Thursday, July 7, 2011
Capitalism and Income Distribution
There is another curve, the Lorenz curve, that I wish more baseball fans, indeed more citizens were aware of. This curve is a way for economists to measure what portions of a population are responsible for the income within a group. It is the analysis of this curve that leads to statements such as 10% of the wage earners are responsible for 40% of the income. The closer the curve comes to a horizontal line, the more equally is the income distributed in that group/country. From this curve, economist then create a number called the GINI Coefficient that reflects the level of income equality, or level of income disparity depending on your perspective. The higher the GINI coefficient, the less equal is income distribution, the lower the number, the more equal.
Yea, you know where I am going with this, don't you!!
Rather than enumerating the various numbers, see below a link to the data that I found in Wikipedia which you can cut and paste it into your browser. The data sheet includes a cool interactive tool so that you can sort the various columns other than as it is listed in alphabetic order.
http://en.wikipedia.org/wiki/List_of_countries_by_income_equality
A quick glance at the tables show you that the GINI coefficient for the United States (just over 40) puts us just behind Sri Lanka, Georgia (the ex Soviet country), Ghana, and Turkmenistan (another ex Soviet country), and just ahead of Senegal, Cambodia, Thailand, and Burundi. We are grouped with countries not known for their economic strength, nor their human rights record.
The Nordic countries, Denmark, Sweden, Norway, Finland have 4 of the top 8 lowest GINI scores. Japan is number two. Among others, Germany, South Korea, Turkey, Canada, France, Switzerland, Poland, Spain, Italy and the UK all have lower coefficients.
What bothers me, other than this increasing trend, is the fact that there are many people who will either deny that this situation exists, deny that it is necessarily a bad thing, and/or pretend that unregulated capitalism which results in the rich getting richer to the detriment of the rest, is not a factor of this problem.
To be fair, however, I also read an article that dismisses my belief that income inequality is a problem. This article cited numerous statistics that demonstrated that the poor in America are actually very much better off than the poor, not only in other countries, but even in comparison with the poor of past Americas, say 19th century or early 20th century America. Simple things like access to indoor plumbing, owning TV's, owning a car, having air conditioning, etc. All true. Clearly, there are a host of countries (probably even countries that have lower GINI scores) where the truly poor live in squalid conditions that are far worse than anything in America.
But for me, showing me a picture of the living conditions in some sub-Saharan country and saying, see, our poor don't have it so bad, is an incredibly limited yardstick. How do our poor stack up against those in countries more like ours, say Germany or Japan? Besides, we all know that any comparison is relative. In a place where the average income is $30 a month, someone making $60 is well off. But in America, the average yearly wage is in the upper $40's to low $50's so someone earning $8 per hour (about $16K per year) is poor in comparison, whether or not they own an air conditioner.
Regardless of what some people might say, more equal wealth and income distribution is not the same as exactly equal. I am not advocating that everyone should earn the same salary regardless of position or contribution. There are people who clearly do not participate in our economy and our goal should be to provide the tools, such as education, skills training, and yes, temporary economic assistance, so that they can become productive members of our nation.
But how do we justify when someone earns 100, 300, even 1000 times the salary of others in the same company? To illustrate how this trend to higher salaries for the top wage earners has blossomed, check out the data from the census tables which can be accessed through the following website.
http://www.census.gov/compendia/statab/2011/tables/11s0695.pdf
As you can see, the first chart details that 5% of families earned over $200K per year in 2008 while 8% earned under $15K. Even more illuminating, the second chart illustrates that in 1980, 8.8% of families earned under $15K while 13.2% earned over $100K, yet by 2008, while 8.1% still earned under $15K, a whopping 26% now earned over
$100K. Is it better for a country to have all people experience the benefits of a growing standard of living or just some?
If those earning $7.50 and hour made $10 instead while those earning $51 made $48, would the benefits of that extra money for the lower wage earners outweigh the detriments to those who saw their income drop a bit? Would it be better for America if more people felt economically comfortable? Would it hurt America if less people felt "rich"?
Perhaps the real question is, how do we redistribute income so that we maintain a strong middle class without rewarding those that do not work yet while still limiting the restrictions we place on the movers and the shakers so that they still have incentive to create. There are no easy answers, but we will never find an answer if we don't first admit that income inequality is a problem. And we will never find a solution if we continue to cling to the near religious belief that capitalism is a perfect economic system.
Monday, July 4, 2011
Holidays and Labor
Happy 4th of July.
This morning I googled "labor force" and found that the US department of labor pegs the labor force of America at approximately 153 million people. Although technically, I worked today (there are no days off in the newspaper business), I count myself as one of the majority of workers who had off today, with pay.
But not everyone who is off today, is being paid. And not everyone is off today, as one can easily see at any shopping mall in the country. The fact is, in contrast with every other "western" nation, our country does not mandate annual leave or paid holidays. No employer is compelled to offer the day that celebrates our nation's birth as a day off from work, let alone off with pay!
Fortunately, most employers do count today as a paid holiday. Statistics I found indicate that for higher wage earners, upwards of 88% have off today with pay, and for lower wage earners roughly 66%. (I couldn't find the definition of higher and lower for those percentages, but I discerned that the line is drawn around the $60K per year line). For full time workers the percentage is very high also, but only about one in three part time workers have the day off with pay.
Strangely, one of the biggest reasons why most of us have off with pay, is a result of the work of the unions which negotiated paid annual leave (among other worker benefits we take for granted) with both public and private employers during the economic boom of the 20th century. I say strangely, because unions are under attack all across the United States, especially those that represent public employees. Most recently, Wisconsin and New Jersey legislatures, pushed by Republican governors, passed laws restricting the unions' ability to negotiate benefits. Union influence has steadily waned since its heyday in the 1970's; is it a coincidence that the standard of living for the American middle class has remained static since that time?
Perhaps you will find yourself at a store today. Chances are, it will be a "chain" store as opposed to a local one as it is these chains, department stores, food stores, home improvement stores, etc that traditionally average lower wages, and poor benefits. While some of the people you encounter will be getting paid overtime for working today, the vast majority will not. And while many will have volunteered to work, a large percentage of those volunteers are, in fact, getting paid extra (which is why they volunteered), but a much larger percentage had no choice. They lost the lottery and found their name on the schedule today.
As I have written many times before, America is a great place to live and I am proud to live here. In so many countries on earth today, I would not be able to sit in front of my computer and write the words you have just read. We clearly value freedom and the right to pursue happiness as individuals.
But we can do better!! Business is all well and good but it should not be the only yard stick for our decisions. Public policies that grant all the cards to employers will only continue to erode everyday Americans' ability to enjoy the freedoms of which we are so blessed. Politicians who have no qualms about cutting wages and benefits for workers who earn less than $50K per year, yet quake and moan at the prospect of raising taxes of those earning over $500K per year or (egads!) limiting salaries to $10 million per person, are not looking after my interests, nor, in my opinion, the interests of those who comprise the backbone of this country.
So, again, happy 4th of July. I hope that you are able to enjoy the day as a paid holiday. Be careful working in the yard and grilling your meal. And, if you do go out to shop, be extra nice to the cashier or stock person or sales rep you may encounter. Remember, they are also celebrating our freedoms and our country's birth.
Thursday, June 16, 2011
America at War III
I see that Congress is upset with President Obama's decision to commit United States forces in Libya. Citing the War Powers Resolution, many republicans and democrats want their say in who we bomb. Strangely, I get the impression that they want their say, not because they believe that we shouldn't be involved, as most republicans faulted Obama for not acting more quickly in the early days of the Libyan people's protests, but to merely have their opinion asked. Again, while our elected officials engage in political battles for power, even more money and resources are being expended in military conflicts.
