Canadian Health Care - Priceless?

Minimum $2,000 to guarantee that a woman's doctor will be there for the birth. And it can go up to $10,000.For general surgery, the cost runs between $5,000 to $7,000 to jump the wait list into the operating room, . . .

. . .knowing you are getting a qualified doctor in a timely manner. . . priceless. Carpe Diem has the lowdown on the superior, FREE Canadian single payer health care system.

Exit question, with all of the incentives to put private insurance out of business, how long before Americans are bribing doctors?

Obama Hits the Easy Button

Today the President announced a proposed pay freeze for Federal workers for the next two fiscal years. This was on my list of easy ways to cut spending immediately. Glad the President was paying attention. From my previous post:

Really easy spending cuts:

• End all stimulus spending. Return all unspent funds to the Treasury.
• End all TARP spending. Return all unspent funds to the Treasury.
• Freeze the pay of federal workers, since the CPI stayed flat last year, so too should have federal pay, but it went up. (Full disclosure, I work for the federal government.)
  
• De-Fund all of the committees, czars and regulatory boards for Obamacare.
• De-fund the Department of Education, for starters, since it doesn't educate anyone.

We presume that a majority of federal workers supported Obama, certainly their unions did. One of those unions immediately opposed the move, of course. Too bad, federal workers are supported by taxpayers who are also suffering, a pay freeze is unfortunately equitable under those circumstances.

Interestingly some Democrats didn't get the message from this month's election and are also opposing pay cuts.

Republicans welcomed the pay freeze but it drew silence from most top Democrats.
. . .
Representative Steny Hoyer, the No. 2 Democrat in the House, offered a lukewarm reaction to the pay freeze. Hoyer, whose Maryland district includes many federal workers, said he would "review closely President Obama's proposal.

At least they had the good sense not to directly oppose.

There are those who will say that this does not go far enough in controlling federal spending. I wholeheartedly agree; but it's a step.

About Those Social Issues

Leslie alerted me to a move by some Tea Partyers to take a turn towards social issues. I am somewhat of a social conservative, at a time when those issues are being forced to the back burner by the severity of the fiscal issues facing the country. The Tea Party has amassed an impressive coalition that has seized both the imagination of the country and many seats in state and national legislative bodies. However, those who believe that we should somehow turn to social issues, when the hard work of dealing with the fiscal crisis has not even begun are insane. Almost no progress has been made on the most pressing fiscal crisis our country has faced since the Great Depression. We cannot afford to lose any allies in this fight. Picking fights with gays, or any other group that is supporting our core issues is a costly waste.

Further, most of the issues that the Tea Party is emphasizing are consonant with the values of social conservatives. A less intrusive government that does not force politically correct values on the people would certainly help our cause. Consider these items.

• Obamacare is almost sure to expand federal subsidies for abortion. It was the only piece of legislation in at least the last decade to do so. By emphasizing opposition to Obamacare, not abortion per se, we bring along allies we would never have gained.


• The state insurance pools under Obamacare are almost certain to fund and subsidize insurance for same sex couples and increase the pressure on the states to recognize "gay marriage."


• As a general principle, the expansion of government crowds out deference to social norms, as government holds sway over an ever increasing portion of our lives. This crowds out the use of social norms that our reflect Judeo-Christian heritage as a means of regulating behavior. Consider pornography, which has many ill effects. We will never make progress in controlling it through purely legal means, we have centuries of experience on that front. But today, with increasing state intrusion into every aspect of our lives, down to how much salt we consume, the attitude among the young is "hey, it's not illegal or regulated, so it must be ok." We will have increasing difficulty making the case for traditional values in a society where the government is the arbiter of all decisions large and small.

The SoCal Tax Revolt Coalition (SCTRC) gets it right with the press release below. If you don't want to read it all, the money quote follows:

SCTRC wants balanced budgets, smarter spending, shrinking deficits, support for the free market, less intrusive regulations, lower taxes and fees, and transparency. Judson Phillips represents himself, not the thousands of unique, independent local tea party groups all across this nation, including our local one.

Click image to view, you may have to click again to enlarge.


Remember, "Government growth threatens our liberty and our prosperity." As Peggy Noonan put it, the Tea Party members know this, the hour is late. If we don't deal with the fiscal crisis all of our other issues will be mooted by the looming disaster.

Image at upper right courtesy of Temple of Mut.

Tunnel at the Border - Drugs are Big Business

Take a look at this video regarding the most recent tunnel under the border funneling drugs into this country. This the second tunnel discovered in the last few weeks.





Link here for another report.

The tunnel's length and sophistication presuppose considerable wealth and incentive to literally build an underground railroad into the United States. In a related note, hardly a day goes by that we don't see a news story about the horrors visited upon the Mexican people by the drug cartels. As many Arizonans will point out, this violence is spilling over into the United States.

I am sick of this, because the answer to this issue seems obvious to me. Drug legalization that would allow cultivation of marijuana on U.S. soil would go a long way to eliminating this violence and lawlessness, because the profits and the violence stem from the fact that this is a business operating outside of the rule of law.

Why should the Tea Party care?

• The drug trafficking is making the border more difficult to secure. Securing the border will be expensive and difficult; it needs to be done, but making the effort more so is hardly in our best interests. The same tunnels that move marijuana across the border can move illegals as well, but there isn't enough cash in the moving of people to make it worthwhile to build tunnels for that purpose alone.
  
• We are increasing the costs of law enforcement. First, we spend on interdicting the supply of drugs. Second, gangs on both sides of the border obtain large sums of cash to purchase weapons and fund other illegal activities.
• As a matter of principle, the drug laws are an excessive intrusion into the lives of consenting adults. I get that the use of currently banned drugs may not be a net positive for many people, but so what? So are cigarettes, alcohol and video games. We need to ratchet back the amount of control we allow any level of government to exert over our lives. If this isn't a core Tea Party principle, I don't know why I'm wearing that yellow flag on my shirt.
  

