21832

Henry, that is one of the most astute commentaries I have read at WatchBlog. That is the kind of innovative and creative thinking that is needed among the people. It specifically addresses a lot of what I discussed with Adam in my previous comment. Good show! It is a concept I will not forget, and will explore and promulgate myself in future writings. Thank you very much for joining in.

Posted by: David R. Remer at August 16, 2004 11:05 AM
Comment #21836

David—

Outstanding article as usual. The national debt for most people is an abstract concept; it does not directly touch their daily lives, therefore it quickly falls of the radar screen. The numbers are unfathomable for most; what does 7 trillion dollars look like? That certain does not diminish the importance or the impact of the debt, just helps explain why there is not an outcry from the electorate about it. Shame on us, because it is our children that will have to shoulder this growing burden the Republicans are building up by far too much deficit spending; funny how government seems to grow under every Republican Administration.

Posted by: V. Edward Martin at August 16, 2004 11:25 AM
Comment #21837

D.R. is dead right to hammer away at this issue. It is one of many issues apon which Bush is incoherent and wreckless. The problem is linked to permanent losses in manufacturing. We need stuff to sell. NAFTA & globalization are a bust for working class Americans but CEO’s continue to rake it in. Bush and his lambrain economic team have never addressed manufacturing losses or the deficit. Kudlow is an apologist for these clowns. But Paul Craig Roberts speaks the truth.

The Commerce Department reported Friday that the trade deficit surged to a $55.82 billion in June, a sharp 19.1 percent increase from a May imbalance of $46.88 billion.
The price moderation last month did not extend to energy, which shot up by 2.3 percent in July, the largest gain since a 4.7 percent rise in January.
The deficit with China jumped to $14.2 billion, the highest in history, while the deficit with Japan rose to $6.27 billion and the deficit with European countries using the euro currency rose to $7.85 billion. The deficit with Canada rose to $6.63 billion and the trade gap with Mexico widened to $4.9 billion.
Bush is still pretending that we turned the corner. He is clueless and we cannot afford to have this idiot ruining the country.


Posted by: bayviking at August 16, 2004 11:34 AM
Comment #21840

David
Thanks for the compliment. It just seems to me that the only people being heard nationaly is the ones who want to complain about the issues. I would like to hear from others on how we the people of America can work out our differences on the issues and get on building the future that are forefathers promised us. It may be hard for some people to believe, but the world is about to change forever here in a few years. The question should be “Do we want to change the world for the good of mankind or release the Dogs of War on the land once again?

Posted by: Henry Schlatman at August 16, 2004 12:29 PM
Comment #21854

David - It’s always good to hear debate on the subject as a former finance major. The problem is a transformational movement in the budgetary process. Planning for 10 years is theoretically fine for long term planning, but why not limit it at 5 years? Also, why are only 10 year numbers quoted? For no reason other than to inflate political claims (save $840 Billion in taxes instead of $84 Billion / year in the face of a $450 Billion deficit). Another politicized process, in my opinion.

Henry - I don’t understand what your proposal is doing. Much of America’s “DEBT” is held by its own citizens and corporations. What you describe is simply Treasury securities as they are issued currently. If I buy $10,000 in notes from the Treasury, I create a $10,000 debt for the US Government. What you describe does the same, unless you are talking about donating money to the government. The government and its citizens are separate entities whose wealth does not intermingle.

Posted by: Adam Ilkowitz at August 16, 2004 02:55 PM
Comment #21855

Adam and Henry, the following information may be helpful from MWHodges:

The left chart shows foreign parties control 42% ($1.73 trillion) of $4.15 trillion in Treasury bonds and t-bills.

This means each man, woman and child owes $5,931 in federal debt to foreign interests.

A family of 4 owes $23,724 in this regard - - 37% of the total is owed to Japanese.

Note the rapidly rising trend since 1992, as the share of foreign holdings more than doubled.

Posted by: David R. Remer at August 16, 2004 03:14 PM
Comment #21864

David, my sarcasm was meant to cut both ways, and you only felt one way of it.

Yet you think you aren’t a “partisan”. *smirk*

Posted by: Ciggy at August 16, 2004 05:19 PM
Comment #21885

Adam,
Your right, I would much rather see our government debt held only by Americans instead of forgien nations that might or might not have our best interests at heart. That being said, I would like to remind you that our WWII war bonds kept America strong during some rough times. For that matter, wasn’t it the Reagan administration that got Americans to buy American? We are faced with the rock and the hard spot. If on one hand Americans do not help purchase these bonds or notes, than our government is left with the only other option to raise taxes. Therefore, as citizens do you want to pay more taxes or would you rather have something to show for your money? The choose is yours, but I think most Americans would agree that taxes suck and at least with treasury notes they can be used as collateral so we may enjoy the money now.

Posted by: Henry Schlatman at August 16, 2004 08:44 PM
Comment #21893

The tax rate declined across all income levels - but more so in the top brackets, the report said.

People in the top 20 percent of incomes, averaging $182,700 a year, saw their share of federal taxes decline from 65.3 percent of total payments in 2001 to 63.5 percent this year, according to the study by congressional budget analysts.
In contrast, middle-class taxpayers - with incomes ranging from $51,500 to $75,600 - bear a greater tax burden. Those making an average of $75,600 had the biggest jump in their share of taxes, from 18.5 percent of all payments in 2001 to 19.5 percent this year.


David, Doesn’t that say that the people in the top 20% pay 63.5% of all the taxes? I’m just a working man that isn’t even up to that chart, but I hate taxes. I think that the government takes enough of everyones money already. Just because some people are more successful I don’t think that they should have to carry the whole load while too many are getting a free ride.I don’t believe in class warfare. I’m low enough in the middle class (according to your chart I’m not even there yet) that I know many people that
ride the cart that I’m helping pull. My daughter has a 2 year old & is a single mom. She has worked at a fast food restaurant for 5 years and is too proud to go on welfare or get food stamps. She has a lot of friends that get everything that is out there for them. They tell her they get an apartment for $5 a month $400 food stamps and a check and free helth care (she does ues medicaid for the baby. Politicians talk about no health insurance for poor people & children as an issue. That is a joke. You don’t need insurance, medicade pays it all! They are not denied health care.I don’t go to the doctor unless I’m bad off because I have a high deductable to pay so I can afford insurance at all! Her friends go to the emergengy room for colds to get the medicine for free. I see help wanted signs all over the place, but why work if it would mean lowering your lifestyle? I used to fix up apartments for region p housing and in this small town it’s amazing how many millions of dollars are given away. How many towns are in America? That isn’t even counting the Cities who get the lions share. But cutting into those trillions of dollars over 10 years would mean that the democrats would lose some of that 90% of the poor people vote! I know that I sounds cold, but I’ve seen it with my own eyes. I have seen the eldery and handicapped do without because they don’t know how to access benifits they deserve,while slick young healthy kids scam their way through. The coporate welware that the republicans champion needs to stop.
I don’t know how much waste is in there, but it’s a large percent. I think food stamps should go (most of them are sold at .50 on the dollar and used to buy other stuff anyway). They could be replaced with a card or something that can only be used for food.
What I really wanted to bounce off you (because with numbers you are “the man”.)
Remember when Clinton & Bush sr were running against each other? Clinton increased taxes $250b & increased spending (investing) $250b. I don’t remember what Sr’s promise was. But any way, there was a public outcry to “cut spending first”
That never happened. I remember they were calling increases in spending on all programs cuts because they were not increasing as much as planned & due to inflation & all that crap. How much would we save by actually cutting every program across the board 10% & forcing each to cut the fat out at that level? Or at least freezing allocations at their current levels?
I can’t imagine 10% killing any of them. Like others have ssid, a lot of programs need shut down anyway. (helium reserve) yea right!