If you haven't checked out costofwar.com please so do. It gives a running total of the cost of the two wars in Iraq and Afghanistan since 2001. A total for each and a total total. Staggering!
I googled "cost of bridge repair". There were umpteen articles listed from newspapers around the country discussing the growing crisis in repairing our aging bridges a big percentage of which are in their mid 40's. One of the articles, using 2009 data, said that the cost to our states to repair its bridges had increased dramatically up to over $70 billion, but that the federal aid to help with this cost had increased only slightly, to a bit over $5 billion. It also said that much of the federal aid was generated from the gas tax, 18.4 cents per gallon, and that this tax hadn't been increased since 1993.
So assuming that an increase in the gas tax is out of the question, how many fewer bombs must we drop to divert $70 billion to the states to repair our aging infrastructure. Or, how many fewer stealth bombers must we manufacture? Or, to be positive, how many thousands of troops must we bring home from Iraq and Afghanistan? How about how many military bases must we close?
The more I research, the more I read, the more I "google", the more I believe that the war on terror is bankrupting America and that the terrorists have taken our strengths, our belief in democracy and freedom and the rights of individuals, and are using them to win the war, not through battles on the field or taking plots of land, but by causing us to divert our resources away from the welfare of our citizens into the bottomless pit of military conflict.
Sunday, June 12, 2011
America at War II
Then came the invasion of Iraq. This time, massive ground forces were used in conjunction with that now famous shock and awe air campaign, and the enemy was again, quickly subdued. While I have extreme doubts about why we needed to invade Iraq, militarily, both "wars" were extremely successful. In each case, the military objectives were quickly met.
So, why is it that we find ourselves, many years and literally, a trillion dollars after these great military successes, still involved in armed conflict in both countries, still spending billions of dollars a month in Iraq and Afghanistan?
After listening to Lone Survivor, I would bet that the author, Navy SEAL, Marcus Luttrell would say that the answer is because we didn't let the military do the job they are trained to do. We didn't let the United States military expend its full force upon those "turban heads" and kill each and every one of them. We let politicians make our war decisions when we should have been listening to military leaders.
Instead of truly embarking on a war on terror by unleashing our own unique American brand of military terror, we took our collective foot off the pedal and engaged in efforts to win hearts and minds.
We wanted the very people whose country we devastated, whose brothers and fathers we killed and wounded, whose homes we destroyed, whose economy we wrecked, to now embrace us as their saviors for ridding them of their leaders, be it the Taliban or Saddam.
We changed from being engaged in a military campaign to find and kill Osama Bin Laden, root out and emasculate Al Qaeda, scatter the Taliban to the wind, and remove the threat of weapons of mass destruction from the hands of an ego maniac to being engaged in attempts to prop up more friendly, but corrupt regimes and "nation building".
Anyone who reads me regularly may be surprised at what I have just written. So let me ask you this, is what I just wrote incorrect? Would we not have been able to kill even more terrorists, probably find Bin Laden faster, and annihilate the Taliban if we let the military have its way. If we had not grown a conscious?
And maybe we would even have all that oil bubbling under ground in Iraq as well.
What exactly, has our $1.2 trillion bought us? Peace of mind? More security? More friends in the Arab or Muslim world? If our real goal was the first two, peace and security, how much war does it take to achieve peace? How much security does killing, which always turns on the revenge instinct in humans, buy us? And if it is the third, if it is friends that we are trying to gain, then I don't see any logic to bringing death and destruction onto a country then expecting them to be happy with us.
Why is it that all those hand wringing over the national debt seems to be led by the same people who have no issues with our huge defense budget? Why aren't they lamenting that our children and grandchildren will be saddled with the cost of our wars if we don't re-evaluate our use of the military?
Perhaps a better approach is a truly peaceful one. Not peace through war, peace through killing anyone with an idea, or god, or philosophy that differs from ours, but peace through cooperation. Peace through trade which is mutually beneficial. Peace through understanding ideas that seem foreign to us because killing a person for his ideas will never, ever, ever kill that idea. Peace through an open hand not a closed fist.
I am not naive enough to think that we do not need our military. There will certainly be times when our disagreements with a country or group will require a military response. But I can't imagine why we would ever need to spend billions of dollars with massive ground troop movements to express our perspective, or find a true enemy of America when we have military men and women like the aforementioned Marcus Luttrell.
America at War
A friend of mine recently gave me two audio books to listen to while delivering papers. Both concerned instances which have occurred during the War in Afghanistan. "The Horse Soldiers" tells of the initial phases of the war when special op troops were deployed to assist the Afghan nationals in their war on the Taliban. This campaign of directed bombing of targets identified by these on the ground, special op warriors produced a series of incredibly swift and successful victories and eventually led to President Bush's infamous declaration that major warfare in Afghanistan was over. It is an inspiring tale of American warfare superiority and individual fortitude and heroism.
The second story is called "Lone Survivor". It takes place in 2005, two years after then President Bush's speech (see above). It details the Navy SEAL operation which claimed the lives of three of the four SEALS, then also led to the loss of life for a few dozen more special op forces helicoptered in during a rescue attempt of the original four. While it does not depict American military might in a winning form, it is an amazing recount of the bravery, courage and character of the Navy SEAL program in general and the four SEALS in particular who fought against overwhelming odds on that lonely mountaintop.
I enjoyed both audio books. They provided info on the war in Afghanistan of which I was not aware while also reminding me of the unbelievable men (and women) who comprise our military, and in particular our special ops forces. You see, it is possible for a liberal who believes that war is wrong and should be avoided at all costs to still admire the people who are asked to fight for our country. The horrible way we treated the Vietnam veterans as if it was their decision to fight that terribly wasteful war should never be repeated. The American soldier is your brother, sister, neighbor, co-worker, son or daughter, a band of patriots who so love our country and what it represents that they are willing to die for it, and whether the war they die fighting is popular or unpopular, their sacrifice is the same and should be recognized as such. As an American, I would hope we remember this when we feel the desire to castigate someone in the military, and as a liberal I expect I will always believe that the best way for me to support these American heroes is to get them home.
Wednesday, June 8, 2011
Olympic Bid
I wonder if those that proclaimed that climate change was fake when we had lots of snow and cold temps will reconsider their thoughts as they swelter in our current upper 90 to 100 degree weather today. Or will they say that a few days or a week of a particular weather does not prove anything. HMMM. I guess that logic didn't apply when they commented on the cold days.
It was announced today that Comcast was awarded the rights to broadcast the next four Olympic games, 2014, 2016, 2018 and 2020. The cost, a mere $4.4 billion. Yes, billion. Comcast news is of more interest in this area than most because it has its roots in the Philadelphia region and it is the parent company for both the 76ers basketball and Flyers hockey teams. We have watched the company grow from an obscure cable TV provider to a behemoth in the communications industry.
What is particularly noteworthy is that, as current owner of NBC corporation, Comcast knows that NBC lost over $220 million in 2010 as broadcast provider for the Vancouver Olympics yet this gigantic $4.4 billion bid, almost $1 billion more than the next bidder, was called "a path to profitability".
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I wrote more here, and thought I posted it but apparently not as I now realize that everything after this was lost.
In a nutshell, I wrote about the fact that while Comcast, a company with Philadelphia roots is willing to invest over $4 billion dollars to broadcast the Olympics in hopes that this investment will attract viewers, hence advertisers, and justify this monstrous outlay of money, the Philadelphia school district is struggling to bridge a shortfall which has already resulted in the layoff of 1500 teachers.