Weekend Music Chill

The California interior has been on my mind of late, not sure of all the reasons why, watching the movie "The Book of Eli" reminded me of it and the fact that its a good time of year to visit Joshua Tree does so as well. Gram Parsons is famously associated with the area, see the wikipedia article for more information.

Hauser's Law and the Deficit

Today's WSJ has more insight on Hauser's Law, on which I have previously posted. In summary, we have seen empirically over the last 80 years that regardless of top marginal tax rates, the federal government's tax receipts as a share of GDP always falls just short of 20%.



This evidence is important to consider when trying to reduce the deficit. It becomes clear that raising marginal tax rates will not increase federal tax revenue, so we shouldn't even try. Further, evidence from other countries is that the efficiency of the tax code matters to growth. The Tea Party should be supporting a simpler and fairer tax code, along the lines of the compromise that Reagan reached with Democrats in the 1980s.

Eliminating all manner of "tax breaks" for businesses and individuals will be part of the difficult work ahead. Special interests, and I include myself as a homeowner, enjoy these benefits. But if the structure were simpler, with lower rates, we would all be better off. Further, eliminating complexity in the tax code reduces corruption and the appearance of corruption as fewer interest groups have the ability to gain benefits through the code. A simpler tax code also directs resources based solely on economic benefit, not tax consideration. A simpler tax code also eliminates the waste of businesses time and money in trying to "game the system," freeing management time to focus on improving profits.

From Hauser's article on why higher marginal rates (which are always coupled with complexity) work against the economy:

Higher taxes discourage the "animal spirits" of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.

Tackling the deficit means reducing spending and increasing federal tax receipts. But we can only do so by growing the real economy. A simpler tax code with lower marginal rates is consistent with Tea Party principles of a less intrusive federal government. Further, the growth in tax revenues that such policies cause help reduce the deficit.

Happy Thanksgiving

Light blogging today as Mrs. Daddy and I prepared for Thanksgiving. Special props to our guest Jesse, who brought some Rolling Thunder IPA and Golden Glow Pale Ale from Central Coast Brewery in San Luis Obispo. A little music appropriate to the holiday follows:

Kim Jong Il - Pithy Analysis

Kim: "He looks pretty, but does he have game?"

Dean links to pithy analysis by Secular Apostate answering the question "Is Kim Jong Il Crazy?" The answer is a resounding NO.

The last three Administrations, Clinton, Bush, and Obama, have negotiated with the North Koreans as if the North Koreans were serious negotiators. In fact, the “incandescently intelligent” Barack Obama once said: “you do the game theory and calculate ways to contain”. “Do” the game theory, indeed. The natterings of a garrulous buffoon.

It reminded me of a WSJ article by Bret Stephens from a year ago regarding the aforementioned dictator:

But a tyrant’s training is no less useful for the manipulation of free men. What keeps an abused and subjugated people in line is the constant fear that things could suddenly get dramatically worse, along with the sporadic hope that things might also get marginally better. So long as most people feel they have much to lose and something to gain, you will have them in your power.

Ditto for your dealings with the outside world: The key is to keep them on the back foot, to furnish continuous evidence of what “dramatically worse” and “marginally better” look like, and to oscillate between the two in a way that always leaves a margin of doubt about your real intentions.

Regarding game theory, Kim is playing a weak hand adeptly, he keep making big bets because he knows that his adversary is extremely risk averse and unwilling to accept even small losses, so we keep folding our hand. Once again, Obama needs to sue his alma mater for failing to educate him; if he knew anything about game theory, he would also respond asymmetrically.

In fact, the U.S. could exert considerable pressure on Kim Jong Il. Much of his power comes from his ability to distribute small luxuries and favors to the party. These in turn are dependent upon foreign currency, which comes from counterfeiting, illicit sales of arms, and the drug trade. We have the means to crack down on these activities and also preventing the money laundering that then feeds the North the means to fly in lobsters to Kim's Siberian train to Moscow, for example. I have previously pointed out that we have employed such a strategy successfully.

Putting the squeeze will of course cause the North to ratchet up the saber rattling, but we can call Kim's bluff, because squeezing on these illegal activities is not a direct response to his provocations. Indeed, on the military front, we could appear to remain very passive, to keep the South Koreans from complaining. Why we don't employ this strategy is beyond me, but don't expect Obama to understand the game theory behind it.

I Think Not

This morning's Wall Street Journal headline said:

Feeling Blue: Aggressive Airport Screening Here to Stay

I repeat, I think not. This will end one way or another, the only question is how. The American people and even the employees of the TSA are not going to put up with aggressive groping forever. My worry is that it will end in tragedy. Public humiliation does strange things to people and is a sure fire way to get the adrenaline flowing. I am worried. This is another reason why I posted yesterday on a non-violent means to protest these procedures. If people sing in line, it could help them handle the emotional response to the abuse, and make them feel less powerless. More importantly, it well help heap ridicule on our government's over reach. Ultimately, I would like to see this procedure end because our political leaders feel to embarrassed to allow it to continue.

From yesterday's comments, here are some more suggestions for singing in line.

From Temple of Mut: James Cagney singing Yankee Doodle Dandy (embed not available).

W.C. suggests whistling, a la "Bridge over the River Kwai."