Posted by: joe gulat at August 16, 2004 09:37 PM
Comment #21896

David, I forgot to say that I agree with you 100% about the debt. It just sits out there ticking away like a time bomb, just waiting to go off! Americanpundit said on the liberal thread that “It’s pretty obvious which party is polorizing the country”. I guess he is forgeting the vote that I think really started it. The $250b tax and spend vote with no republican votes. I remember one democrat (George Stephonopolis,I think) saying with excitement “we don’t need the republicans”. I think both parties have put in their fair share of pork! You may have a point with replacing the incumbents, but I can’t see that happening.

Posted by: averagejoe at August 16, 2004 10:18 PM
Comment #21900

Taxes suck, Henry, they sure do. But war bonds or special notes, whatever you call them, need to be paid back. They are nothing but a loan to the government; again, the wealth of a nation and its people is separate, though interrelated.

David’s statistics show a good point, though with the wrong results. 42% of the deficit (an increasing number) is owed to foreign nations who are buying Treasury securities at auction. Japan owes the most because they currently pay NO INTEREST on their own securities. While their interests may be different, they will continue to buy our debt. As a matter of fact, if they DON’T buy increasing amounts of US paper, we are in serious trouble.

The “amount per family” or “amount per working person” statistics are misleading in the face that they ask every person to INCREASE THEIR TAX BURDEN by that amount. Instead of that, increase your purchase of American-made goods from American corporations, increase their tax burden, increase any surplus, decrease debt. It’s really that simple (well, not really but you get the point). Issuing debt solely to Americans is a non-starter; issuing special debt and increasing liability seems to be not helpful as well. All it would do is transfer the ownership; besides, some Treasury debt is call-protected meaning we can’t buy it back early.

Posted by: Adam Ilkowitz at August 16, 2004 11:10 PM
Comment #21901
…even if all these programs were cut, you are talking about cutting the deficit by only about 7.6 billion over 5 years. That will reduce our deficit by only 1.52 Billion per year. We are at 450 Billion deficit this year alone…

Are you saying it can’t or shouldn’t be cut then?

They never met a rich donor to their party and campaign who has no need to work, being so wealthy, that they did not have compassion for when it came time for tax cuts. :-)

Rich people who do not work… Kerry-Heinz’s and Kennedy’s?

Kerry is proposing something like 1.7 to 2.5 trillion dollars more spending over the next ten years. Without corresponding spending cuts. How is he going to cut the deficit?

Still no one can answer my question about Kerry’s massive spending proposals. He is on resord as saying he will cut the deficit while at the same time increasing spending on virtually every aspect of the budget, including the military!


Posted by: Eric Simonson at August 16, 2004 11:37 PM
Comment #21903

Ok Adam, I get what you are talking about. My idea just came up with how to raise the 10 trillion dollars, not how to build the economy along the way. However, like anyone with good credit will tell you if you can show you can repay that debt than creditors will loan you more, but go to defualt or show weakness and everything starts to go downhill. On that stand, how would you come up with a way to raise the money and ensure everyone the opportunity to enjoy an income?

Not so easy,

Therefore, our government must come up with a way to pay for the changes this country must make over the next few years. Like Y2K, we have to select the right way of controling our growing society, business, and individual needs of our citizens. What system works to do the best for the most people? And, How do we handle the side effects caused by such decisions? Do you really want to live in the seventy’s again? We can do better, but we need to wake up the politicans and send a clear and present signal that unlike our parents, we do want real “smart” change for America. Both side of the issues have good ideas, what we the people need to do is to change the questions. Why does our government allow companies like Wal-Mart to operate in any area that causes that comminity to lose income. That’s UnAmerican! Read your state constitution and city’s charter. Our local governments has a duty to regulate commerce for the betterment of the community and its residents. It’s not the system thats off track, its the leadership and the chioces they think that they can slide by without alot of protest. How about our elected officials doing whats right for the people they serve?

Posted by: Henry Schlatman at August 16, 2004 11:53 PM
Comment #21911

Henry, getting to your question

On that stand, how would you come up with a way to raise the money and ensure everyone the opportunity to enjoy an income?

Exactly the way we operate today. Foreign consumption of Treasury debt will NEVER end. Americans own less because the interest rate decline led us to put our money elsewhere while foreigners like 2% from us better than less from their own governments.

As you said, you can’t live in the 70’s. Runaway inflation WILL OCCUR if you issue the special debt you were considering. That is assuming you can even sell this debt to the public without a crisis to convince public participation. The interest rate necessary would be prohibitive to say the least.

I don’t understand most of your second paragraph. Wal-mart works because it betters the greater good of the community; income goes down for some, purchasing power increases and expenses decrease. Quality of life for most, if not all, increases. Why is that unamerican?

Free market economies dictate optimum efficiency is the goal. Wal-Mart operates closer to the optimum than the higher-income, higher-expense idea you are suggesting is American. The ‘betterment of the community and its residents’ has been tested by voting of the ‘community and its residents.’ Majority of votes have come in favor of Wal-Mart, soon to appear in California (LA) and NY (Staten Island, a borough of New York City).

Doing what’s right for the people they serve? Is that the few who’s income decrease or the majority who’s costs decrease? Hard to answer, its a moral call more than a simple majority rules.

Posted by: Adam Ilkowitz at August 17, 2004 12:53 AM
Comment #21912

One more comment Henry - why would replacing a $7 Trillion deficit with a $10 trillion deficit be a good thing?

Posted by: Adam Ilkowitz at August 17, 2004 12:54 AM
Comment #21913

Adam,
You are looking at the treasury bonds in a mono-level way. Our government sell bonds to inhence businesses, in turn, the businesses create wealth, and the citizens pay the bill. My idea would allow the citizens to use the leverage of the people to inhence our government to select the corporations that help build a more prefect nation than the current model of marketing of sex, drugs, and rock and roll. Again, I ask you how would you play the game? Do we just keep growing the debt or do the American people invest in our own country? Decide!

Posted by: Henry Schlatman at August 17, 2004 01:42 AM
Comment #21917

Henry and Adam, one point jumps up as clear in your discussion. The interest on our debt (300 some billion this year) can be reinvested here in America through American investors, or, it can be sent overseas to line the pockets of foreign investors. Needless to say, interest paid to Americans is preferable as it has compounded benefits which address some of our other problems. American investment returns are more likely to go into stocks and underwrite capital growth. American investment will have a positive effect on American savings, a serious weakness of our current economic situation, which affords no buffer for millions of Americans between adversity and bankruptcy.

But, given that, the question was also raised, how do we make American underwriting of our debt competitively advantageous for Americans and competitively disadvantageous for foreign investors? It is entirely within the purview of the federal government to add a preferential interest bonus to Americans who buy federal treasuries and bonds. But, from a purely profit motive, when the economy is improving, even slowly, stocks are a preferred investment over treasuries and bonds. The Catch 22 is, treasuries and securities only sell well to Americans when the economy is looking sour, and when the economy is looking sour, Americans slow and reign in their investing taking much larger cash and short term instrument positions.

The only way increased treasuries and securities can be made palatable to more Americans is to attach a non-profit incentive to them, much as the federal government did in WWII when it attached a Patriotic incentive to buying war bonds. The right leader in the whitehouse could possibly sell such a non-profit incentive, but, the real issue for American investors vs. foreign investors will still not be addressed.

That issue is psychological. Americans deal with investments almost exclusively in the short term. Foreign investors to a much greater degree, take a longer term perspective to investing. That is the primary reason foreign investments are growing (although, personal credit debt held by Americans is not to be dismissed as it precludes investing since paying off a 6% note offers greater yields than buying into a 3% interest bond).

Frankly, I cannot see how we can increase US investments in our own debt without raising real incomes for working people and promoting their reduction of personal debt at the same time, as well as altering in some way the time-line perspective for American investors from short-term to long-term.

Not even Greenspan has an answer for these questions, and he is a pretty smart guy, a whole lot smarter on these issues than I or probably most folks debating here.