I also commented about how when a business invests huge amounts of resources in hopes of future profits, when the government proposes "stimulus" spending as the Obama Administration did two years ago, there was major outcry from the right (and in some cases, the business community) claiming this was irresponsible spending. Why is investing money to attract TV dollars good business but investing money to avoid bankruptcies and home foreclosures not a good idea?
Some might answer that a poor business decision produces monetary losses while a poor economic decisions by the government just causes higher taxes. I would counter that in the case of Comcast, an Olympic failure to create profit might just result in higher cable bills down the line. I also wonder if that $220 million loss indicated above might have been used to offset profits, which means a lower tax bite which means the American taxpayer paid for that poor decision as well.
My final point was that perhaps we should embrace the beast (in this case, Comcast playing the role of the beast). If indeed, Comcast (or an huge corporation) is able to use losses as tax write-offs, then perhaps we should marry these large entities to our financially struggling school districts. Maybe that $220 million tax credit could bypass the middle man and go directly to the schools. Still a tax credit but used for a much better purpose. And maybe the kids could get free cable as well.
Monday, June 6, 2011
Widening Perspective
For the last few weeks I have been listening to the BBC world news report from 5-6:00 AM during my morning delivery. Like the TV version, the BBC world news presents news from the perspective of the people to whom the news is occurring as opposed to so much American news which seems to focus on how the news of other places effects us.
For instance, the BBC news about Yemen presents stories describing how the violence and unrest effect the citizens of that country. How alliances have formed, broken apart and reformed as the situation has evolved. Interviews with people on the street, generals, business men, politicians, all depict the wide variety of experiences that is life in Yemen.
American news on the other hand, seems to focus on Yemen as the new hotbed for Al Qaeda. No understanding of why this may be so, just that it is.
Are we so preoccupied with ourselves, our lives, that we are unable to learn about, or even try to understand other viewpoints, other experiences?
Or perhaps, to be completely paranoid, we are kept in the dark, purposefully. It is so much easier to justify the demonification of another people or country when all we know is that they are our enemy. To make matters worse, we are all so busy, good busy with our family and friends, and just busy trying to make ends meet, that we lack the time to invest in understanding the world around us. Again, perhaps for a reason.
It reminds me of the latest hand-over-heart, America-is-the-greatest anthem that is driving a certain possible presidential candidate and has attracted a great many "patriotic" followers. But when pressed for comparisons, the most vocal of this genre have not been out of the country, don't have a working knowledge of current events in other places, can't cite statistics or facts that back up their ideology. They are proud because they were born here. When I point out that people born in other countries are just as proud of their roots and history, and that, perhaps had they been born in another place they would have just as strong a sense of pride for that country as they do for America, I am met with... well, I guess you could call it befuddlement. It is if that possibility, that someone could be born in another country, that these American patriots could have been born in another country, and actually love that country, is just not possible. Almost an alien concept.
I have said it before, and will say it again; perspective is a funny thing.
Friday, June 3, 2011
Assisted Suicide
Today, Dr. Jack Kevorkian died. For those unfamiliar with the man, he has led a personal crusade to attempt to change our society's views on euthanasia. It is said that he assisted in the deaths of over a hundred individuals, in many cases through the use of a "machine" of his own making that injected a deadly dose of drugs, controlled by the "patient".
Death.
And yet, there are rare times when death is preferable. When the physical, emotional or mental pain is so debilitating that we crave an end. We especially see this condition in those fighting the horrible manifestations of diseases such as cancer, ALS, AIDS, etc. When life has become an endless series of painful experiences, and the only relief comes from constant, heavy sedation, what is the point of continuing.
Strangely, we do have a medical process to enable suicide. The DNR (do not resuscitate) document can function as a legal means to enable ones death while absolving the medical community from any claims of neglect. While we might rationalize that this is a passive kind of suicide, it is a suicide nevertheless when one considers the amazing medical breakthroughs that can extend a life.
In the end, regardless of whether you agree with his methods or not, Dr. Kevorkian put his life and reputation on the line for his beliefs. In a time when beliefs seem to change with the winds of public opinion, it is rare to find a man with such resolve. For now, one might say he dies as an infamous individual. I wonder what history will make of his life and work in 10, 20 or 30 years when more and more of us reach the time when merely being alive is not enough. When the only rage left in us is the rage to reach the light.
Monday, May 23, 2011
The Rapture
This past weekend, Saturday evening to be precise, was identified as a possible day to mark the beginning of an "end of the world" process that would culminate in October. Apparently, a man named Harold Camping, a fundamentalist, radio talk show host, had predicted this end some time ago. To give him credit, he included some pretty specific details so it would be obvious if he was wrong or right. And, as has been true of all previous prognostications concerning the end of the world, Mr. Camping was wrong in this case.
As a result of this not-end-of-the-world event, there were many jokes directed at both evangelicals like Harold Camping who continue to make their living by scaring people into believing their particular viewpoint is the ultimate one, and, of course, the believers themselves. But despite the fact that the sun came up on May 22nd disproving this week's end of man prediction, there will soon be another prophesy, and another end date revealed.
Science tells us that the earth has existed for a few billion years while man has only been present on earth for a few million years. A simple calculation indicates that the world (Earth) has existed without man for well over 99% of its existence. Chances are the Earth will continue rotating and revolving for quite a long time once all traces of mankind are gone so to me, all this end of the world talk should more precisely be labelled end of man talk. Perspective can be a funny thing.
Yet there is a serious side to the never ending end-of-man talk. Because the fact is, Saturday, May 21st did mark the "end of man" for approximately 150,000 humans on earth as that is the number of people who die everyday. This number includes mothers, fathers, brothers, sisters, children, aunts, uncles, grandparents, cousins, and good friends. For them, the prediction was all too true. And for their families, while May 21st may not have marked a global end, it certainly changed their lives forever.
So, perhaps end of man talk can serve a positive purpose. Not by scaring us to adopt a certain faith but by reminding us how precious is life and how important are the people who share our lives. The end of man will certainly come some day, but in the meantime, the end of particular men and women will be grieved and lamented, 150,000 times a day. Perhaps we would be better prepared for that "end time" if we lived our lives by doing more to demonstrate our love, first, for those most important to us, and second for all those other fellow travelers who share our time on Earth.
Wednesday, May 18, 2011
The company you keep
The reason for my research into this topic was Monday's lead article in the Inquirer which detailed a diatribe by Pennsylvania's Chief Justice Ronald Castille concerning the federal defense attorneys who recently filed a motion to stay the execution of a death row inmate. Justice Castille concluded that the exhaustive efforts being put forth by these attorneys to keep their client alive were politically motivated and represented a concerted effort on their part to sabotage the death penalty in Pennsylvania.
I sent the following letter to the Inquirer that evening.
To the editor:
Chief Justice Castille is right to be frustrated over the seemingly endless motions and appeals that occur with any ongoing death penalty case. But his anger is misdirected. Those federal defense attorneys that he accuses of engaging in "the zealous pursuit.. to impede and sabotage the death penalty" do so to guarantee their client's being treated fairly; I am sure he would expect the same dedication to duty of those on the prosecution side. Does he think these attorneys should just give up? In light of the numerous examples of death penalty convictions being overthrown due to subsequent DNA evidence, I think their continued doggedness is warranted.
The Chief Justice should be directing his anger at politicians who use support of capital punishment to project a "tough on crime" mentality to voters, the district attorneys who pursue the death penalty, and the Pennsylvania legislatures who have failed to pass a bill banning the death penalty in our state.