And one more I thought of:

More Love for Local Tea Party Activism

Tea Partyers, there is a must read in today's WSJ about Tea Party activists setting their sights on local issues. We already had some local success in San Diego with the defeat of Propositions A and J, the half-cent sales tax increase and parcel tax increase, respectively. The article makes an important point about the need to grow bench strength of local school board members and other locally elected officials to give the Tea Party future leaders. It also points out that our influence can often be even greater at the local level. A few key quotes:

Tea-party groups in Pennsylvania, Delaware and Michigan have recently voiced plans to have members run for local town boards in 2011—a bid to start a farm team of politicians who can move up to higher offices. . . . Now, the Philadelphia Tea Party Patriots plan to launch the "Watchman Project," in which members will be assigned to attend local government meetings, monitor meeting minutes and then report back to the group, Mr. Reimer said. "If there is a particular vote coming up that we support or oppose, we would all show up to influence what is going on," he said.

Locally in San Diego, Dawn, Leslie and Sarah have been very active in keeping us appraised of political developments, but it will take more of us monitoring city council meetings, school board meetings to keep the politicians honest.

Photo courtesy of LeftCoastRebel.

Protesting the TSA in Song and Verse

I have been conflicted as to how to protest the abuse of average Americans at the hands of the TSA at our nation's airports, but at the same time, I am a firm believer in the rule of law. Shane rightfully points out that the search procedures may very well be unconstitutional, but absent a court order, that doesn't help your average citizen. I don't want to ask people to suffer $10 grand fines. Dean also points out that the TSA agents are none too happy themselves with the position they are put in. To quote extensively from BWD, quoting TSA employees at TechDirt:

"Molester, pervert, disgusting, an embarrassment, creep. These are all words I have heard today at work describing me, said in my presence as I patted passengers down. These comments are painful and demoralizing, one day is bad enough, but I have to come back tomorrow, the next day and the day after that to keep hearing these comments. If something doesn’t change in the next two weeks I don’t know how much longer I can withstand this taunting. I go home and I cry. I am serving my country, I should not have to go home and cry after a day of honorably serving my country."

My fellow Americans, what is to be done? Stay ungovernable my friends, but within the bounds of law and respect for our fellow Americans. Here is my suggestion. Sing. That's right, we need to sing loudly and long while in line. It will disrupt the ambiance of submission, but is itself not unlawful. Maybe we could start with the pledge of allegiance, to remind our fellow citizens, employees of the TSA, of their duties under the constitution. As a federal employee I know I took this oath.


We could then go with patriotic and traditional songs while while waiting in line. Imagine, the power of showing our government that we are not submitting willingly. There is no law against this action of singing and reciting, but it would show our solidarity against this intrusion into our privates and private lives.

I offer some YouTube clips of suggested material for traveler's consideration to say/sing while waiting for their share of abuse at the hands of our government. (Just a reminder: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it. . .")




We might want to raise our voices when we say "liberty and justice for all."




And to get our left of center friends on board, because at the end of the day, they love freedom too, here is a little reminder that the President promised something different than whole body groping at his inaugural.



Since we are marching in a long line:



Because we need His help now more than ever, because our greatest adversary has become our own government:



Maybe a stretch, but the 23rd Psalm comes to mind, considering the valley of the shadow of death, but is probably too religious.

I hope others consider this a worthy idea. Don't know if I personally will have the opportunity to put this into practice, but I want to hear your thoughts on improving this form of protest.

Another Small Step - 401(k) for San Diego City Employees

Apparently the defeat of Proposition D has concentrated the minds of local politicians. Mayor Sanders announced a plan to put new workers into defined contribution plans yesterday. Labor leaders were of course skeptical, but made one comment with which I can agree.

Lorena Gonzalez, head of the San Diego-Imperial Counties Labor Council, said ending pensions for new hires does nothing to solve the city’s current budget crisis. . .

But you have to start reforms somewhere. Further, by changing to a defined contribution plan, the city will stabilize its future costs for pensions. Changes in market conditions won't cause changes to the city's required funding profile. Defined contribution shifts the risks to the employees, which is why the labor unions oppose. However, I am very happy to be in a defined contribution plan at my work. I think it will actually provide far better returns than the defined benefits portion of my plan, so I don't understand why labor leaders oppose it.

Carl DeMaio also pointed out that the plan does not really solve the current pension crisis.

Another Proposition D critic, Councilman Carl DeMaio, said the mayor’s plan is a good first step but doesn’t go far enough. He has proposed ballot measures that would cap the city’s labor costs and freeze salaries to control pension expenses.

“The bandwidth in the public will gravitate toward the plan that actually solves the problem,” DeMaio said. “I’m supportive of the 401(k) for new hires. It’s just that it’s not complete. It falls short of what the city needs ... You have to do a lot more.”

But the momentum is shifting in the debate over pensions and budget woes. It is becoming widely accepted that most of the problems we face with government deficits must be solved through spending cuts, however they are achieved.

The mission of the Tea Party is to hold our politicians' feet to the fire and push for real reform and budget cuts.

So Far, So Good

The New York Times is reporting/pillorying Republicans for obstructing Democrat legislative initiatives in the lame duck session.

In the House, Republicans united to defeat an initial attempt to extend unemployment pay for the long-term unemployed. In the Senate, Republicans used procedural tactics to force the Democrats to consume much of the week inching ahead on an otherwise popular measure to improve the food safety system. The Republican leaders of the Senate and House canceled a tentatively scheduled postelection meeting at the White House with Mr. Obama, a move Democrats viewed as a slight.

Characterizing S510 as popular is like calling high tariffs on sugar cane popular, no one is opposed because so few are aware of the issue.

Good for the Republicans for pushing any major changes into the new year. Exit question, should the Republicans let the Bush tax cuts expire if they can't get a decent compromise with Democrats? The pro is that they will be in a better negotiating position after the new year, the con is that the withholding tax for many Americans will go up until they pass a bill.