Posted by: David R. Remer at August 17, 2004 02:44 AM
Comment #21918

David,
Thanks, now that we got a grip on the issue lets discuss how to how a political leader can sale this idea to the American People. Anyone who was alive in the 90’s now know what the market is and how powerful it can be in driven our wealth. However, it is time to teach everyone the art of investing. With more than 98% of Americans not having cardinal knowledge of “What the cost of eggs in China have on me?” needs to be educated in economics 101.

Otherwise, the terrorists win. For how many examples of history do we need to show that in order to lift the top half of the praymid, we must re-enforce the foundation of our society. This means accepting a whole new attitude by our political leaders. As we allowed the increase in management jobs in the 80’s, our government must address increasing the wages of employees while balancing the cost to employers. For example, if Pesident Bush would of used the budget surplus to give congress the task of changing the payroll taxes, we all could still be living large. By decreasing the taxes the Small Businesses (under 100 employees)have to pay for each employee by say 50%, we give the owner of that business the opportunity to reward his/her workers with a huge pay raise, invest in their business, and find money to help those employees that aren’t up to speed. This money would of quickly been put into use by our citizens as we race to have the latest greatest things.

Posted by: Henry schlatman at August 17, 2004 03:15 AM
Comment #21923

However, if the goal of our country is to become debt free and operate solely on a pay as you go method, than we run into the same problems that our forefathers faced in the mid 20th Century. However, this is not to say we keep going down the same path. Although we can not predict the future, we can work on keeping the varibles in check. The questions now become which ones do we select. Like I said early what systems will give us to biggest bang for the buck and how do we protect our citizens from the side effects of those policies?

Now as far as the three trillion dollar annual federal budget, the cost must be factored into any plan. However, the current tax laws and the way our government spends money can and should be changed. For example, our military and law enforcement must have updated equipment and intellegent if they are to win the war on Terror. It is a crying shame that our military had to wait for a congressional hearing to get the modern armor promised by our political leaders before the war began. Although I relize that some people still believe we spend to much money on this department, the truth is that much of the money is directed at the wrong weapon systems. What weapon systems do we need right now and which weapon systems do we scale back or cut all together. Only by totally revamping and reoutfitting our entire military into a 21st Century fighting machine can we really cut a majority of the waste of pork barrel projects. Does another F-22 help fight the war on terror or does our military need to be outfitted with the new M-29 rifle?

So as we debate on how to lower the debt, we must face the hard facts that our government must spend money to build a more prefect nation, ensure domestic tranquility, and provide for the common defense. Nevertheless, by changing some attitudes and some operating rules we can approach the solutions to the debt better. For example, why is it a law that our local, state and federal gocernment can not make money. Although this is probably a good idea knowing some politicians, the concept of a break-even mentality of our elected officails would be nice. Why and how is it possible that corporations like Wal-Mart can pay its employees so far below the community standard of living that the employees have to ask for public assistance while our political leaders and shareholders do nothing but complain about the rise in social programs. Doesn’t it make fiscal sense to either tax the company into compliance or better yet, force the company into paying a better wage to employees. The fact that the attitude and ignorance (sp)of the general population on the technical terms of finance and the greed of some business leaders has lead us into this problem. It is up to the Ceo’s, Experts, and people like us to set the limits our politictions have to operate the bare necessities of our society, fix the livable wage issue, and provide a clean opportunity for investment and growth of our economy. Look forward to reading your ideas on these issues Adam and David.

Posted by: Henry Schlatamn at August 17, 2004 07:52 AM
Comment #21935

Resources, labor, technology (knowledge) and capital are all vital components to prosperity. We live in a world where political power is derived from capital whether in China or the United States. The inroads made by labor during the turn of the last century produced the worlds greatest economy, many workers were educated, spent most of what they earned and our vaste resources were spread somewhat Democratically around the population with programs like homesteading. But even unskilled workers earned a good living. All that is over, first unskilled workers were marginalized, now educated workers wages are under siege. The superrich wield unprecedented political power and want it all. They don’t care what happens to the working class or the country. They are traitors to the American Dream, but hire spinmeisters to bamboozle workers, using politically charged words, like capitalism, communism and terrorism to manipulate with Orwellian methods. The irony of the whole mess is they actually gain more when they permit workers to prosper. Capital investment has never driven our economy. It has always been consumer spending. You would never understand that listening to Bush, the Republicans and their apologist economic teams.

Posted by: bayviking at August 17, 2004 10:31 AM
Comment #21938

BV,

The inroads made by labor during the turn of the last century produced the worlds greatest economy

At the beginning of the 20th century the increased labor demands contributed to the eventual (and probably inevitable) Great Depression.

At the beginning of the 21st, you have the dot-com bubble.

Which phenomenon do you wish to credit to generally coercive economic policies?

All that is over

Yes, the bubble burst. The great ponzi scheme didn’t sustain itself forever. And now you point a finger of blame outside the ponzi scheme itself. Pathetic.

The superrich wield unprecedented political power and want it all.

Yes, the limousine liberals do want to squeeze the middle class for all they can get away with. Tax the working man, give 12% of the loot to the poor, and pocket the difference. Wash, rinse, repeat.

Then they shed crocodile tears for the disappearance of the middle class.

Capital investment has never driven our economy.

Why indeed, just remove the ability of anyone anywhere to invest in business and the workers can, out of a vacuum, create prosperity. Much like standing in a bucket and lifting oneself up into the air. Was that not tried, in 20th century Russia?

Posted by: Ciggy at August 17, 2004 11:23 AM
Comment #21940
Am I the only one around here with a calculator? Add up your numbers folks, and see if they support your statements. If you don’t, I will.

David, I said those were just interesting bits from Kerry’s plan, not the whole plan. And you didn’t address the most significant part of the whole post, “John Kerry will be willing to sacrifice some of his own priorities if necessary to keep spending under control.”

Until Kerry has the OMB crunching the numbers for him, there’s no way you’re going to get the final numbers you want. I’m convinced that Kerry is focused on controlling spending, just like he did as a Senator when he supported Clinton’s economic plan.

To put it another way: Bush has already demonstrated that he can not or will not be fiscally responsible. Kerry says he’s willing to give up some of his programs to keep spending under control - he’s promising to keep spending growth at or below the inflation rate.

So you can ring alarm bells about the debt all you want, but what are you going to do about it?

Posted by: American Pundit at August 17, 2004 11:50 AM
Comment #21944

Ciggy,
Did you read my first sentence? Capital is clearly a vital ingredient. After first shooting unionizers, Ford’s wife made him give workers $5 a day and the economy exploded. Soon many people had enough money to buy a $200 model T. Before that there was nothing but quasi-slave labor in an asphalt jungle, company stores, supplied by massive waves of immigration. You might escape to a farm, but only if you homesteaded. As for the cause of the great depression, deregulatory conspiracies between government and wall street elites led to a stock market collapse. The fed didn’t know what is was doing and insiders were manipulating stock prices to cheat the masses. In other words fraud and incompetence were rampant. Sound familiar? Remind you of anything being repeated today? Marx predicted all of this, it just never happened in the countries or at the times which politicians in the US or Russia purport. Of course most economists and think tanks employees understand that they only have a job if they promote rationalizations seemingly favorable to old money. New found fortunes operate outside these parameters, but are a small fraction of our wealth.

Posted by: bayviking at August 17, 2004 12:32 PM
Comment #21947

A. Pundit, you are as blindly partisan in accepting Kerry’s words as Eric is in accepting Bush’s. The fact that a huge part of the current debt accrued under the Clinton Administration including those years when the Senate was Democratic, speaks to fact about the Democratic record. The fact that the largest deficits ever occured under Bush with a Republican Congress speaks to fact about the Republican’s record.

If you choose to believe Kerry’s campaign rhetoric instead of the Democratic record, that is fine, but, don’t ask objective non-partisan folks to believe what history has disproven time and time again. Kerry may, in fact, use his veto pen and abide a pay as you go policy as President. If he does, then there is reason to believe. But, in the absence of a plan or numbers that add up to support his claim, he is just another politician promising pie in the sky for votes, as far as I am concerned.