The death penalty has been proven over and over again to be ineffective in deterring capital crimes. That is why 15 states plus the District of Columbia have outlawed the death penalty while two more (including New Jersey) have placed a moratorium on executions. Not to mention the 95 countries worldwide including virtually all of Europe which have ceased its use.
And then there is the expense. Seeking a death penalty conviction increases the cost of trial tenfold, relieving a disproportionate amount of money from already strapped city, county and state budgets while resulting in very few actual executions; only three in PA since 1976, none since 1999. Seeking life sentences instead produces the same effective result - the removal of dangerous criminals from the streets - while freeing up money that an be used much more efficiently in the fight against crime.
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So, in this case, the United States shares this dubious characteristic with four of the most repressive regimes in the world, two of which are 2/3 of the "axis of evil". I imagine that we might be more aggressive in decrying the Saudi Arabian government if it wasn't for oil and the Chinese government if it wasn't for corporate America's need for cheap labor but that is grist for another blog.
Of course, I know there is a big distinction between our use of the death penalty as part of our judicial system and the use of the death penalty in those other countries for political dissidents as well as criminals. Yet, the fact remains that 95 countries in the world do not have a death penalty, including virtually all of the western world of which we claim the most similarity. We are the only NATO country still using the death penalty.
More data to consider.
Pennsylvania has 222 death row inmates (fourth highest state total), over 100 of them placed there during Lynn Abraham's tenure as district attorney of Philadelphia. As I mentioned in the letter, only 3 executions have occurred in PA since 1976, none since
1999. During that time 22 death row inmates died of natural causes.
Governor Ed Rendell signed over 100 death row warrants during his two terms as governor, despite the fact that he was aware of its lack of use. (See politicians who need to appear to be tough on crime in my letter above).
Since 1976 there have been 1251 executions in the US with Texas far out in the lead with 467 of them (about 37%). Of the 34 states which have executed criminals since 1976, Texas has put to death more than the totals of 29 of those 34 states combined. Makes you wonder if Texas has more capital crimes, more evil people or an easier path from conviction to execution.
Actual death sentences in the United States has steadily fallen since 1994 so that by 2009 it was about 1/3 of the number of 1994 (from 313 to 112).
138 death row exonerations have occurred since 1973. Remember, these are people who were convicted, sentenced to die and later found to be innocent and released. Partly as the result of research, motions and appeals by defense attorneys just like those that Chief Justice Castille railed against.
As of deterrence, there is a huge difference between number of executions in the south compared to the other regions of the US, but very little difference between murder rates. In fact, the south has one of the higher regional murder rates.
Finally, the cost is astronomical. Hundreds of millions of dollars have been spent to prosecute and house the few thousand death row inmates. Again, money that could have been spent to combat crime.
Wednesday, May 4, 2011
The Energy Conundrum
Monday, May 2, 2011
Osama bin Laden
Clearly, the news of the day is the death of Osama bin Laden. To the brave special forces unit that executed such a daring, dangerous and precise operation, we all owe a great debt and sincere congratulations. I was especially touched by the people interviewed that lost loved ones on 9/11 and who exuded a sense of relief and closure upon hearing the news. The spontaneous celebrations in Washington DC and at ground zero, among other places, speak to the deep seated sadness that Americans have suppressed since that scary day almost 10 years ago. As is the case with all momentous events, we will all remember for the rest of our lives where we were on 9/11 and now, where we were when we heard the news of the killing of bin Laden.
Despite the realization that bin Laden may have been less involved operationally with the designs of al-Qaeda he was still the face of this movement and its spiritual leader. While his memory may still be used to inspire suicide missions, violence and destruction, his charisma and connections with those that loved him will not be easily replicated. The famous and infamous alike share a certain trait that elevate them to a unique place in history. Bin Laden had this trait which is why he generates such extreme love, and extreme hatred.
For me, the removal of someone so misguided as to think that violence and destruction somehow conformed to his religion and was blessed by his God is a good thing. Many commentators I heard today mentioned that they thought that bin Laden not only suffered a deserved, violent death and less than desirable burial, but that he certainly faced an eternity of torture at the hands of his creator. It is hard to disagree with this assessment.
Perhaps though, there is a lesson for all of us in his example. Righteous violence, whether to deal with a terrorist leader or the neighborhood bully can be a seductive activity and so easily condoned, even cheered. But where does it end? In the case of bin Laden, "justice has been served" as President Obama said. We spent untold dollars and countless lives to hunt down bin Laden and I would imagine that the vast majority of Americans would feel the price was worthwhile to avenge the death of the victims of 9/11.
But what about invading a country to remove its leader? Or firing missiles into foreign cities to force those in charge to relinquish power? When does violence in an effort to fight a brutal dictator or an "evil" nation cross over the line of righteousness and become the very thing it claims to abhor? Is it possible that by spending almost 1 out of every 3 dollars of our national budget on the military that we have stepped over the line of righteousness?
In light of the dramatic raid and killing of Bin Laden, one might argue that we don't need to spend over $700 billion each year on the military when superior intelligence, patience and precision are all we need to strike a blow against our enemies.
We are currently debating the causes and solutions of our growing national debt. Our colossal military budget is a factor in this growing debt. Perhaps, as part of this debate, we should be questioning our desire to be the world's police force, the cost of such a desire, and the moral certainty that this path is the will of our God.
Sunday, April 24, 2011
I Want My Country Back
I Want my Country back...
I want my country back from people who believe President Obama hates America.
I want my country back from those who use religion to foster hatred.
I want my country back from people who believe that repeating a lie often enough makes it true.
I want my country back from those who decry the tyranny of the majority, until they become it.
I want my country back from people who use profit as their only yardstick.
I want my country back from those who think Charlie Sheen and the Kardashian sisters are role models.
I want my country back from people who believe that the loudest opinion is correct.
I want my country back from those who forget that everyone in America descends from immigrant ancestors unless they are Native American.
I want my country back from people who believe that might makes right.
I want my country back from those who are very religious but not nearly spiritual enough.
I want my country back from people who believe that compromise is a sign of weakness.
I want my country back from those who deny the pleasures of marriage to the gay community while ignoring the 50% plus failure rate of marriage among heterosexuals.
I want my country back from those who believe that profits are more important than people.
I want my country back from people who believe that their religion is the only true religion, their politics the most patriotic, their color the superior race, their sexual orientation the only moral perspective and their nationality the only exceptional heritage because it is divinely blessed.
America is a great country! Despite the fact that your opinions may reflect some of mine as detailed above or are more in tune with one or all of those with which I disagree, we are able to voice those opinions, debate the merits and flaws of our various ideas and do so without the violence and unrest that is currently taking place among people throughout the world. Unfortunately, we sometimes forget that it is the very existence of this diverse and sometimes incompatible range of viewpoints, and the freedom to express them that makes America so great. Our ability to resolve the disagreements among ourselves, without rancor, is the most powerful example we can present to those protesting, fighting and dying for the rights and freedoms that we so often take for granted.
Thursday, April 21, 2011
Taxes
Lately, with all the news about our growing national deficit, I have spent some time reading the various deficit reduction plans, critiques of said plans, and articles about taxes in general.
I have read that our corporations pay a far smaller percentage of aggregate collected income tax than they did 20, 30, 40 years ago, but I also read an opinion that these collected taxes are lower because many of these multi-national corporations moved their headquarters off shore to take advantage of the lower corporate taxes of other countries.
I have read that we shouldn't tax millionaires any more than we are currently, because they will simply up and move their companies and/or residences to states where the taxes are lower but then I read about a research study that indicated that very few millionaires, who have the opportunity to move to a neighboring state with lower "top-end" income taxes, actually did move.