Along with the Senate GOP resolution to end earmarks, this is a good start.

A Small Consolation

. . . arising out of Big Sis' whole "grope or porn" dilemma is that all around tool and faux populist Jesse Ventura has announced he will not be flying commercial any more.

. . . the former governor of Minnesota and host of the popular TruTV show, Conspiracy Theory with Jesse Ventura, announced he will no longer use commercial airlines due to the egregious abuses of the TSA and the government. Ventura said he made the decision to avoid public aircraft after he found himself becoming too comfortable with being routinely searched.

Does that mean we won't be hearing more trutherisms on the ironically titled TruTv (TurdTV)? Since Jesse used to work for the government as a member of the Navy and then as governor of MN, doesn't he see how he should actually be the number one dude subject to all manner of intrusion search?

I don't have time to be groped.

Weekend Music Chill

From one of my favorite albums of all time, this weekend we are playing U2 performing "One" from the Achtung Baby album in 1991. This album got played over and over again on the final patrol of one of the "41 for freedom" boats, but it still wears well. After listening to the song's bittersweet lyrics and it's title, I can't help but thinking about Obama's fall from role of savior to just another crazy politician.

Fed Indirectly Subsidizing California Debt

Newest BFFs.

In a recent post, KT opined that the Fed's Quantitative Easing would result in California "skipping out on our test" because the Fed could buy up California bonds as easily as U.S. Treasuries. (Go to the comments to see the full discussion.) However, the Fed's purchase of U.S. Treasury bonds is already having an indirect subsidy effect on California bonds. From the WSJ's Meredith Whitney:

Over 20% of California's debt issuance during 2009 and over 30% of its debt issuance in 2010 to date has been subsidized by the federal government in a program known as Build America Bonds. Under the program, the U.S. Treasury covers 35% of the interest paid by the bonds. Arguably, without this program the interest cost of bonds for some states would have reached prohibitive levels. . .
Over the years, however, federal government transfers have subsidized business-as-usual state spending not covered by state tax collections. Today, more than 28% of state funding comes from federal government transfers, the highest contribution on record.

The Fed is printing money to temporarily keep interests rate down and buying the U.S. debt, this money is then transferred into the Treasury which a. subsidizes California debt and b. pays for direct subsidies from the federal government to the states.

We have slowly dismantled the federal system, to our detriment. The bad acting by New York and California is being paid for by all of the states. Hopefully the new Republican majority in the House of Representatives, with scant members from CA or NY will put the brakes on these subsidies as part of the effort to clean the federal deficit. Maybe those of you reading this column from outside my state could put some pressure on your Congressman to end the transfers. After all, our bad behavior is just contaminating the nation.

Quote of the Week - "Don't Touch My Junk"

Charles Krauthammer points out the larger meaning of "don't touch my junk" in today's column:

Don't touch my junk is the anthem of the modern man, the Tea Party patriot, the late-life libertarian, the midterm election voter. Don't touch my junk, Obamacare - get out of my doctor's examining room, I'm wearing a paper-thin gown slit down the back. Don't touch my junk, Google - Street View is cool, but get off my street. Don't touch my junk, you airport security goon - my package belongs to no one but me, and do you really think I'm a Nigerian nut job preparing for my 72-virgin orgy by blowing my johnson to kingdom come?

Indeed. Stay ungovernable my friends.

I Felt Proud That I Did My Part

Nancy Pelosi thanks all of us in the Daily Kos community for our support.

I felt like I was there. I repeat my note of encouragement.

Acting Surprised - Taxpayers not Getting Paid Back on Auto Bailout

From today's WSJ:

U.S. taxpayers are about $10 billion in the red on their General Motors Co. investment after Wednesday's initial public offering. Whether the Treasury can ultimately break even will depend on how GM shares perform over the next few years.

Remember this from Obama only last July?

"You now have all those U.S. auto companies showing a profit. They've rehired 55,000 workers. We are going to get all the money back that we invested in those car companies," Obama said in the interview.

Skip ahead to 4:45 to see the relevant pack of obfuscations.
By the way, there is no way of knowing how many of those workers would now be at Ford, Honda, Toyota, etc. without the bailout, in addition to the fact that the taxpayers are still losing money on the deal.

Stopping Food Smuggling?

Although not an issue that I have followed closely, the Senate passed a cloture vote on the Orwellian named Food Safety Modernization Act. This bill empowers the government to enforce the will of big agribiz by shutting down local food growers, and even your vegetable garden, all in the name of food safety. I am not a big fan of the locally grown food movement, but who cares? It is the right of the people to engage in the kind of commerce they choose as best. If someone thinks that locally, organically grown food is the best way to eat healthy and save the planet, and they are willing to put their money where their opinion is, more power to them. This is what the public has been clamoring for, vast new government bureaucracy to control how we plant seeds.

Whoa? Where does it talk about seeds? From the Food Freedom blog:

(c) Regulations . . .Secretary of Agriculture andrepresentatives of State departments of agriculture, shall promulgate regulations to establish science-based minimum standards for the safe production of food by food production facilities. Such regulations shall–

(3) include with respect to growing, harvesting, sorting,and storage operations, minimum standards related to fertizer use, nutrients, hygiene, packaging, temperature controls, animal encroachment… and water;

1. there is a small list inside the FDA called “sources of seed contamination” and

2. the FDA has now defined “seed” as food,

3. so seeds can now be controlled through “food safety.”