I am completely, and thoroughly through believing campaign promises by Democrats and Republicans. They have both run on promises to be fiscally responsible, and they have both lied through their teeth, pandering votes for their party’s candidates through unbridled tax spending. Missouri has the slogan appropos’ here, “SHOW ME”.
Show me the numbers, and then I might be willing to believe with while holding onto a healthy amount of skepticism and vigilence.

Posted by: David R. Remer at August 17, 2004 12:39 PM
Comment #21948

Ciggy, what history book are you reading? Unions prior to the depression, what few their were, had no teeth and little bargaining power. It took the weight of law post depression to give Unions effective bargaining power. Child labor, 15 hour a day sweat shops, and a host of other unregulated capitalist practices were rampant prior to the depression.

I know you pooh pooh the relevance of fiction but, Charles Dickens, fiction, accurately portrayed the plight of labor prior to the Depression. You should try reading a bit of Dickens before you try to blame labor for society’s woes.

That said, there is no question unions sowed the seeds of their own demise in this country in the late 60’s and 70’s when they forced Ford Motor co. to pay a floor sweeper/light bulb changer $12 dollars an hour back in 1971 - a situation I witnessed first hand. Unions, like any group with power for any period of time, abused their power and sowed the seeds of erosion of their own power base. The UAW is half what it was due to its own abuses of power. Power corrupts, absolute power corrupts absolutely.

From bookbrowse.com:

The earliest recorded source of this expression I could find was in a speach by the British Prime Minister, William Pitt who in 1770 said ‘Unlimited power is apt to corrupt the mind of those who possess it’

A century later in 1887, Lord Acton stated ‘Power tends to corrupt, and absolute power corrupts absolutely.’

Isn’t amazing how adept humans are in modern times to forget important life lessons forcing adversity to reteach them again in and endless cycle. History is the method of avoiding that human foible. But, now we see folks, rather than learning history, rewriting it as they speak to make it support their own belief and conjecture and ignorance.

There can be no greater offense to human cumulative learning and knowledge than this. And yet, in America, we are turning it into a political sport.

Posted by: David R. Remer at August 17, 2004 01:01 PM
Comment #21964

Henry said: “However, if the goal of our country is to become debt free and operate solely on a pay as you go method, than we run into the same problems that our forefathers faced in the mid 20th Century.”

I don’t think the goal of being debt free or operating solely on a pay as you go basis, are practical. In times such as these today, legislating debt reduction and pay as you go are justified since failing to do that makes us vulnerable as a nation. However, natural disasters and geopolitical events can and should mandate the government deficit spend in times of emergency.

Flexibility is a characteristic of government that is admirable mostly, and rarely found in many areas of government. But budget flexibility is vital to our nation’s ability to adapt to and accomodate change.

One thing though is absolutely clear to me. Pork spending of federal tax dollars diminishes our ability to be flexible, compromises our ability to deficit spend in real emergencies, and threatens the future of our nation.

I read now the DoD and Rumsfeld are hesitant to endorse the 9/11 committee recomendations. One of those being removing 80% of the intel budget from the Dept of Defense, and placing a large part of under the new National Intelligence Director (NID). They want to maintain the cloak of secrecy that surrounds the DoD budgets. Secrecy is anathema to democracy. Some secrecy is required by our military-intel dept.s, that is obvious. But, the current practice of calling everything secret as a means of saving time and insulating government from criticism could not be more damaging to our democracy.

Secrecy was behind the intel agencies not talking to each other. Thus, despite the fact that we had all the intel we needed to prevent 9/11 from happening, secrecy was the primary cause for 9/11 not being prevented. Did we learn? Hell no. This Administration is continuing to make as much of its actions and consequences of its actions secret as possible.

Secrecy in the bugetary process has also got to end, with few exceptions. We the people pay the taxes, we have a right to know what each and every dollar we send to D.C. is spent on, except for those funds applied to current operations which in being revealed would telegraph tactical or strategic plans for our military or intel operations. Once an operation is over, the budgets and accounting must be made transparent. Accounting is what keeps business managers honest. Budget transparency will go light years toward keeping an administration, regardless of party, honest as well. The American people deserve no less.

Posted by: David R Remer at August 17, 2004 06:19 PM
Comment #21972

bayviking, you are not helping your cause by making claims that suggest all rich people and all corporations abuse labor via their access to political power. The head of Hewlett Packard, Firoini, I believe, is a notable exception of a rich CEO who believes in employees profiting with the corporation. A number of corporations also offer in addition to good pay and benefits, profit sharing programs in which employees directly benefit from the company or corporation’s profitability.

If I may be so bold as to make a suggestion, the use of the words ‘many’, ‘often’, or even ‘most’ are more credible when talking about groups of people, since within any group of persons, their will be those who are uncharacteristic of the group, proving the exception to your claim by those you debate with.

USAA, the second or third largest insurance company in the U.S. shares its profitability with its customers and employees through a rebates and bonuses. While a politically conservative company, USAA does not actively exploit their customers and employees for pure profit motive, but instead reward them when the company’s profitability is maintained or increased. It is important in a debate to leave room for these type of exceptions which can weaken your position on counterpoint. It also helps to make political debate less vitriolic and blood boiling.

Posted by: David R. Remer at August 17, 2004 08:36 PM
Comment #21974

Christopher Fahey said: “The Grover Norquists of the world, however, have a more foresight than Bush’s team. They, in fact, have a long term vision; their policies are less reckless but more evil. They are thinking that Bush is, in fact, doing the right thing: pointing our country straight towards a fiscal crisis of monumental proportions. And the solution to this crisis, they hope and pray, will be to totally dismantle the federal government. This is the endgame of the “starve the beast” strategy, and it is apocalyptically insane.”

I am seeing more and more references to this line of thinking. Often from Libertarians and ultra conservatives who believe bankrupting the U.S. is the only way to truly pin the blame on socialized policies, and permit starting over on a purely capitalist free enterprise (invisible hand) basis. God help us if they acquire too much influence in the Congress.

We simply must keep this national debt crisis before the voters. They know what to do when they spend two minutes contemplating the situation.

Posted by: David R. Remer at August 17, 2004 08:41 PM
Comment #21976

BV,

After first shooting unionizers, Ford’s wife made him give workers $5 a day and the economy exploded.

And it took no capital at all to pay the $5 a day?

The point I’m trying to make is that labor and capital have a symbiotic relationship. The worker is also the customer. The boss is also the supplier. Kill your supplier, and your Proletarian Worker (everyone remove hats in reverence!) has a higher cost of living. Kill your customer, and you have no cash-flow to report on your corporate balance sheet.

To quote Mr. Miyagi: BALANCE, Daniel-san.

Marx predicted all of this

Did he also predict that Russia would prove a case in point for how very, very wrong he was?

Of course most economists and think tanks employees understand that they only have a job if they promote rationalizations seemingly favorable to old money. New found fortunes operate outside these parameters, but are a small fraction of our wealth.

MSN Money begs to differ:

“Most millionaires today don’t have inherited wealth. They’re not driving a Jag and they’re not flamboyant or flashy. They work hard, they’re frugal and they save and invest well,” says Walt Zultowski, senior vice-president of business and market development at The Phoenix Cos.

…but of course you’ll just say MSN Money is a lackey tool of old-money Capitalist Pigs like that very old-money, very blue-blooded Bill Gates. Yeah, Gates comes from a LONG LINE of dynastic captains of the software industry.

David,

If you choose to believe Kerry’s campaign rhetoric instead of the Democratic record, that is fine, but, don’t ask objective non-partisan folks to believe what history has disproven time and time again. Kerry may, in fact, use his veto pen and abide a pay as you go policy as President. If he does, then there is reason to believe. But, in the absence of a plan or numbers that add up to support his claim, he is just another politician promising pie in the sky for votes, as far as I am concerned.

Holy Open Debates, David! That paragraph made you sound almost… Third Party… for a minute or two! ;)

Seriously though, it was refreshing and gratifying to read those words coming from someone other than just me.