I have read that one party's deficit reduction plan will place the next generation of our elderly in the precarious situation of chasing after their own individual health care plan while on a "budget" while the other party's plan will result in the bankruptcy of Medicare which will leave all the elderly without medical coverage. But then I read that one party's tax cut is another party's increase in spending and that either way the budget will never be balanced.
So what is the answer?
As is always the case, the answer lies in a country's priorities. What does it mean that Medicare or Social Security are going to bankrupt America? My understanding is that both these programs have historically collected more money than needed to pay their liabilities. Unfortunately, that excess money was used to balance past federal budgets rather than kept aside for a rainy day (and it appears to be raining pretty hard right now) so we have IOU's in place of actual funds. Yes, those IOU's are in the form of treasury bills, etc which means that one government agency owes another, but the fact is there is a debt and accompanying interest that exists as a result of this accounting ploy.
And now, there is the fast approaching time when these programs will begin taking in less money than required to pay the bills so not only will we be paying interest on past debt, we will have to come up with new money to pay future liabilities. So, while using the word bankrupt may be an exaggeration of sorts, the fact is that either cuts to the benefits or new taxes will need to occur to bring both programs back to solvency.
Now, lets take the case of national defense. The United States spends as much money on "defense" as the next 20+ countries in the world, 5 times more than that spent by the 2nd highest. Should that mean that we, as citizens, should then expect to pay more in taxes to support this tremendous outlay of monies? If there were a poll taken today of Americans asking if they were willing to pay substantially more in taxes than the citizens of all other countries in the world to cover defense spending, what would the result be? Clearly, Americans seem unwilling to pay more taxes for better health care and other social services, but I wonder if we would draw the line on national defense. If so, then I guess we have established our national priority; security as a nation over security as individuals. If not, then perhaps we need to have a new discussion about where our tax money is being spent.
Which brings me back to corporations. Are they not willing to shoulder the higher tax rate to keep America safe?
One other question about corporate taxes. Why are corporations allowed to merely establish a corporate headquarters in another country to avoid US taxes? Perhaps I am naive in saying this, but wouldn't it be more fair if corporations paid taxes to the countries coffers where they actually earn their revenue and profit? If I were to research and find the lowest state tax rate in the country and then open a post office box in that state and use it as my "headquarters", could I avoid the state tax of the state where I work? Probably not, yet isn't that what we allow corporations to do?
Finally, I saw an article in a well-respected business magazine which detailed how businesses and individuals could pay no taxes to Uncle Sam. All the suggestions were legal tax deductions, of course. Certainly, I understand that we all need to feel that our tax money is being spent wisely, and so I encourage everyone to research the national budget and see where the money comes from and where it goes. But is it not part of our patriotic duty to pay our taxes? Or, to put it more bluntly, are you not willing to support our troops, pave our roads, build our bridges, educate our children, research the prevention of disease, assist the disadvantaged, etc? Or have we all become so selfish and self-centered that we now ask "not what we can do for our country" but what our country can do for us?
Sunday, April 3, 2011
Final thought (for now) on the budget and the military
In a previous blog, I detailed that federal spending is divided into two main categories, mandatory (required spending per existing laws) and discretionary spending (where we choose to spend our funds). So, when I recently read an article that stated that discretionary spending for the 2011 federal budget was overwhelmingly being directed to the department of defense (something like 75%), I thought it necessary to investigate.
Towards that end, I found a very informative interactive graphic in a New York Times article. Cut and paste link below.
http://www.nytimes.com/interactive/2010/02/01/us/budget.html
This graphic displays the 2011 federal budget by spending via blocks that are sized based on the amount allocated for each area. It is also color coded in that it indicates the percentage of increase or decrease for the 2011 budget over the 2010 budget. It is interactive in that you can place your cursor on each box to reveal the name of the category. And, at the top, there is a box that enables you to hide the mandatory spending categories to display only the areas of discretionary spending. It is very revealing!
First, if you look at it with all spending boxes "on", it is easy to see where the bulk of the federal budget is targeted; national defense, social security, medicare and an area called income security. Clicking on the "remove mandatory spending" button, presents the discretionary spending and confirms in stark contrast the high percentage of military spending that the article claims. The shear size of the box when compared to spending in all other areas would be comical if not for the fact that it reveals just how costly is our belief in might makes right. I encourage everyone to take a look at this graphic and decide for yourself if it reflects your priorities.
In conjunction with this discussion on the military, I recently began reading a book called "9/11/11: The Tenth Anniversary Attack" by Dr. Rocco Martino. It is a work of fiction but is executed by a writer who clearly knows his subject. In the book, Dr. Martino attempts to detail the strategies of our terrorist enemies, and our own government as we attempt to thwart their plans to inflict damage on our country. The plot takes the reader through the time of late 2010 up until the 10th anniversary of 9/11 and paints a possible picture of the destruction that may be heading our way.
Without revealing too many details about the book, there is one particular scene which spurred an unsettling thought on my part. The scene involves a conversation between two of the main characters in which they are discussing as fact how President Reagan toppled the Soviet empire by outspending them. I am not saying I disagree with the assertion that this was the sole cause of the fall of the Soviets as I think it is a bit simplistic, but I certainly agree that it was a factor. (It certainly led to the doubling of our national debt which so many conservatives today seem to overlook in their idolatry of Reagan's legacy).
What unsettled me was that perhaps our enemies are using the same philosophy against us, i.e trying to bankrupt us in our execution of the "war on terror". Again, the obvious fact that we have spent huge sums of money on the wars since 9/11 (not to mention lives) and that, again, this expenditure has as much to do with our growing national debt as anything, seems lost on the deficit hawks now in the spotlight. Perhaps our enemies' plan is to let us spend ourselves into bankruptcy by merely adding fuel to our "revengeful" fire via the occasional plot (foiled or successful, it doesn't matter). Now, as I review the budget boxes as demonstrated on the NY times graphic, it makes me even more concerned that perhaps my fear is not so outlandish.
At a time when federal, state and local budgets are under stress to decrease funding for the people of this country via education, health and human services, there seems no end to the money we will spend on the military. What better way to destroy a country than to let it collapse upon itself.
For readers interested in Dr. Martino's book, please refer to the following websites for information.
http://www.roccoelonardmartino.com (Dr. Martino's website)
http://www.9-11-11thenovel.com (the book site)
Or, for all you electronic book users, it is available on both Amazon (in digital and electronic form) and Barnes and Noble (in electronic form).
Thursday, March 24, 2011
Another War
As if we weren't engaged in enough military expressions, President Obama decided to join (some might say form), a coalition of western allies to attack Libya. Our old friend, Muammar Gadhafi has been killing his own people as they rise in protest of his authoritarian rule. Like the wave of freedom-seeking protesters that has swept across the Middle East these past few months, those in Libya are expressing their anger at decades of poverty and pain for the people while the comforts of oil money stay in so few hands. It is a scenario, with or without the oil connection, that is playing out in Egypt, Yemen, and Tunisia among others, and has implications for any eastern or western nation where the young have awakened to their plight.
While I understand that, in this case, the Libyan leadership was using more modern weapons at their disposal to quell the unrest than did some previous dictatorships, I have to wonder why we didn't intervene, militarily, on the side of any of the other citizen protesters. Perhaps because we dislike Gadhafi more than Mubarak in Egypt? Perhaps because there is oil in Libya but none in Tunisia? If the same type of protesting began tomorrow in an African country, would we call on the United Nations to intervene? If it happened in Saudi Arabia, would we create a no fly zone and shoot down the Saudi's American made planes?