Further, this bill has been defended because of the epidemic of food smuggling that is now plaguing the United States. What's that, never heard of that problem? From the linked article, here is the largest ever case ever case of food smuggling:

Is food smuggling a problem in the United States? Well, the “biggest food smuggling case in the history of the U.S.” busted wide open in September. Eleven Chinese and German executives were indicted for bringing in $40 million worth of commercial grade honey over a five year period, reportedly to avoid paying $80 million in import fees. (No wonder they tried smuggling.)

H/T to Sarah Bond.

A Small Victory

Oh my. It just shows you what a little moral persuasion can do.

In a swift victory for tea-party activists, the Senate's top Republican agreed Monday to a plan to ban GOP members from proposing earmarks for spending bills, suggesting that what was once a core part of legislating has now become politically unacceptable.
. . .
Mr. McConnell was a leading defender until Monday, creating tensions within the party and in particular with Sen. Jim DeMint (R., S.C.), a big figure in the tea party. But in his first speech on the Senate floor since the election, Mr. McConnell capitulated.

Now this is in fact a small, but symbolic victory. I have always felt that earmarks were "the gateway drug" to Congressional wasteful spending. This is only a rule that governs Senate Republicans, but it gives them a moral advantage over the Democrats in the Senate. Further, it shows that the Republican establishment can be made to listen. Until Monday, McConnell had been opposed to ending earmarks, but he realized that in these times, it was important to listen to the voters. More from McConnell in the WSJ article:

" . . . But there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the waste and the out-of-control spending that every Republican in Washington is determined to fight."

Analysis from the author of the article Naftali Bendavid:

Mr. McConnell's move was in part an attempt to shift the focus from divisions among Republicans on a contentious issue to distinctions between Democrats and the GOP. House Republicans also ban earmarks, but Senate Democrats have no earmark ban, and House Democrats have a limited one.

It is a sad commentary that shutting down the kind of spending depicted below, which quickly works it's way into the billions, will only be a drop in the bucket of necessary cuts.

Dana Milbank Has a Point

. . .For a change. Actually, he is one of the few left of center commentators that I occasionally enjoy, not always, but enough. The point he makes concerns the Deficit Commission.

Not yet two weeks after the voters delivered a clarion cry for change in Washington, we're already back to business as usual.

Millbank goes on to slay right and left for the mindless opposition to the Deficit Commission's recommendations. But on the right, it seems that only Grover Norquist, for whom I once had a great deal of respect, is bad mouthing the initial recommendations. He rightly pillories Pelosi, the AFL-CIO, and NOW on the left. He applauds Obama's early support:

Triangulation?

The questions are whether Obama is willing to stand up to Pelosi and whether he can weather the consequences of triangulating against the liberals. So far, so good. "Before anybody starts shooting down proposals, I think we need to listen," he said from Seoul, in an implicit rebuke of Pelosi. He also said that he's "prepared to make some tough decisions" and that "we're going to have to take actions that are difficult and we're going to have to tell the truth to the American people."

Unfortunately, Obama's track record is that he will cave to his base. But wouldn't it be ironic if he saved his Presidency with an about-face that embraced fiscal responsibility. And as Tea Partiers, would we support such a move by Obama? Would we push to get an omnibus spending reduction bill passed that he was pushing? Or would we follow Mitch McConnell's advice and do anything in our power to deny him re-election?

Solving the Deficit Crisis

In my previous post on this subject, I tried to give a sense of how vast and difficult solving our deficit problem has become. To recap, even with draconian measures, closing the gap to 2.2% of GDP is the best that the co-chairs of the deficit commission can come up with. Putting it into family budget terms, it is like having a family income of $100,000, spending $150,000 and funding the difference with a line of credit on which you already owe $575,000. Except it's even worse, because that only includes the debt that is admitted to, other unfunded liabilities might put your future liabilities closer to $4,500,000.

Clearly drastic action is needed, but it will not be enough. As the graph below shows, the gap is monstrous. What is to be done?

It seems obvious to me that trying to increase tax receipts by raising the tax rate that each individual pays is self defeating. This is because those taxes become a drag on economic growth, and because people are incredibly ingenious at avoiding them. KT has often blogged on the need to avoid debt in financing the government, and I agree. But that need not imply that raising marginal tax rates is a particularly good way of doing so. Further, we have seen an historical trend where federal income tax receipts have been unable to break the 20% of GDP barrier, regardless of the marginal rate structure. I previously discussed Hauer's Law last June and why increased tax rates are useless.



But the need for additional receipts can not be denied. This is why I believe that aggressive action is needed to grow the economy and the work force. Lest the reader think that I am suggesting that growth alone will pull us out of this crisis, I am not. The recommendations of the deficit commission co-chairs or something like them will also be needed. The problem has grown so large that growth alone won't solve it. But it is also so large that it is unlikely that the cuts proposed will not solve it either.

In broad brush, the federal budget requires many more people to contribute to receipts. That means that work force participation must rise dramatically from where it is today. By work force participation, we must mean in the legitimate work force, because that is what generates the revenue. Getting Americans back to work is key, but so is increasing the total size of the work force. Look at this graph from economicpopulist.org


We are on a scary trend line that is causing federal receipts to fall. Is part of the trend demographic? In other words, is an aging U.S population causing the labor force participation rate to fall? Since those 65 and over have only a 15% chance of being employed, this sound plausible.

It seems likely that the only way to bring in new receipts to the federal government to close the deficit is to bring participants into the work force. Where should they come from?

The Unemployed. This is the most pressing need. The official unemployment rate is at 9.6%, but this vastly understates how bad the problem is. economicpopulist.org says it best:

U6, defined as total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force, (table A.15), was 17.0%, a -0.1% decrease from last month. This number is obscene.

Getting these people back to work has to be the most important task. However, as Sharon Angle pointed out, government can not directly create the needed jobs, but has to get out of the way. Government can promote business by the consistent application of the rule of law and protection of property rights. Here are some things to aid in job creation.