Then you burst my bubble with this:

Child labor, 15 hour a day sweat shops, and a host of other unregulated capitalist practices were rampant prior to the depression.

I was going to consult the Bureau of Labor Statistics to roundly refute the myth of America being hell on earth at all times prior to FDR, but sadly it only goes back to 1964. I’ve instead had to scare up anecdotal tidbits from sources like this, which makes the job tedious. Here are a few:

“Back in 1900 half of all worker deaths occurred in two industries—coal mining and railroading.”

So yes, if you were a coal minor or a railroad worker, your job doubled as an extreme sport akin to base-jumping. Otherwise, Dickens remained fictional.

“Hours of work for both men and women were shorter in the United States than in most other nations in 1900.”

What the Dickens were we thinking? Leading the world in working conditions without the coercion of FDR? For shame!

If you look at the table of income and consumer price index, you’ll find that you can easily paste those numbers into a spreadsheet. A simple Excel calculation of the second column (“after unemployment”) as a ratio over the consumer price index, will show that at 1902 levels, real worker prosperity was at a level that wasn’t to be duplicated until ****1941****. Rather than catapult worker prosperity forward, Roosevelt had to do what he could to return standards of living BACK to 1902 LEVELS. Now, what is it that torpedoed that prosperity? What were the events of 1903 and 1904 that started the downhill slide? What accelerated it in 1914?

If one were to adhere to Democrat articles of faith that it’s always a President’s policies that have the deepest and most direct impact on an economy, one can see here that in 1900 Republican President William McKinley had been re-elected to a second term. Teddy Roosevelt (Republican in name, but Progressive at heart), took over upon McKinley’s assassination in 1901. It was right about this time that the Progressives were rising to power in the cities and states (remember what I said about coercive economics?) With the economy as a trailing indicator by 2 to 3 years, one will see that the 1902 peak (in terms of worker prosperity) turned a corner when the Progressives took over. In many ways, Teddy Roosevelt not only didn’t stop, but accelerated, this new tidal wave of minimum wage laws and other regulations from taking over the U.S. economy. It wasn’t precisely UNIONS that were pushing it, but rather, intellectual elites from the privileged class of the major cities—the old school version of Limousine Liberals.

The impact of the Progressive onslaught was not immediate. Although sharp increase of general prosperity for workers, experienced from 1900 to 1902, had stopped dead in its tracks, neither did it sharply decline. It was like the slow bleeding of a victim, a death by 1,000 cuts. One by one bricks were added to Atlas (who as yet didn’t know how to “Shrug” per Ayn Rand’s exhortation), and little by little the economy slowed down. Then in 1914 something happened. The downturn got drastic. The ratio went from 6.5 to 3.3 from 1914 to 1920. Who was President at that time? BINGO. Woodrow Wilson. Democrat. Progressive.

Henry Ford’s assembly lines at $5/day were powerless to stop the decline. Unions had now joined forces more forcefully than ever and were becoming violent. The Ludlow Massacre, the Everett Massacre, and many more that went more or less undocumented, pitted inflamed and misled workers against reactionary and misled industrial bosses, as each side got the wrong idea about the goals of the other. Rather than peaceful cooperation between management and worker, the Progressives had incited the worker to vaguely and faintly Marxist revolts, on the one hand, and the industrial leadership to unprecedented greed and cruelty on the other (perhaps even seeking out an atmosphere of conflict in order to strike the two forces together, like flint to iron, to spark what they hoped would happen as it did in Russia?)

In 1920, things started to perk back upward. Harding came onto the scene vowing “a return to normalcy”, and things started to do just that. From the Wilsonian nadir of 3.2, Harding’s steps upward into the 4’s for worker prosperity made the ’20s seem like… “the ROARING ’20s”!

Under Calvin Coolidge, Harding’s sharp rise in prosperity was matched by a slower rise. Not much positive or negative to say there, except that the major issues were social and not economic. Prohibition, gangsters, et al.

Herbert Hoover inherited Coolidge’s legacy, but couldn’t build effectively on it. Banking got out of control, and the Depression was history.

The factors contributing to the Great Depression were indeed mostly banking-related and securities-related, but the coercive policies of the Progressives had created the problems that the Depression exacerbated. And it had created the post-WWI Depression which was arguably worse than the “Great” depression, when seen in terms of real standard of living for average workers.

In sum, David, yes, I’ve read some history. Have you?

Posted by: Ciggy at August 17, 2004 09:35 PM
Comment #21977

Interesting addendum. If you follow that same chart and look at that same ratio, you’ll see that in the time span from 1900 to 1980, the worst economy in terms of worker prosperity (wages as a ratio to cost of living) was in 1980, the legacy of none other than… Jimmy Carter.

He and Michael Moore were a fitting pair.

And to be not quite so caustic to Democrats as a whole, the peak between 1920 and 1980 was in 1966, under Lyndon Johnson (probably inherited from JFK’s policies, since 1967 saw the beginning of a decline that continued steadily until the end of Carter’s administration).

Come to think of it, I would hazard a guess that the strongest correlating factor in the worker prosperity chart would be national solvency.

And that feeds right back into the title of this thread. We’ve GOT to get a grip on this debt, as David says. When the nation is more solvent, spending less by way of the government, subsidizing less of the lazy (either in the trailer parks OR in the corporate defense contractor boardrooms), workers benefit. And vice-versa.

Posted by: Ciggy at August 17, 2004 10:07 PM
Comment #21989

Question: Why are you looking at the debt problem from only one view? Not only does government spending play a part of the debt, but the value or devalue of the dollar does as well. The latter being more important than the first. That is why it is better for Americans to hold the country’s debt than forgien countries. You see, we can add value to the dollar in several ways; our government can add infrastructue, our businesses can retool and expand, and individual wealth. Selling our debt bonds abroad only devalues the dollar, yet is a very important part of our economy. Therefore, you can not blame just the liberals or just the conservatives, history has shown us that neither party has done a good job. The secert to solving our debt, lowering our taxes, and maintain our government rest in finding harmony and balance in the way we use the tools of our economy.

However, if you are looking to decrease the national debt and improve the standard of living for everyone than the tools to do so do not currently exist. For example, if our government could raise the 3 trillion plus for this years budget by selling treasury notes than how much taxes would have to be levyed by our government? None? A little? Won’t work they still owe the money plus the interest? Which answer do you think is right.

Posted by: Henry Schlatman at August 18, 2004 12:33 AM
Comment #22014

Adam,
I asked you how you would play the game so it is only far to tell you how I would like to see the national debt/federal budget played out. However, to explain there has to be parameters and fuctional law set in place.

To start with, our current federal government needs approx. 3 trillion dollars to operate. That equals roughly $13,000.00 for every man, woman, and child in America (2000 Census report about 288 million). Now, How does our government get the money for them to spend? Taxes first, selling of securities last. What a good way of raising revenue you are never responsible for. It seems to me that if you had to see the money payed back in your lifetime than maybe it would matter how you spent it.

My idea kinds of turns the tables sideways, sort of like giving your kid an allowance. If this country still belongs to “We the People” than why is our current politicians giving us an allowance? If I could change the system, I would like to see our government transend into raising revenue the old fashion way, earning it. As we stand at the foothold of the 21st Century, the people need to ask themselves “Do you want to keep blindly paying taxes or are you willing to invest in you and your country’s future?” Sad to say, but theres no other game in town cause the third option (let the country go to —ll) isn’t an answer at all.

Here’s a rough idea how to make it work. Understand that some laws would have to be changed, implwmented, and so forth.

Due to the fact that most individuals do not have the 13 grand and the average family can’t afford the 52 grand to pay flat out their fair share of the federal government or is that the truth?

Remember taxes? What about the payroll taxes taking out of you check every two weeks? By the way, what ever happened to being payed weakly? Well, back to the idea. Do you think most people realize that an employer has to pay the government almost the same wage he pays his/her employees? This untapped source of money could be used to make the cut for most folks(roughly $6.50/hr); however, some of these taxes are probably good. Well, we’ll have to save that debate for another day.