I am glad that I am not in President Obama's shoes. I can only imagine the pressure he was under to "act" in support of the Libyan protesters or face the usual political pundits who would claim his hesitancy reflected a "deer in the headlights" reaction typical of his presidency, at best, an outright hatred of freedom at worst.
For me, I can't quite grasp how it is so easy for us to justify killing others in the name of freedom. And, even more baffling, how the winner in these conflicts is always in the right, as if they are divinely blessed. For all the millions of people who have been slaughtered throughout history by superior military forces, it must be difficult to swallow the realization that they were killed by the grace of someones god.
Perhaps this has been suggested already, so I don't want to assume I didn't hear it somewhere in passing, but it occurs to me that this wave of protest is a reflection, not of our military excursions into Iraq and Afghanistan, not a result of President Bush's drive to bring democracy to the world, not even because current President Obama has reached out to the Muslim world in a way that no previous president.
I think these protests, driven mostly by the young, are due to the power and pervasiveness of social media. Yes, it is Bill Gates, Mark Zuckerburg and Jack Dorsey whom we should thank. In the last 20 years, their creations have spread the concepts of freedom and self determination, and the rights for all human beings to enjoy those freedoms more quickly than in the previous millennia of human existence.
So, perhaps rather than spending $850 billion on defense and the military, the United States should spend, lets say $10 or $20 or even $50 billion dollars instead towards supporting the continuation of the flow of information. Then we will have more than enough money for proper funding to fix the infrastructure of our country, and to maintain the many other domestic programs we cannot fund due to the incredible cost of waging war.
Yes, while we will have to put up with U-tube videos of stupid pet tricks and celebrities gone wild, we will also provide the millions of under 20's who reside in these suppressed countries the means to experience our freedoms. It is only a taste that they need, their youthful energy and vigor will provide the rest. After all, where previous totalitarian regimes always sought to repress newspaper, TV and radio, they now target Facebook and Twitter instead.
Wednesday, March 16, 2011
The NFL Labor Dispute
Which brings me to the ongoing labor dispute in the NFL. Generally, I lean toward the side of workers in most labor issues. To me, owners/business operators hold the vast majority of the cards so when a particular labor group can draw even, or perhaps inch ahead, I feel it is a win for all workers. In this case, though, we are talking about millionaires fighting with fellow millionaires, and it leaves me cold. Regardless of who wins this fight, the loser will still be neck deep in money.
In reality, all football fans in particular, and sports fans in general are the losers here because no matter how is shakes out, the fan will foot the bill for someone's increased revenue.
Anyone who knows me, knows that I am a big sports fan. I follow all the professional sports teams of Philadelphia, and up until recently was able to attend a few Eagles games each year. So it is not easy for me to say that I hope there is no football season this year. I hope the two sides cannot come to an agreement to share the billions of dollars at stake, and decide to play chicken with the sport. I hope that their resistance to compromise (by the way, when did compromise become an indicator of weakness?), causes a complete cancellation of the 2011-12 football season.
More importantly, I hope that fans like myself come to realize that sports is just a diversion from life, not life itself. That we can enjoy our Sundays (and Monday nights, and sometimes Thursday nights, and, yes even Thanksgiving) without the sport. I hope that we find more time to spend with our families, more time to walk in the neighborhood or the local park. More time to read, listen to music or go to a movie. I hope we find that it is nice to watch a football game, but not necessary. Then, perhaps, when the labor dispute is settled, the embattled millionaires will realize that they need us more than we need them and sports will revert back to its proper priority in life.
Sunday, March 13, 2011
Trickle Down
This past week, Governor Corbett of Pennsylvania, proposed his 2011-12 budget. Going into the process, it was known that the governor was faced with the daunting task of balancing a budget with a $4 billion deficit, a task he made even more difficult by promising no tax hikes to close the gap.
The good news is that he was true to his word; no tax increases. The bad news is that he was true to his word. No new taxes but massive funding reductions, centered mostly in education and human services. He also plans employment terminations which will result in hundreds of public employee layoffs.
It appears that Governor Corbett has taken a page from the now 30-year old economic theory called trickle down. Originally, it was envisioned that this theory would create a rising standard of living for the middle class by allowing big business and those with the resources to proceed unencumbered; less regulation meant more free enterprise meant more money and opportunity for everyone. Unfortunately, the past 30 years has instead resulted in higher incomes for a very small percentage of Americans and a stagnation of the standard of living for working, middle class families.
Now, with governor Corbett's plan, the theory has come full circle. But in this case, the Governor's plan features the trickle down of the pain and suffering of sacrifice for the middle class. While state taxes may stay the same, local taxes will rise to cover the shortfall in funding, and/or jobs will be lost in many communities. Less jobs will mean less money to spend which means less goods and services being purchased which means less orders which means less need for employees. You get the picture.
Somewhere down the line, we, as taxpayers, will learn that voting for someone who pledges no new taxes will not necessarily result in no new taxes for the middle class. We never asked the governor elect how he was going to handle the $4 billion deficit so he never detailed his plan until elected. Now we get the details and are surprised that the tax burden will trickle down to the local level. That old saying, fool me once, shame on you, fool me twice (or over and over again) shame on me, comes to mind.
Tuesday, March 8, 2011
More on the Budget
I have spent some time reviewing various breakdowns (with accompanying opinions) of the proposed 2011 federal budget. The numbers are staggering but in a nutshell, there is about $2.5 trillion dollars expected in revenue with $3.8 trillion estimated for expenses. Quite a discrepancy!!
From what I can gather, slightly more than half of the revenue comes from income taxes, individual and corporate. Just under half comes from social security and other payroll taxes and the slight remainder (about $200 billion, or approx, 8%) comes from a small group of other sources.
Output is divided into discretionary (about 37%) and mandatory spending (the remaining 63%). In raw numbers, mandatory spending is $2.4 trillion. This means that we could have a budget surplus of about $100 billion if we only spent the money we had to and nothing else.
Unfortunately, the categories on the discretionary side of the ledger include the departments of Agriculture, Commerce, Education, Energy, Justice, State, Transportation, Treasury and Veterans Affairs, just to name a few. And, of course, the Department of Defense.
Clearly, the mandatory spending side of the issue needs to be addressed, and that includes Social Security, Medicare and Medicaid which account for $1.5 trillion. Until we see our elected representatives begin discussing these programs, all this "serious" talk about cutting funding for items like Planned Parenthood or the Corporation of Public Broadcasting is purely political bombast.
Think of it this way. Examination of your personal monthly budget reveals that after you pay your $1000 mortgage and $200 in utility bills, you have $60 left to eat and clothe yourself and family.
Serious problems need serious discussions. Too bad we aren't getting any, and shame on us for not demanding them.
Sunday, March 6, 2011
Its about revenue, stupid
Last weekend I was treated to a pretty pink and purple sunrise.
This past week, Monday I think, there was a moon rise very early in the AM. The moon was just a sliver and during the 15 minutes when it was low on the horizon, it was perched in the sky nearby a large point of light, probably a planet. The juxtaposition of the two was like something you would see on a SciFi movie about a far away world.
I have heard many a deficit hawk claim that our current budget deficit woes are about spending, spending, spending. Rep Ryan has emerged as one of the leading voices in this area and he has been quoted more than once as saying something to the effect that tax revenues are fine, it is the "out-of-control" spending that has created the fiscal mess we are in.
Perhaps.