• Uncertainty over the effects of Obamacare and other new regulation. A moratorium on new regulation for at least four years is needed.
• The housing market was not allowed to hit bottom. Only when prices are low enough to attract investors will new money pour into the market. I have seen this locally, where prices are not low enough for me to want to invest. Prices are still sitting at well over 20 times rent. Bust up Freddie and Fannie and let housing prices fall. With new investors in the market, then home improvement will start helping the economy.
  
• Stop rattling the markets with inflation fears through quantitative easing. I don't agree with the abolish the fed movement, but if they keep this up, I might change my mind. The fed should be most interested in a stable money supply, which will help businesses plan. Drudge links to a supposedly secret Walmart study that inflation is already here.
  
• Simplify the tax code or better yet, abolish the income tax and replace it with a value added tax (having both is unacceptable, however.) The efficiency of the tax code is relevant to economic growth, because it allows people and business to plan their economic activity in a non-distorted manner. Further, the more complex the tax code the more chicanery and bribery accrue to those getting the tax breaks. It is no coincidence that Reagan and Rostenkowski's success in simplifying the tax code and reducing rates resulted in one of the great uninterrupted economic expansions since World War II.
• Repeal Obamacare since it is responsible for both new complexity in the tax code and absurd amount of new regulation.
  

Those over 65 currently not working. It may seem cruel, and I am not advocating using force, but many of those over 65 are still able to work. Note the trends in this graph:


Labor force participation is already on the rise for those over 65. We need to look at policies that discourage that trend. For example, we tax social security benefits based on earnings of those already receiving social security. This discourages work by the elderly. Wouldn't we be better off if they were working. Raising the retirement age is a good idea, but will take significant time before that has any impact.

Immigrants. Here is the sticky wicket. First, illegal immigrants mostly participate in the labor force, however, only two-thirds of them pay social security taxes according to the only source I could find on this subject. While the article was emphasizing the two-thirds who do pay, I am concerned about adding 4-5 million people to the roles who do not.

But right now, we can't solve this problem, because we will undermine the rule of law through an amnesty. The American people deserve a secure border. But the secure border can also allow us to have the discussion needed about the role of immigrants. Those who are here illegally should not be granted citizenship, that would reward their illegal behavior, but we need to get them to all pay their share of social security taxes.

Further, a discussion of legal immigration is also needed. To help prevent the outsourcing of jobs and to increase the ratio of those paying social security taxes to those receiving, we need a massive influx of new immigrants with salable skills. The H-1B visa program has been a joke for a long time, more a lottery than a policy. I would like to see us bringing 5 million new young, skilled immigrants per year to jump start the economy. That will make a significant dent in the deficit gap and also create more jobs in America. This country still provides the greatest opportunity for upward mobility in the world. Attracting skilled immigrants should not be a problem.

I have put out a lot of opinion that is sure to be controversial. But we Tea Partiers said that we were serious about tackling the deficit. The problem is massive and challenging. Cuts alone won't do it. Cuts and tax hikes won't solve the problem. Time to think out of the box and create some growth.

A Reason to Like the Deficit Commission

. . . Or the National Commission on Fiscal Responsibility and Reform as it is formally known, Paul Krugman hates it. From today's New York Times article:

Count me among those who always believed that President Obama made a big mistake when he created the National Commission on Fiscal Responsibility and Reform — a supposedly bipartisan panel charged with coming up with solutions to the nation’s long-run fiscal problems. It seemed obvious, as soon as the commission’s membership was announced, that “bipartisanship” would mean what it so often does in Washington: a compromise between the center-right and the hard-right.

Even if I don't agree with everything Bowles and Simpson have proposed, they are certainly making the right enemies. Adding Paul Krugman to a list that includes Nancy Pelosi is certainly a major achievement.

Weekend Music Chill

This weekend's music is inspired by my consideration of the mess that our federal deficit has become. A day of reckoning is a recurring theme in many religions and certainly inspired this traditional spiritual. This is a powerful rendition of "Sinnerman" by Nina Simone.

Debt and Deficit - Leaks from the Panel

"Depend upon it, Sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully," or so says Samuel Johnson. Doing some reading about the math surrounding the Federal debt has done the same for me. First a little from the "Debt Commission." The leaders have leaked some of their recommendations, and they are challenging. But despite the immediate negative reaction and the sweeping nature of the proposals, they don't fully close the gap, the federal deficit would still be 2.2% of GDP in 2015.

Before I get into the details released by the commission's co-chairs Erskine Bowles and Alan Simpson, we should review the magnitude of the problem. KT recommended an article on Monty Pelerin's World that gives a sense of the magnitude of our debt problem:

If the Government confiscated everything, the social programs would still be $50 trillion short and the Government would still be bankrupt. Furthermore, no company or individual would be left with anything.
. . . The Federal Government has nothing left from their “gross pay.” Their “living expenses” actually exceeded their gross pay by $1.2 trillion last fiscal year. That is, they spent almost 50% more than they made. Comparable behavior is budgeted for the next ten years. . .The Federal Government is in what is known as a Debt Death Spiral. They are unable to pay the actual and implied interest on their debt. Hence, the unpaid balance is added back to the amount owed, making the problem worse next year.

The raw numbers are very bad. Federal spending for the last fiscal year was estimated at $3.55 trillion and federal receipts at $2.38 trillion, leaving a deficit of $1.17 trillion. Relating it to your family budget, this is like having a family income of $100,000, spending $150,000 and funding the difference with a line of credit on which you already owe $575,000. Except it's even worse, because that only includes the debt that is admitted to, according to the linked article above, the real value would be closer to $4,500,000, however, I am unable to independently confirm that figure.