Instead of letting this money get taking out in taxes, why can’t we have this money be used to purchase treasury bonds? You see by purchasing savings bonds you would loan the money to our government to operate the needed programs for our society and grow(see prior to 1860’s). Sort of like an IOU, the only difference is our government don’t have to pay it back, but is required to print it into “Green Backs.” The taxpayer now turns into the investor. This idea gives people the reason they need to get involved and vote. It also provides an actual growth in their wealth in several different ways. The notes can be used as collateral for purchasing items, add to their wealth plan, and supplement their income, just to mention a few. However, the sudden influx of money into the open market would wreck the worlds market, including ours. Therefore, for the first few years, this money could only be used to help rebuild our schools, roads, and other major public projects like Tidal Generators.

By changing our government revenue system into an investment first and taxes last, we create a double wamme. First, the individual citizen gains wealth and second the country grows wealth. Even our businesses would grow becuase more people would have more money. Although limited at first, our businesses would enjoy a boom as alot of the middle income and lower income families plan for their future. As a business person, wouldn’t you like to see a customer come in with $13,000.00 each year to spend? Can we say profits!

Like I said Adam, its a rough idea, but one worth exploring. I will openly omit that some of the side effects have to discussed in depth, yet I am certain that with the economist like Mr. Greenspan the hurdles can be overcome. Besides, many companies have and our doing the same thing.

Posted by: Henry Schlatman at August 18, 2004 09:39 AM
Comment #22018

Henry, one fatal flaw. Companies take capital investments, create a product or service, sell for the cost of the product or service, plus interest on the investments, and add profit to the cost of selling the product or service. The Federal government has nothing to sell but trust? The Gov’t builds the interstate highway system, and corporations and truckers reap the profits, for the roads the tax payers built. Yes, tax payers get to use the roads too, but, that is beside the point. The government builds munitions, blows & blows ‘em up. Where is the profitabillity in that. Even when the government authorizes munitions sales to other countries, the government gets little back, save for a bit of tax that didn’t make it through the loopholes by the munitions makers.

The model just does not work for government. This is what conservatives struggle with all the time. They hate the idea that government can’t be turned into a profit making machine, well, not since the end of the colonialism and empirialist days of the 19th and early 20th century.

Posted by: David R. Remer at August 18, 2004 09:51 AM
Comment #22023

Ciggy:
Chicken and eggs arguments do not amount to much difference. None of what I said applies to self made men. Bill Gates, the richest man in the world is dwarfed by old money (Ford, land barons, insurance comapnies….) and total annual worker wages. But workers are rarely able to assert their interests for political and economic reasons. While PG&E can spend tens of millions of dollars increasing electric rates, the consumer cannot match those resources and would get only a 1/100,000 benefit if they did. The only real defense has been unions, which when aged and corrupted become a problem in their own right.

Posted by: bayviking at August 18, 2004 10:21 AM
Comment #22029
But, in the absence of a plan or numbers that add up to support his claim, he is just another politician promising pie in the sky for votes, as far as I am concerned.

David, I said if you’re just going to say Kerry (or Bush) is a liar, then I don’t know what the point of this subject is. You’re taking the discussion out of the real world and into the realm of the theoretical.

Taking a wait-and-see attitude is certainly an option, but it doesn’t advance your cause. It’s just sittin’ around and bitchin’. I know you like Nader, but what makes you think he’s better than any other “pie in the sky” politician? He’s got far less of a track record than either of the two major candidates.

Posted by: American Pundit at August 18, 2004 11:00 AM
Comment #22030

Henry,

Not only does government spending play a part of the debt, but the value or devalue of the dollar does as well.

Stronger currencies make the price of imported goods and services appear more attractive, and makes the hiring of foreign labor a supreme corporate temptation. This is not to say a strong currency is a bad thing, but it’s not without its tradeoffs (no pun intended).

For example, if our government could raise the 3 trillion plus for this years budget by selling treasury notes than how much taxes would have to be levyed by our government? None? A little? Won’t work they still owe the money plus the interest? Which answer do you think is right.

It’s like public finance at the state and local level. You sell the bonds, you have to take later to pay off the bonds. And while you’re taxing later to pay off those bonds, you have to sell yet more bonds to meet the operating expenses of those budgets. And so on, and so on, and eventually you’re in a Californian mess. Turd World status, with moneyed rich people still demanding vegan omlettes at Spago, and welfarized poor people permanently addicted to the Soma handouts. The immigration situation with Mexico would reverse by then, as people flee the ruptured U.S. economy and seek the relative prosperity of Monterrey car factories, 12 hours a day for about a buck and a half an hour. Luxury.

Bayviking,

But workers are rarely able to assert their interests for political and economic reasons.

Populist power is generally in balance with monetary power here in the U.S. today. That is the one remaining pillar of stability we have that keeps us from absolutely and completely going to hell. Knock it out from under us, and watch the absolute collapse of any semblance of power this nation thought it ever had.

The only real defense has been unions, which when aged and corrupted become a problem in their own right.

Unions themselves form a major strain of the populist power that keeps monetary power in balance. But when unions get corrupted by certain interests (typically Limousing Liberals), it’s just as bad as Halliburton getting no-bid contracts paid for by Iraqi oil.

Posted by: Ciggy at August 18, 2004 11:06 AM
Comment #22045

David,
Good Catch! Thats why I siad it would take a plan on how to implement. Just like America did back in the 70’s when President Nixon took us off the gold system becuase our dollar was so strong at 11:1 that something had to be done. In that plan we would have to learn investment 101. Remimber, low bonds means high stocks, while low stocks means high bonds. Becuase the funds would have to be moved back and forth between the two (actually three can’t foreget the money market). Like I said in may argument, the tools to do this do not exsist, but like the controls our government has on the current tax everything method the control factors can be controlled as long as we elect people with the intellegent to do so and stop spending money unwisely. Besides, America does have something more than trust to sale. How much our you willing to invest in your freedom?

BV,
Hi, You are right about it follows the state and local lever of government. What a rush, finally, the federal government will be back on a level playing field. However, unlike the state and local government our federal government has the right to print money. Now do I say immedaite release those funds into the market thats what the Nixon Administration and that we won’t even talk about. However, economist like Mr. Greenspan could in my opinion run it like they run the current one. All my plan does is front load the money instead of back loading it.

On the question, the budget would be the cost of side effects plus the interest of the notes. Once a note is issued it stays in play under SEC until it reachs its maturity. by than hopefully we are smart enough to grow our economy at the same rate 3-7% over the next — years.

Remimber this is America, when have we ever backed down from a challange or is living in stalemate sound better.

Posted by: Henry Schlatman at August 18, 2004 12:14 PM
Comment #22073

A. Pundit, Bush is a liar, just look at his 2000 campaign speeches and the RNC platform. As for Kerry, all I am saying is what the Missourians say, “Show Me”, then I will decide whether or not to believe. I am not going to accept his party affiliation as an affirmation of his principles over his desire for votes and power.

Nader does not want to be President. That eliminates the kind of power motive Kerry has, from my assessment of Nader. Leaving it a bit more transparent that Nader’s principles are his primary motive.

Mid life crises can motivate folks to do extraordinarily good and bad things. I believe most politicians begin their careers wanting to serve. I also know that far too many public servant biographies demonstrate how government and the system can grind their altruistic motives down to grains blown away by the breeze of years passing. If Kerry wants me to believe, he needs to show me the numbers. If he doesn’t have numbers that add up, (and he doesn’t yet), then his promises must remain suspect.

Posted by: David R. Remer at August 18, 2004 03:55 PM
Comment #22074

Henry, there is no price tag that can be placed on freedom. If you ain’t got it, you would pay anything to get it, even your life in some cases.

But that sidesteps the issue. People don’t invest dollars for freedom, they invest dollars for profit. They pay taxes willingly (well, a majority, anyway) for freedom. Unless you are a Libertarian, then you pay taxes for defense, but only reluctantly :-)

Catch that, Misha? Just kidding !!!

