The Right is Wrong and the Left is Not Right, Part 2

It seems hard to believe that a few of you haven’t decided how to vote tomorrow --    2% according to Rasmussen Polls.  Perhaps your indecisiveness is from the queasy feeling you get when you really think about what Democrats and Republicans have to offer.

Whether it’s the Federal budget, the role of government or social policy, hypocrisy abounds.  Here are just a few of my favorite examples.

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One could spend lots of time debating the merits of various government programs.  But, our fiscal mess isn’t about Big Bird; it’s about entitlement and tax reform.  Yet, Democrats steadfastly refuse to consider entitlement reform and Republicans will not consider any increase in taxes.  A number of bi-partisan groups – including the President’s own commission (Simpson-Bowles) – have concluded that we must do both. 

The commission recommends entitlement reforms that include reducing benefits to upper income recipients and indexing the eligibility age to life expectancy.   Without it, they say, Social Security will go broke by 2037.  Among its other recommendations is the elimination or dramatic reduction of “tax expenditures”.  In plain English, they are saying that one can’t balance the budget without getting rid of or capping deductions that affect the middle class.   In other words, you can’t preserve entitlements without raising taxes and the idea that tax increases sufficient to reduce the deficit won’t touch the middle class is absurd. 

Yet, both presidential candidates have promised the middle class they will not see a tax increase. 

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Among my favorite contradictions is the way in which our political leaders approach the goal of reducing carbon emissions.  The 2009 Obama stimulus includes programs that invest in private green technology companies.  Anyone who is paying attention knows that at least two of them – Solyndra and A123 – have gone bankrupt following a combined government investment of over $700 Million. 

Senator Chuck Grassley has been among the most vocal of critics.  Taxpayer money should not be invested in businesses that can’t attract private money because they are financially unviable, says Grassley.  Now, assets of those companies are being picked over by Chinese businesses.  In effect, the assets purchased by the taxpayers will be acquired at a discount creating green jobs in China. 

Senator Charles Grassley (R-IA)

But, Grassley is a Republican from Iowa, where every presidential candidate is compelled to take the "Ethanol Pledge" or risk a poor showing in the Iowa Caucuses.  You see, Iowa produces more corn that any state in the nation.  The Energy Independence and Security Act of 2007, which was supported by Grassley, requires that gasoline sold in this country include 15 Billion gallons of ethanol from corn by 2015.  Never mind that Ethanol requires more energy to produce than it, in turn, produces.  Or that the law is driving up the cost of food during our current drought.  It helps farmers in Grassley’s home state.

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There is an old saw about the road to Hell being paved with good intentions.  Everyone likes being charitable.  Everyone likes to help others.  Many even see government as a solution to the need to provide for those less fortunate. 

But, when we look around us all we see is government going broke trying.  Exhibit A is the state of Illinois.  Promised pension and healthcare benefits to government employees have left the state with the second highest debt per capita (behind New York).  The State Budget Crisis Task Force concluded that despite all that borrowing, Illinois’ public pension system’s shortfall is estimated at $85 billion. So, how can government improve schools, upgrade crumbling infrastructure and improve the lives of the poor?  The deficit is hurting the people that liberals hope to help.

Over the years, voters haven’t been willing to pay higher taxes to fund the programs they say they want.  But, if no one wants to pay for it, do they really want it?  And, if they don’t really want it, shouldn’t our political leaders stop approving it?

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Conservatives like to talk about freedom.  They refer to the right to “life, liberty and the pursuit of happiness” asserted in the Declaration of Independence.  So, why doesn’t that right extend to those who disagree with the minority of Americans who describe themselves as evangelical Christians? 

The Republican Party caters to xenophobes and homophobes.  And the debate over a woman’s right to reproductive choice has elicited some of the most offensive comments about rape that I have heard since the 1970’s.  Does Todd Akin really believe that “if it’s a legitimate rape, the female body has ways to try to shut that whole thing down”?  He was talking about pregnancies.  Where did this guy study biology?  And, what exactly is a legitimate rape?

I am an old white guy.  So, the social policies of Republicans don't affect me directly.  But one must wonder.  Will there be enough old white guys left in America to elect Republicans in the future?

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Democrats undermine their credibility when they can’t pay for the programs they invent.  And, Republicans undermine their credibility when they preach freedom but seek to limit it for those with whom they disagree.

It’s no wonder you’re undecided.

WHO WILL LEAD?