Some pictures:

2010 Federal Outlays, Estimated.

Here's a summary of the $3.8 trillion in deficit reduction measures proposed by the leaders.

• Gradually raise social security retirement age.
• Various cuts in social security benefits.
• More taxes on wealthier incomes (presumably for social security).
• $410 billion in various discretionary spending cuts.
• Earmarks - $16 billion.
• Cut the federal work force by 10%.
• $100 billion in Defense spending cuts.

Already the commission catching grief from right and left. Both Grover Norquist and Nancy Pelosi have criticized the preliminary recommendations. The full commission seems unlikely to vote for these recommendations. As you can see from the graphic above, there are few easy answers. I don't like all of the recommendations either, but it's time to get serious.

Assuming for a moment that all the recommendations were implemented, it still leaves the country with a huge overhang of debt that is only continuing to grow. Apparently, there is no combination of spending cuts and tax increases politically acceptable enough to solve this crisis.

Exit question: What's to be done?

Strangely enough, I think part of the answer lies in solving the immigration problem. More on that in another article.

At Least They Didn't Call It a Promise

. . . or the acronym would be too revealing. California is launching $14 billion in bond sales called "revenue anticipation notes," supposedly funded by future revenues from the businesses now fleeing the Golden State. Calling the bonds "California Revenue Anticipation Promises" seems more appropriate. From the LA Times:

The budget deal of Oct. 8 already looks out of date: The state’s chief fiscal analyst on Wednesday estimated that Sacramento will have to plug a total of $25.4 billion in deficits by mid-2012.

That may make some bond investors nervous, but many have gotten used to scary fiscal headlines about California for the last decade. The recurring budget mess hasn’t affected the state’s ability to make interest or principal payments on its debt, and Treasurer Bill Lockyer has repeatedly reminded Wall Street that the state Constitution mandates that bond investors must be paid.

(The same can’t be said for vendors and other creditors who once again this year were stiffed by the state until a budget was in hand, 100 days late.)

I am amazed that credit rating agencies have given the bonds their highest ratings, when the link in the article points out that the budget deal is already coming unraveled.

KT has more here on the last progressive who will hold high office, Jerry Brown.

Veteran's Day

Hope you are enjoying Veteran's Day, whether or not you have it off. Dean has a great post that I cannot equal, please give it a read. Since I am a veteran myself, it seems a little self-serving to spend much time on the subject, so have a great day.

I'll be thinking about the debt, deficits and printing money.

Support Nancy Pelosi

In an earlier post, I opined that God would be showing his goodness to conservatives if he allowed Nancy Pelosi to win the minority leadership position in the next Congress. Now you have the chance to assist The Almighty. Mosey on over to DailyKos and sign the petition to support Nancy's bid for Minority Leader. You can even leave a personal message thanking her for her leadership and the 60+ new Republican members of the House of Representatives.

I have a screen capture of my input:

Unintended Irony.

The Politicization of Science Under ()

Remember when the left told us that if we voted for McCain we would see the continued undermining of science for political ends? Well, I voted for McCain and look what happened.

From Breitbart:

Academics, environmentalists and federal investigators have accused the administration since the April spill of downplaying scientific findings, misrepresenting data and most recently misconstruing the opinions of experts it solicited.

Meanwhile, the owner of the rig that exploded in the Gulf of Mexico, Transocean Ltd., is renewing its argument that federal investigators are in danger of allowing the blowout preventer, a key piece of evidence, to corrode as it awaits forensic analysis. Testing had not begun as of last week, the company says, some two months after it was raised from the seafloor.

It seems that ignoring science, engineering and economics is a bipartisan sport.

Meanwhile Louisiana sends a delegation of six Republicans and only one Democrat to the House of Representatives. (Check Huey Long's grave for rotation.) Meanwhile, Republican David Vitter, won re-election to the Senate with a whopping 57% majority despite being linked to a D.C. call girl scandal. From the Tri-Parish Times:

Vitter's problems amounted to more than a blot. He was the "serious sin" senator, linked by phone records to a call girl business run by Washington's "D.C. Madam," Deborah Palfrey.

No matter. He won 57 percent of the vote to Melancon's 38 percent, after successfully tying Melancon to every Obama policy unpopular with Louisiana voters - except in Richmond's 2nd District.

Obama's handling of the BP Oil Spill continues to haunt him.

Over and over on DailyKos, during the run up to the 2008 elections, I kept reading how Democrats were the party that was "competent" to run the federal government. Hope lefties are enjoying this particular crap sandwich.

Happy Birthday to the Marine Corps

Tomorrow is the 235th birthday of the Marine Corps. I have a brief story about the Marines at my other blog.

Biggest Loser? Net Neutrality

L. Gordon Crovitz reports in today's WSJ "that 95 candidates for Congress had signed a pledge to support 'net neutrality.' The candidates promised: 'In Congress, I'll fight to protect Net Neutrality for the entire Internet—wired and wireless—and make sure big corporations aren't allowed to take control of free speech online.'" In the last election cycle every one of those candidates lost.

Crovitz doesn't analyze why all 95 candidates lost, but I have my suspicions. "Net neutrality" is one of those shibboleths of the left about which you see impassioned discussions on DailyKos and MyDD. The only candidates who would sign such a pledge are far lefties who felt it necessary to pay homage to nutroots nation. To say this wasn't their year is an understatement.

On the issue itself, I have a hard time getting incensed one way or another, even though I find the idea of the FCC regulating the internet to be a bad one. But the the major cable companies made this particular bed for themselves by lobbying local governments for monopoly status. Amazingly enough, the issue isn't that big in Europe. Why?