I googled federal tax receipts and found that tax receipts for fiscal year 2009 (many Obama blamers forget that the federal budget runs from September through August so the 2009 budget was President Bush's last) were about the same as those for 2005. Clearly, the recession was in full bloom causing a backslide of tax receipts which was not matched by a similar reduction in spending. In retrospect, it is easy to see how devastating such a reduction would be and realize that very little could have been done to prevent it. (The 2009 deficit was $1.4 tillion by the way).
What President Bush started - a federal plan to bolster the economy via the TARP program, various bailouts for the automakers and Wall Street - President Obama continued via more bailouts for troubled industries and the stimulus program. As a result, the 2010 federal budget, still saddled with 2005 level receipts, saw an increase in spending over 2009 to create another $1.5 trillion deficit for the year.
UGH.
Clearly, we need to work towards bringing receipts and spending more in line. But to ignore the fact that tax receipts were reduced $400 billion from 2008 to 2009 (almost 20% less) ignores half of the budget deficit issue. Also, and it is certainly debatable, there are many economists who would say that the bailouts and additional spending that occurred in 2009 and 2010 prevented an even more severe recession. Again, it is hard to know what would have happened, but it is certainly conceivable that the current state of recovery would not be as far along as it is without the increased spending.
I have heard it said that President Reagan won the cold war by outspending the Soviet Union. A look at the federal budget numbers for his eight years in office reveal that there was a strain on our federal budget as well resulting in yearly federal budget deficits as well as a doubling of our national debt. If we assume it was money well spent then, why aren't we as willing to assume the current deficit spending is also worth while if it avoided a deeper recession?
Sometime soon, taxes will rise. History is clear; President Reagan's deficit spending spree resulted in higher taxes during his 2nd term and during that of the first President Bush. Rather than starting now, Congress and President Obama recently chose to extend the Bush era tax cuts, thereby increasing the deficit even more. Again, the idea is to get more money into the hands of the populace but the fact is, the debt will increase.
Lets reduce spending. But lets recognize that a deficit is the normal result of a recession. And lets also remember that how we reduce federal spending will reveal our priorities. We applaud the deficit spending which contributed to the decline of the Soviet nation. Will we be as eager to continue deficit spending if it helps fellow Americans stay in their homes, secure access to medical services, obtain medical coverage, afford higher education and place food on their tables?
Thursday, February 24, 2011
More on the budget
Facts that seem undeniable
- The federal work force is a bit over 2 million strong. That number is about the same as it was when Ronald Reagan was president. In fact, from what I could gather about actual federal workers, only President Clinton reduced the federal work force. Conversely, President Bush II, dramatically increased the federal work force after 9/11, most specifically in the creation of the new Homeland Security department which includes the actual personnel of that department as well as a huge number of civilian contractors. So, there are less federal workers per citizen today than there was 30 years ago.
- The federal work force is composed of a higher percentage of white collar positions held by higher educated staff. It appears that thousands of blue collar jobs have been privatized in the past decade leaving the work force overbalanced with what would normally constitute higher grade, higher pay employees. One could still argue that these individuals may be overpaid, but it might be fairer to compare them to similarly populated industries as opposed to the general work force in its entirety.
- There are about 100 million employees in the public sector. The loss of manufacturing jobs in the past 20 years along with the growth of the service industry means that there is a higher percentage of blue collar (which usually equates to lower compensation packages) jobs than before and a much higher percentage when compared to the federal work force as noted above.
- In general, it appears that high-skilled workers in government are slightly underpaid, lower-skilled workers are slightly overpaid relative to the private sector.
- Benefits accorded federal workers are clearly superior to those in the private sector, less so if you compare them to private sector employees earning $80000 a year or more, but clearly better than the average private industry worker many of whom have no benefits whatsoever.
- Federal workers at the top of the wage scale make less than their private-sector counterparts, while the reverse is true for those with entry-level jobs. An easy example would be the president himself and his cabinet when compared to the CEO and other top executives at any large corporation.
What seems lacking in almost every discussion and article I read is an understanding of why public sector pay has stagnated over the last 30 years. So many people seem eager to blame the overpaid federal workers but no one seems interested in examining why private industry has done little to improve the compensation of its employees yet at the same time, has lavished huge salaries, bonuses and golden parachutes on those at the top. Hmmm.
Another interesting tidbit I found was that congressional staff pay has increased faster than inflation in the recent past. In other words, the very same people who want to eliminate federal workers and reduce their pay have been very generous with our tax dollars to those that work for them.
All in all, it appears that the savings which will be netted from freezing federal workers pay will be about $1 billion a year. In the face of a $1 trillion deficit, we need to find 999 more of these type of savings. Again, we are playing around at the edges here.
Finally, why is it the federal workers, state workers and lately union workers that are being targeted by (mostly) Republican congressman, senators and governors. Freezing their wages, eliminating their jobs, questioning their work ethic is OK, but when someone asks for a few percentage points in extra taxes from the super rich or (gasp), a salary cap on compensation at the top of the wage scale, then that is called socialism.
To me, the average worker in this country should be outraged that fellow middle class workers are being blamed for the deficit. If these savings actually net that $1 billion amount, that means these overpaid workers account for 1/10 of 1% of the budget deficit yet that is the focus of all the talk. Why aren't we talking about the other 99.9% of the problem???
Monday, February 21, 2011
Deficit Components
A while back I saw a comedian, Dennis Miller I think, mention the national debt during his routine. He said what I believe reflects many people's thoughts, that the number is so big it is hard to get your head around it. I thought of that remark earlier today, and, in conjunction with all the doomsday rhetoric concerning the debt, I thought I would google "national debt" to see if I could get some data as to whom we owe this money. Do we owe the Japanese? Chinese? Australians?
Wikipedia detailed the debt in the following manner.
The national debt is broken down into two main categories:
1.Securities held by the public
Marketable securities
Non-marketable securities
2.Securities held by government accounts
It pegs the breakdown of these 2 categories as 60-40 where the 60% portion is held by the public. I think this means that 40% of the debt is held by one US government agency against another. For instance, the chart I saw showed that over $2 trillion was held by the Social Security Administration which I assume represents the amount of money that has been paid into Social Security by people over the years but not yet collected by retirees. Other agencies are listed as well. In effect, it sounds like we owe ourselves about 40% of the national debt. Which I guess also means that when we pay interest on this debt, we are paying ourselves as well. Interesting.
That leaves 60% owned by the public. Again, are they citizens of the United States, corporations, foreign governments?
Again, data was hard to decipher but it appears that about half of the "public" debt (which again is 60% of the total) was held by non-US citizens and institutions. Of this amount, about 66% was held by the central banks of these countries, in particular the central banks of Japan and China.
So, what does it all mean? I think it mainly means that the federal deficit is not a debt owed to people who are looking to bankrupt this country. I often hear some alarmists talk about the day when our debtors will "call our loans". As we live in a time of a global economy where all monies are tied together, I can not imagine the banks of the world deciding to foreclose on America as it would bring everyone down together. This seems true in light of the concern of countries like Greece and Ireland failing and all the effort extended to keep them afloat. Now times that by 1000 in regards to the United States.
But it also means that we cannot continue to forestall serious discussions about the debt. The problem is, you can't discuss something serious if you don't understand the problem, and if my experience today in trying to detail the minutia of the debt is typical, there are very few people who understand this topic. Unfortunately, there are many who are using the national debt for political gain regardless of whether they understand it, and in fact seem only interested in adding to the confusion about its true meaning as opposed to educating the people as to what it will take to reverse the process.
So, when you hear someone discussing the debt, listen for facts as opposed to opinions. You might find a dearth of one but a plethora of the latter yet it is the latter that seems to be driving the discussions.