Posted by: David R. Remer at August 18, 2004 04:01 PM
Comment #22076

Ciggy, that is an interesting interpretation of history, you have there. But, I must apologize, the time and effort to research and rebut is not available. I concede this one. And yes, I have read my history and still do, but, as we both know, history is full of its own bias compounded by that of the reader’s. That is why I will concede, you did your homework in presenting hard data which is commendable, though selective, and I don’t have the same time to put in on a rebuttal. You deserve one, and I apologize.

Posted by: David R. Remer at August 18, 2004 04:24 PM
Comment #22103

David, how can you say people do not pay for freedom. How many of our veterans have paid the ultimate price so all of us can be free? The greed for the almighty dollar has to take and should take a back seat to the well being of our country.

As far as taxes, you must not have to write a check to the IRS every three months. It’s not that most pay taxes willingly, but the knowledge that if they don’t they will go to jail. Well, unless your Willie Nelson and than you still have to pay.

For the last 4-5000 years many nations have tried to use taxes to create wealth and at best have bankrupted their country. Taxes act as an anchor to our capitalist system. Though needed in times of trouble, the majority of the time the treasure is used to buy favors for and from the elite. By putting control for funding for social and commercial welfare programs into the hands of the people who have to pay the bill while decreasing their need for such programs just makes better sense. However, like any economic plan it has to be governed or managed with care. If we were to go out tomorrow and give the masses a check for 13 grand, not only would the stores be bare, but the productivity of our nation would colaspe. Although $13,000.00 may not sound like alot to someone making the top 20%, anyone making under $30,000.00/yr would think they died and went to heaven as they would see their personal income almost double.

Can the Republican trickle down theory do that? Or how about the Denocrats, can you really state that thier idea of big government spending makes anybody but the rich wealthy? Ever wonder why it is that when you get a raise it always puts you at the base of the next highest tax bracket? Its time to give the educated labor froce an opportunity to enjoy the better life. Or do you subscribe to the idea that the almighty dollar rules and the poor can go to.

Posted by: Henry Schlatman at August 18, 2004 10:06 PM
Comment #22112

David,
Henry again. Question, do you think my idea adds a different deminsion to the left and right agrument over our economy? The sercret is how to keep the supply and demand balanced with capital and investment. Taxes should only be levyed to deal with the side effects of capitalism like the 5% unemployment problem which adds or subtracts from all of our income. Share the Risk, Reap the Profits. Sounds like good domestic policy to me.

Posted by: Henry Schlatman at August 19, 2004 01:30 AM
Comment #22123

Henry said, “David, how can you say people do not pay for freedom.”

Henry, please quote where I said freedom is not paid for? Please reread my statement: “Henry, there is no price tag that can be placed on freedom. If you ain’t got it, you would pay anything to get it, even your life in some cases.”

As you can see, I state that lives are paid for freedom in the last sentence. So, I fail to see the relevance of you question.

Posted by: David R. Remer at August 19, 2004 06:58 AM
Comment #22125

Henry said, “As far as taxes, you must not have to write a check to the IRS every three months.”

July 31 — Americans overwhelmingly support a new federal program to help senior citizens buy prescription drugs — and most say they’d be willing to pay higher taxes to fund it.
A poll taken by Zogby International finds that New Yorkers would be willing to pay additional tax dollars in order to support services directed toward abused and neglected children in foster care.

You may not want to pay taxes, but, the polls show most Americans are willing to pay taxes for worthy efforts and goals. Thus my statement “They pay taxes willingly (well, a majority, anyway)” is statistically supported. And I stand by it, with a host of such studies to support my claim. Your assumption about Americans based on your own mindset is a projection not born out by fact.

Posted by: David R. Remer at August 19, 2004 07:10 AM
Comment #22150

David, apologize for the misquote! However, like sheep the masses of our country have been subject to the idea of invisable payroll taxes for roughly 150 years. What else do they know?

Your main question asked about our national debt and is it an important vote. I hope by showing you and others that there is an option other than the current model of paying for our government through personal and corporate taxes. However, like I stated in my opening argument it will take a change in attitude, education, and control. Nevertheless, by adding and showing people that there is a smarter way for our government to meet its obligation to the debate. You force the left and the right to either change their stance or step aside like the Whigs and Federalist did in the early 1800’s.

Posted by: Henry Schlatman at August 19, 2004 11:08 AM
Comment #22182

David, perhaps another time we can get into the details of what policies benefitted workers, and which ones didn’t.

It’s telling, to me, when I look back over my data, that each of the two mainstream parties in the measurement period of 1900 thru 1980, fielded two very good Presidents (Roosevelt and Kennedy for the Democrats; Coolidge and Harding for the Republicans), and two very bad Presidents (Wilson and Carter for the Democrats; Hoover and Nixon for the Republicans).

What it tells me is that the ideology of “left or right” is not sufficient in itself to determine either success or failure in an economy, but it’s also important to understand how each must be APPLIED.

Wilson’s application of Progressive ideals was scatter-gunned and scatter-brained, unnecessarily destructive of industry, insufficiently geared toward rewarding positive behavior on the part of workers, and overall an egregious example of how not to “be Progressive”. Hoover’s application of “all free market, all the time” derailed into excessive deregulation of banks and the stock market, and without sufficient controls and boundaries to behavior, the stage was set for disaster.

The positive examples are even more intriguing though. In FDR we see an organization of Progressive ideals in a way intended not to destroy private industry, but revitalize it along with the prospect of workers. (And winning a war with a threat to the survival of humanity wasn’t bad either!) In Warren Harding we see JUST ENOUGH of a bridling of industry and banking to put boundaries where they need to be, but otherwise being reasonable and laissez-faire as to industrial opportunity within said boundaries. (Hence… the Roaring 20s.)

Perhaps this might resolve to boring agreement, or it may spark a new and enlightening exchange between us, but I’ll ask this: do you disagree or agree that FDR and JFK “did Progressive policy the right way” and that Coolidge and Harding “did Capitalist policy the right way”? And that Wilson and Carter “did Progressive policy the wrong way” and that Hoover and Nixon “did Capitalist policy the wrong way”?

Is there agreement, you think, or disagreement on the higher-level principle of there needing to be Progressive boundaries to the Capitalist fuel fires, and that the boundaries have to be the right boundaries, and the fires have to burn at the right temperature?

Posted by: Ciggy at August 19, 2004 05:45 PM
Comment #22185

Ciggy, goog point. The key to any economy is to keep a delicate balance currency, supply, and demand in balance. If one of these items are restricted or over blown the economy fails. The purpose of our government is to oversee and regulate this growth and to provide a direction/goal for the country. This vision of the administration is just as important to the masses becuase it gives them a sense of purpose.

Posted by: Henry Schlatman at August 19, 2004 06:33 PM
Comment #22199

Ciggy, I would have to research the President’s economic policies as assessed in retrospect before I could adequately discuss them specifically through comparison and contrast. Perhaps I will find the time do some research on it. If I do, I will bring it into another article. One thing for sure, this topic ain’t going away in my lifetime.

In general however, I believe from my own educational and current events experience regarding fiscal policy during my adult lifetime, that what made this nation great in the 20th century economically besides the obvious natural resource wealth and human capital wealth, was a balanced act between progressive policies which afforded a mass consuming class the discretionary income to stimulate demand, and savings sufficient to supply capitalistic free investment to grow supplies to meet those demands and to grow demand itself through advertising sophistication.

I think we are pretty much in agreement to this point if I am reading your comment above correctly.

Posted by: David R. Remer at August 19, 2004 09:30 PM
Comment #22207

I think we do agree on the more general principle.

For the minutiae, my research was two-dimensional but seemed to correlate well enough so I left it where it was. I personally think an economy depends on far more than just a president, though, and the nature and constitution of the business world itself has a lot to do with what will happen, at least as much as in any government administration.