Indeed, there is little discussion of net neutrality in Europe or Asia, where there is real competition among broadband providers. U.S. politicians and regulators would be better off focusing on ways to increase competition on the Internet—not looking for new ways to regulate it.

IJ Explains Why Chuck Can't Start a Business

H/T to Carpe Diem:



This is why we need Tea Party candidates on city councils, not just in the Senate.

Darrell Issa

One of the things I am happy about from this November's results is Darrell Issa's impending chairmanship of the House Government Oversight Committee. Listen to him on MSNBC, and note the almost palpable fear they have over what his next move will be.



I think that making Fannie, Freddie and Countrywide targets has a nice bipartisan ring that also looks into some of the causes of the current economic recession. I also like some of the other areas of emphasis like how the whole "jobs created or saved" are scored. He is also calling for giving Agency Inspector Generals subpoena authority (note how many times in the linked articles the IGs are finding executive agency wrongdoing.) He mentioned food safety a couple times, but that is one issue where I don't know where he is going. I also really like investigating nonsensical government regulations that are preventing businesses from hiring.

At Mount Soledad Yesterday

Yesterday at noon, the Mount Soledad Memorial Association unveiled the plaque pictured above to honor Petty Officer 2nd Class Michael A. Monsoor. He was posthumously awarded the Congressional Medal of Honor for his actions in Operation Iraqi Freedom that cost him his life on September 29, 2006. Please read the Summary of Action that describes the events of that day. I quote a few excerpts here:

. . . he [Monsoor] served as automatic weapons gunner in a combined SEAL and Iraqi Army (IA) sniper overwatch element positioned on a residential rooftop in a violent sector and historical stronghold for insurgents. . . . After the engagements, the local populace blocked off the roads in the area with rocks to keep civilians away and to warn insurgents of the presence of his Coalition sniper element. Additionally, a nearby mosque called insurgents to arms to fight Coalition Forces. . . .
Though well-acquainted with enemy tactics in Ar Ramadi, and keenly aware that the enemy would continue to attack, the SEALs remained on the battlefield in order to carry out the mission of guarding the western flank of the main effort. . . .
He immediately leapt to his feet and yelled “grenade” to alert his teammates of impending danger, but they could not evacuate the sniper hide-sight in time to escape harm. Without hesitation and showing no regard for his own life, he threw himself onto the grenade, smothering it to protect his teammates who were lying in close proximity.

A couple of points. First, this is an amazing nation that continues to raise up men such as Michael Monsoor, who go to fight and sometimes die in distant s***-holes like Iraq in the service of their country, freeing a people, many of whom would have been just as happy to continue their lives under a brutal dictatorship. [Note the population aiding the enemy and imams using mosques to call people to arms.]
My second point is that the decision to go to war must always be weighed with deep skepticism. Reading the summary of action gives a small sense of the horror of the war. I am not arguing that this war was a mistake, only that we should count the cost very carefully. This is why we don't go to war to right every injustice throughout the world. We need to truly believe that our national interest is at stake ahead of time.

Our condolences go out to Michael Monsoor's family, his mother, father, his sister and two brothers. Besides being a hero on the battlefield, he was, by all accounts a decent friend and family member.

Ganar a los hispanos

Se ha informado ampliamente que la victoria, Harry Reid, se debió en gran medida a la alta participación de votantes hispanos que fue del 90% Demócrata. Incluso si eso es una exageración, que los hispanos parecen favorecer a los demócratas en el oeste es un impedimento a los Republicanos cada vez que tiene una oportunidad en California.

Mi compañero blogger, Sarah Bond, ha dicho que tenemos que llegar a los hispanos y estoy de acuerdo. Pero tenemos que conseguir la frontera de hecho garantizado como requisito previo. Esto puede parecer contra-intuitivo, pero al hacerlo toma el tema de lucha contra la ilegal fuera de la mesa. Pero si la frontera fueron asegurados en realidad, nos podría llevar la lucha por una reforma justa y comprensiva de la inmigración. Esto demostraría la carga de racismo que es falsa. Los hispanos, que no parecen particularmente enamorados de las posiciones de Demócrata sobre el aborto, el matrimonio homosexual y cargar a las pequeñas empresas se trasladarían a los Republicanos en número suficiente para destruir totalmente la coalición Demócrata.

La reforma integral es necesaria, la falta de entrega si lo hacemos asegurar la frontera sería un gran error, pero para alcanzar la frontera es el pago necesario por ganar la confianza del público.

Este artículo fue reproducido en un post anterior como un experimento después de discutir alcance a los hispanos con Sarah Bond y Eastman amanece sobre martinis esta noche. Estoy interesado en los comentarios sobre la calidad de la traducción.

Note for my mostly English speaking audience:
This article was reproduced from an earlier post as an experiment after discussing outreach to Hispanics with Sarah Bond and Dawn Eastman over martinis this evening. I am interested in comments on the quality of the translation.

On Olbermann

I never really paid "no never mind" to Keith Olbermann, but his suspension by MSNBC seems disingenuous. I am in fact disheartened by this. Yes, he was a total toad, often unprofessional and very divisive. Suspend or fire him for those offenses, or better yet, his ratings. But to make some excuse about political donations? I am with Bill Kristol on this. It is much like the firing of Juan Williams from NPR, the stated reason does not match the real reason. Both firings were lame. Kristol is right, and I add that if we wish to be consistent, we should support Olbermann.

To be clear, I don't think this is a "first amendment" issue. Olbermann has no right to have MSNBC provide him a platform. It just seems that reasonable corporate governance on their part would cause them to have reasonable policies on donations and tell the truth about their actions. Calling them for their hypocrisy is clearly an All-American past time.