Precious Dollars

My last post (One Issue and One Issue Only) stimulated a variety of responses. Many fell into the “Right On!” category; others were more circumspect. Over lunch, one of my readers commented that “every dollar in the federal budget is precious to someone”. That’s a great insight. It explains why pollsters tell us that the vast majority of Americans agree we should balance the budget but few agree that we should cut something that affects them – Social Security or the home mortgage deduction, for example.


Many self-described liberals reacted negatively though none challenged the economics. One described the post as “more blah, blah, blah”. Others merely asserted that I “must be for” raising taxes, eliminating the Bush tax cuts or reducing defense spending. I was a bit taken by surprise as I didn’t intend the post as a political statement but rather a brief on economics. I believe the economics are important because we are sitting on a ticking time bomb.

Sometime late this year or early next, Congress will have to approve another increase in the debt ceiling. Almost simultaneously, the Bush tax cuts will expire – not just those on the rich but the middle class as well. The last debt ceiling deal requires that mandatory cuts be made across the board unless a new deal can be made. So, we will have a sharp increase in taxes accompanied be a dramatic reduction in government spending. In the context of today’s political environment, it’s hard to envision a solution.

If you’re into shock therapy, you may think this will be a good thing for us. However, the abrupt cessation of government deficits is likely to be a shock to the economy, leading to massive unemployment and stalled growth.

It’s easy to buy into the theory that one cannot get out of debt by taking on more debt. It sounds logical. But, an economic collapse will likely result from putting it into practice. We have seen evidence of this in Greece, Ireland and Spain.

It is better to come up with a plan for sustainability that adjusts the current course over time. The President recently submitted his idea to Congress in the form of a budget for fiscal 2013. It was rejected by, not only Republicans, but also every Democrat in the House of Representatives – a vote of 414 to 0.

There are other approaches. Congressman Paul Ryan (R-WI) has put forth his Roadmap for America (see, Every Dogma Has Its Day). It was the basis for his 2013 budget proposal. Now the Chairman of the House Budget Committee, Ryan’s budget proposal has lost some of the bi-partisan approach evident in the original Roadmap.

There is much to criticize in the Ryan budget plan. MIT's Simon Johnson points out that, while Ryan would make substantial cuts to government expenditures, he does little to “stabilize revenues”. He also points out that the Ryan plan is regressive. That is, it cuts substantially from programs that affect the poor. All of that said Ryan does get us on the path to fiscal sustainability according to the bi-partisan Congressional Budget Office.

A more bi-partisan approach was taken by the President’s own commission. The National Commission on Fiscal Responsibility and Reform (often called Simpson-Bowles) first met in April of 2010. Their charter was, according to the President, to identify “policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run”.

Alan Simpson

Recently, the commission’s co-chairs, Alan Simpson (former Republican Senator) and Erskine Bowles (former Clinton chief of staff), were interviewed by Charlie Rose. Simpson joked that his wife noted the “lilt” in his step of late. She said it was because he had finally pissed off everyone in America instead of just a few.

He cited cuts that his bi-partisan commission recommended to student loans, Medicare, defense spending, farm subsidies and veterans benefits. There were increases in gas taxes and the elimination of tax deductions that would affect the middle class.

The plan was criticized by those on the left (Paul Krugman, Nancy Pelosi) who don’t want cuts to government programs and the right (Defense contractors, the American Enterprise Institute) who don’t want to see taxes increased.

Those who occupy the middle of the political spectrum (including me, see "Why I Like Ike") were more friendly, viewing it as a starting point for compromise (Third Way, Concord Coalition).

Personally, I remember being hopeful when the commission’s report was released. I thought perhaps the President would take up the banner and fight the good fight as he had promised – the “grand bargain” he has called it. I wrote about it in a blog post the morning of last year’s State of the Union address (see "Adam Smith: Communitarian").

Everyone will hate getting to a balanced budget. Simpson was only half joking when he talked about pissing off everyone one in America. But, perhaps that is the only way this will work – if everyone makes a sacrifice.

So, how do we get out of this mess? There is only one answer in my view: presidential LEADERSHIP.

Apologists for our current President will point out that the Republican opposition won’t pass anything the President proposes. But, didn’t both Clinton and Reagan have their way with a Congresses of the opposing party? And, didn’t George W. Bush get anything he wanted from a Democratic Congress – the Iraq War, the Patriot Act, the tax cuts?

Has our current President abandoned the hope of his “grand bargain”? Is he capable of leading the nation to a more sustainable course? Is it time for a change?

WHO WILL LEAD?