For example, the dot-com bubble of the late 1990s: one can really neither credit Clinton with the rise of that bubble, nor convict him with its bursting into thin air. Activity in the private sector overspeculated in the prospect of technology in general, and the Adam Smithian “unseen hand” of the “free market” failed to filter out the pony-tailed losers who were blowing hot air at the venture capital firms. A big part of this, in turn, was because VC researchers tend not to be technically literate enough to understand all the balderdash being thrown at them by techie startups—who in the mid-90s were adept at making their little software widgets look like they had an extreme profit potential which (when you truly add up all the costs), didn’t have squat going for them.

Anyway, many factors like that have no governmental “hook” to them. It may be that in Coolidge’s time, it was simply business itself that was enlightened enough to pay workers a fair wage and not charge the worker/customer too much at the store; and it could be that while Wilson happened to be in office, business got greedier and more short-sighted. Or conversely, maybe in 1902 labor instinctively knew that what was good for business would also be good for them in terms of jobs and salaries and the affordability of products, so they knew when not to kill their economic strategic partner. And during Wilson’s administration, said labor might have lost sight of the fact that if they destroy private industry, they destroy their jobs and their livelihood and their standard of living.

Business is a symbiotic relationship between workers and capitalists, and a nation is a symbiotic relationship of business and government. Kill one and the other will die, even if there is a 70+ year lag time, as there was in Russia.

Rousseau, arguably the original modern Socialist, failed to grasp any of that, though. He was so wound up and twisted sideways in anger over the existence of private property, he saw its removal as the panacea to humanity’s problems. His negativity resonated into Marx’ polemic of the bourgeoisie, whereby Marx didn’t understand that today’s bourgeoisie was yesterday’s proletariat after putting away a portion of their salary and investing it wisely. He had the right goal (the weal of the working class) in mind, but had no understanding of the systems that would allow for attaining it.

Posted by: Ciggy at August 20, 2004 12:53 AM
Comment #22226

I can’t talk much about the econmy before 1970, but if you look at the econmic conditions, events, government actions or lack of, and public support you find where the market runs up and down based on the policies and actions or lack of by the president and the attitude of the market and people.

For example, President Clinton had an open attitude toward the market, let them battle it out, and realized that through the release of technolgy that the market would grow. However, he had to force Congress to balance the budget and finish stablizing the dollar. He also gave Americans two goals. In his first time he called on us to defeat the Y2K bug and in his second term he was relected on “Bidging a Bridge to the future for everyone”

Nevermind the mississippi river flooded, hurricanes rocked the east coast, or a number of other major events that cost this country money. Presiden Clinton seemed right on top of things. Even in 98 when the bull market was on the edge and it looked like the tech bubble was going to burst. What did Clinton do? Closed the markets, forced the margin call, and pumped in millions to restablize the factors.

Now, lets look at President Bush’s economy record. First his economic policy featured the trickle down theory which raised the standard of lending money. Even before he took office, he stated that the market was headed for a recession. What was wrong with a growing market. The fact was that over the last two years the market had grown in numbers, but not in value? Hence a problem was brewing and what was bush’s response. He called for back loaded tax cuts instead of dealing with businesses and investors and forcing them to close the gap on P&E’s as well as the 2500 points of margin calls that was on the books. Failure of President Bush to do anything and the interest of the bear market started to slow the economy down. In the spring of 2001, Californa found itself in financial and energy problems. Unable to get President Bush to assist them, the market slowed down again. Now turn to 9-10-01,the next day financial reports would tell the story. Is the economy growing? Well, after a two week delay the worst fears were answer. by slowing the economy down a little he turned the bull market into the bear market. Thats the problem with trickle down theory (but thats another debate)However, what happened to the market with the 9/11 and bad market news was that Bush once again failed to lead. His answer to the market and to the citizens. Go out and shop, We’ll protect you. It was officail the bears had won. The only thing that saved our economy from spiralling out of control when enron was found out was the attitude of the people of this nation. Since then Bush has kept out of the market affairs and the market stabilzed. Thats why the market is about the same as 2000 minus the bubble.
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Business is a symbiotic relationship between workers and capitalists, and a nation is a symbiotic relationship of business and government.
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I like that statement. The relationship of these groups are as important to the market as the presidents actions or lack of actions and the impact they have on human life and needs. Changing anyone of the many factors that make up the whole group and the market and economy will go up and down according to the reaction of the group being directly affected.

Posted by: Henry Schlatman at August 20, 2004 07:30 AM
Comment #22229

Ciggy, try adding consumers to labor and capitalist group and taxpayers(ie consumers) to business and government group. You still have the basic group fucntion, but the variables grow in numbers and complexity. Balancing them all is left to the invisable hand for no one can predict the future. Yet anyways!

Posted by: Henry Schlatman at August 20, 2004 07:50 AM
Comment #22340

Any consumers who are not a part of either labor or capitalists, would be considered “dead weight” in any system.

Posted by: Ciggy at August 21, 2004 12:08 PM
Comment #22369

Ciggy, your right, hence one of the major problems with our capitlist system. For years our government has known that the economy can only be maintained at a employment rate of 95% without having to take maesures to control the factors which cuase inflation, etc. This leaves about 5% of our population out of the loop. To combat the under growing market, our leaders introduced public assistance and unemployment to bring them into play. However, my personal opinion is that these programs don’t work because they instill the idea of something for nothing and will become the downfall of the right. You can see that evidence in their debate about taxes.

You said I sounded like a politican when I stated my agrument and I’ve taken a few days to reflect on it. And even though I do not seek public life I do think that my idea is right. For example, the 50% of Americans don’t vote because they do not believe the canidates; however, if the right person would run for office and state “Although I will not buy your vote if you elect me president than I will make all legal citizens of America a millionarie.” Sounds good, but wheres the proof? By every man, women, and child investing in our government for just $20.00/wk. at 7% (No problem for the market) over the next 50 years. America will have 15 trillion dollars (46 yrs rest of balance to interest)to build the schools, energy plants (Check out Grays Electromagnetic Engine through search), etc.

Question: How many votes have I just won?

Posted by: Henry Schlatman at August 22, 2004 04:28 AM
Comment #22385

Politically speaking, promising the impossible and having the Mindless Asses (contracted to “M’ASSES”) actually believe them, as they do Kerry today, is nothing new. Some have promised “a chicken in every pot”; some simply give emphasis to their bread and circuses social programs. Some pander directly to their form of old Roman Patronage.

A democracy gets the government it deserves, and increasingly, America has deserved less and less from its leaders. It’s in sharp decline, and we’re now in the midst of an election campaign which has all the signs of being “Alien Versus Predator”: whoever wins, we lose.

Posted by: Ciggy at August 22, 2004 01:53 PM
Comment #22412

Thats the problem in having an uneducated, uninformed public. Can we do anything about the predator? No, it’s the nature of the beast; however, by forcing the debate to change how the problems facing our nation are asked, we can start to raise above the BS. And although a third party has not rose that can challange the “Norm”, all you have to do is go back to the 1830-40’s to see how the top two political party’s lost to a self-learned backwoods man.

Changing the society attitude is not easy, but today’s chat rooms show that Americans have had enough BS. What will it take to change our economic system that allows only a hand full of men to collaberate to screw the people out of their money? If an administration can wipeout millions with a stroke of a pen (401k plans), could you imagine what al-Queda could do?

You are right about this years election of the candidates, for many years the American public has had to choose between the lesser of two evils. Yet, our country has somehow survived. As the public starts waking up to the fact that the Dems and Reps have no answers for are future. They will request/demand change. Who wins in the long run is the person that can carry the masses mindset.

Posted by: Henry Schlatman at August 23, 2004 12:41 AM
Comment #25588

Henry is correct about the uniformed public. It is going to take “we the people” to turn it around. I do not mean these tabloid radio talk show, whether liberal or conservative, they perpetuate the irrational.

My suggestion is to get as many people as possible behind the Libertarian Party and unseat one of the major parties. Either one, I do not have a preference.

Posted by: Bill Davis at September 16, 2004 06:52 PM