Wednesday, February 16, 2011
The Budget Battle
Much warmer weather recently so I am hoping that this past Saturday was the last day I will see single digit temps on my car's outdoor thermometer. With the warming trend, I have seen groups of deer with multiple members. Whole families (extended families?) coming out to forage for newly uncovered grass. A few mornings ago, I had one individual deer run alongside my car for a brief few moments. I had slowed considerably fearing it would bolt across my path so it just seemed to pace me for those few seconds then stopped running altogether. Makes me wonder if there are daredevil deer who enjoy the rush of adrenaline just as some humans do.
A while back I had a conversation with a new acquaintance about federal spending. At the time, I mentioned that we spend over $800 billion a year on defense (that is 25% of our yearly budget), and that any serious attempt to balance the budget will require a hard look at this huge number. At the time, my new friend seemed surprised that we spent so much money in that way. Yesterday, I saw him again, and we spent some time discussing the President's proposed 2012 budget.
This time, his response to my question as to whether he saw confirmation that we are again allocating 25% of our expenditures to defense was that we should be spending that much money on defense (more if necessary to combat our enemies) and that we should stop spending money on education, community programs, etc, you know, all those liberal left wing areas.
Previous to that conversation, I read an interesting article in this past Sunday's Philadelphia Inquirer written by Harold Jackson. It addressed his belief that there is selfishness at work, especially among those in the upper income brackets, and that this "unsated selfishness" is driving the newly dominated Republican House of Representatives to target those programs designed to help the poor. Without saying it so abruptly, Mr Jackson intimated that not only are the Republicans who are led by the new "tea party" conservatives without compassion, that additionally their association with the conservative Christian right smacks of hypocrisy in the face of the teachings of Jesus Christ.
If you have read my blog in the past, you will probably conclude that I disagree with my new friends belief in high military spending and low domestic spending, and that I agree wholeheartedly with Harold Jackson's article. And you would be mostly right although not completely.
My sentiments aside, I truly feel that there is an unspoken viewpoint, one that represents many people's perspectives but which is unpublished and non-existent over our TV and radio waves because it reflects a position that does not believe one side or the other is completely right.
Being conservative and caring for the poor are not mutually exclusive attributes. There are certainly rich people who are selfish and uncaring. But the unwillingness to share is more the result of our society's obsession with material possessions rather than political affiliation. Taking care of ones own has mutated to ONLY taking care of ones own, and this attitude infects all economic strata of America. Perhaps we need to better flesh out our overall societal issues before accusing one side or the other of disdain for the needy.
Yet, I think most people disagree with those that claim that our federal dollars should not be spent on assisting the poor, who say that charity is the domain of the church and community, and that government assistance programs are veiled attempts to redistribute our country's wealth from the rich to the poor.
Yet is not our government based on that timeless document that begins "We the People..."? Aren't our elected officials tasked with spending taxpayer money as we the people direct them? Whether they spend it on assisting the poor or buying weapons, they represent us in their decisions. So, when your congressman or senator votes to spend your money in ways that do not reflect your desires, you have that most powerful of tools, the vote, to make your will known. Do you want your money spent in America or overseas? Do you want your money spent to help Americans or kill terrorists? As I said above, I believe that most people seek a balance between these and many other priorities. Perhaps in the next election cycle we should express those priorities in the voting booth at a rate greater than the paltry 40% that voted in the 2010 election.
And perhaps we need to remind our elected officials, both on the left and the right, that compromise is about finding common ground and then working as adults to fashion the best possible budget which reflects the best in our priorities.
Wednesday, February 9, 2011
Garden Revival
Speaking of attitude, this past week marked the 100th anniversary of the birth of Ronald Reagan. I have read a few articles about him in the last few days, both pro and con. First, to be honest, I was not a fan of President Reagan; didn't vote for him either time. The articles I read that agreed with my opinion, reminded the reader that he raised taxes multiple times, doubled the national debt, and began the trend called supply side economics (also called the trickle down theory) which I believe started the middle class's road to its current stagnating standard of living. Those articles that extolled his Presidency focused on his winning the cold war, but mostly emphasized the change of attitude that he brought to a country that was in dire need of uplifting.
It makes me wonder if that, ultimately, is how we currently elect our presidents. Who will make us feel more positive about today and the days ahead? Clearly, President Obama won that battle hands down over John McCain in 2008. Obama was younger, with fresh ideas and the energy of youth while McCain clearly represented the past in both his views and his age. So, where Reagan, to me, communicated a simplistic view of the world where good and evil were clearly defined, he also gave us an outlook that gave us hope for the future. In effect, Reagan was a successful president in one major area; the country felt better about itself and therefore began to move forward. Attitude!!
Don't get me wrong, we need more from our leaders than a smile and a happy face. But perhaps a little "the cup is half full", might be enough to energize our citizens to spend some money and our business community to hire some new employees. We need to get the cycle going again and perhaps a Reaganesque attitude will help prime the process.
Wednesday, February 2, 2011
Castaway and Cast Ahead
Neither rain nor snow nor sleet nor hail shall... Oh that's for postal workers, sorry.
This afternoon, I caught about an hour of the movie Castaway with Tom Hanks. (Talk about the maturation of an actor. Does anybody else remember him in the TV sitcom Bosom Buddies?) There is a scene where he realizes that he is finally leaving the island that was his home for over 4 years, and as the profile of the island begins to fade away, I thought I detected a note of nostalgia, or at least tenderness for the island. At that moment, rather than feeling animosity towards a place from which he felt trapped, he seems to be experiencing a fondness for his soon to be ex-home.
At least that is what I thought. And it reminded me of the current unrest in Egypt. I am certainly no expert on Egypt. But I do know that this is a country which has had the same leadership (Hosni Mubarak) for just about 30 years. A country that is unlike most of its Arab neighbors in that they do not exhibit an outward hatred towards Israel. A country that has been an ally of the United States, again, unlike many Arab nations. A country where religion does not drive its politics. In so many ways, it is a country with traits that are not only more like the western world, but which we wish other countries in that region would emulate.
Yet, many of its people are unhappy.
One has to wonder if, once Mubarak is out of power and a new leadership takes hold if some of these same protesters will look back at the last 30 years with a hint of wistfulness just as Tom Hanks did as his makeshift raft drifted out to sea. Will this truly mark a turning point in the history of the country and prove to be a step forward towards an even more free society? Will the grass be greener on the other side?
Most likely, the change will be neither all good or all bad. I guess that is what makes change so hard to undertake, both on an individual or group level.
As an individual, there are the inevitable questions as to whether the change was for the best or if the old ways would have worked out eventually. Or worse, the desire for the time before the change, whether that change was adulthood, marriage, parenthood or simply old age, can sometimes dominate one's thinking to the point that no experience of the present can match what has come before. Unfortunately, so many of those memories are filtered to remove the unpleasant aspects so that they may be comfortable, they do not reflect reality.
The same can be said for those wishing for a return to the old days, as it relates to the country. It reminds me of a cartoon I once saw where the father was walking through knee deep snow while he told his son that he remembered when the snow used to be chest high. Of course, looking at his son, we see that the snow is chest high on him. So, when you hear someone pining for the old days, ask them what specific time frame they pine for? Invariably, you will find that it was a time when they were children or young adults with little responsibilities.
So, to the people of Egypt, I wish good luck with this history making change. Let's hope that as they cast away the old regime, they are able to make their new vision come true. But don't be surprised if there are Egyptians who look back on the days of Mubarak's reign with nostalgia. Especially when that nostalgia is rooted in a perceived stability that can come from 30 years of the same leader.
