How Congress can cut spending

Line item expense reduction

Ronald Regan and Bill Clinton both asked for line item veto power in State of the Union addresses but the Supreme Court has ruled it unconstitutional because it circumvents a power vested in Congress. I suggest the concept should be used by Congress to decrease federal spending. Here’s how it might work:

Wire the House Chamber with “voting” buttons that will record each congress person’s vote. When a button is pushed by the congress person their vote is recorded and available to anyone to see so that a voter or a newspaper can easily find out how any individual has voted. The total is displayed in the Chamber at the time of the vote.

Both Houses of Congress meet together as for the State of the Union. They are informed beforehand on what will be voted on that day giving lobbyists and voters time to fill their ears with biased information or, less cynically, to inform themselves more fully on the issue. There will be no discussion or debate during the meeting. A question will be projected on a screen for all including the television cameras to see and then the vote will be taken. The results of the vote, totals, will be projected for all to see. Television pundits can comment to their audience.

An Example: Congress and the media are told the farm bill will be up for spending cut review in a week. On the fateful day Representative and Senators take their seats and log into the network that they are present. The issue flashes on the screen:

Crop Insurance

Over the past decade taxpayers have paid $59.5 billion

Your vote”

A.     no change

B.     eliminate for wealthiest farmers

C.     reduce premium subsidy

D.     eliminate federal subsidy of crop insurance

If the vote for A or D is 60% or more that vote carries. If B receives 41% or more another vote screen is displayed:

            Define “wealthiest farmers.

A.     grossing over $5 million annually

B.     grossing over $2.5 million annually

C.     grossing over $1 million annually

D.     grossing over $500,000 annually

If C receives 41% or more:

            Reduce premium from current 62% to:

A.     50 %

B.     40%

C.     25%

D.     10%

The congressional delegation from Rhode Island might vote to eliminate the subsidy while the delegation from Nebraska will most likely vote for no change. This system is far from perfect since lobbyists might well tell the Rhode Island folks that they will make a significant contribution to their campaigns if they vote no change. Perhaps we should allow them to vote for a secret vote. If the substantive vote was one their constituents, we the people, didn’t like, someone running against them would have them on record as voting for a secret vote.

This is a rough proposal with room for refinement but the basic idea is the best shot we have at making serious budget cuts. Both Republicans and Democrats have refused to get specific about budget cuts because any specific cuts will stir up a hive of reaction and no elected person wants to stick their hand in the hive.

I do think that corporate welfare could be cut without loosing votes--gross contributions from the corporations that now unduly influence our congresspeople but not votes. I would sure like to know if my congressional delegation voted to keep subsidizing Exxon just to name one of the very profitable companies our tax dollars subsidize.

http://articles.marketwatch.com/2012-12-18/commentary/35877237_1_corporate-welfare-cuts-tax-rates-budget-savings
            I invite refinement.

US debt, defict

A letter from my sister

A few weeks have passed since the election, and what is happening is all pretty boring.  I am getting turned off from politics.  All that hype about Benghazi and now Egypt and Syria…it is so depressing, in particular with regards to America becoming involved.  America has its own problems.  America is deeply in debt.  Why the hell does America have to lend money or provide military support to other countries unless we are OK ourselves?  Gosh darn, we are not OK!  Our debt is humungous!  Now as you know I don’t know anything about economics, but I simply cannot understand why the US for example continues to lend enormous amounts of money to other countries when we are in debt ourselves. It is just so disgusting, I am about to crawl back into my shell.

 Dear Sister Chris,

Unplugging the news is not a bad idea, especially if you are getting riled up. I did that for several years and it was great. However, if you want to stay in touch there are better sources than FOX news. If you can get the News Hour on public television or news on public radio, you will get a much more balanced and intelligent report. If not on television, I'm sure you can get them on the internet.
 

The debt is a problem. When George W. sent taxpayers back their money because, he said, it was our money and we should get it back, he should have used it to pay down a chunk of debt because the debt was ours too. At the time I commented that he was planning to destroy the government by starving it. Then came the wars, one with some justification the other for no reason than to further bankrupt the country. Then came the recession.

There is an interesting thing about the federal government. It makes money when people make money since it taxes income. Thus when someone buys a dinner at our restaurant, we pay income tax on what is left over after expenses. The expenses include buying food and booze and paying employees. The employees pay taxes on the money we give them as do the purveyors on the money we pay them and they in turn pay money to the people who supply them and so on. This is why stimulus programs, though turning up on the expense side of the ledger, make sense on the income side.

     I have been an advocate for getting out of debt for many years. I would love to see a balanced budget amendment but, if put into place without a long range (not too long) plan to reduce the current debt load, it would probably put us into a depression. A part of that plan needs to be putting money in the hands of people who will spend it because the more money changes hands the more revenue the country gets. That is part of the President’s plan (stimulus spending) Cutting government programs that put government workers out of work is recessionary. That is also part of the Presidents plan and the Republican; it better be balanced with stimulus which the Republican plan is not. Giving money to people who will spend it will help growth.
 

Whenever someone talks about cutting foreign aid as part of deficit control they are either stupid or blowing smoke. Write them off. The money we give to foreign countries is minuscule, less than 1% of the federal budget. I won't go into reasons for it as you can Google US foreign aid as percent of budget to find answers.

FOX again

            People who think FOX is “Fair and balanced” should not watch it because they will buy the distortions, inaccuracies and lies; but for those who know that this is entertainment, not news, it can be fun.

Lou Dobbs has his own show on FOX which I haven’t watched but he is frequently brought in to other shows for his political insight. A persistent theme on FOX is ridiculing Obama supporters for blaming Bush for all the problems of the past four years, especially the economy. It gave me a good laugh when he said last Friday that the economy is coming back because of the Bush tax cuts which President Obama wants to do away with. My initial bubble of mirth came from the hypocrisy that Bush should not be blamed for anything bad but he should be credited with anything good. Here is Lou blaming Obama for wanting to raise taxes on the wealthiest because their low taxes are the reason the economy is rebounding.

            That’s also funny because the tax cuts came in 2001 yet they somehow did nothing to avert the recession that began in December 2007 and by the time Obama took office unemployment was up to 7.8%. It had gone up steadily from 5% to 7.8% in Bush’s last year in office. Now, in November 2012 Lou, credits The Bush tax cuts with turning the recession around. I mean, come on, that’s funny.

            I recognize that saying the economy is “rebounding” is an overstatement since unemployment is really just back to where it was when Obama took office  but in the ensuing 4 years it got as high as the scary 10% figure.

            Since I do try to be fair I’ll tell you that unemployment in 2006 and 2007 was below 5%; so we could point to the tax cuts made 5 years before as being responsible for those two years. But then, again, unemployment when Bush was elected was 3.9%  (4.2% when he took office but I couldn’t resist mentioning that it was below 4% for the 4 months prior to his taking office and went above 5% for the four years after the tax cuts.

            I can hear Lou now, “Don’t confuse me with facts; my mind’s already made up.” That should be the FOX theme rather than fair and balanced.

Pity the Poor Rich

When my son was born we were living below the poverty level. I’m bragging because it was more or less intentional. I grew up lower middle-class (After my father left when I was 13 my mother went back to work as a teacher and raised me with no child support.) Currently my wife and I are middle to upper middle-class. When she wants to buy something that before our changed circumstances would have given me grief which I would pass on to her I now say, “No problem, we’re rich.” which she hates to hear me say.

Am I happier “rich” than poor? Not at all, in fact, I believe the years we lived below the poverty level were the happiest of my life. I believe the reason was that I was doing meaningful things: raising food for my family, cutting, splitting and carrying wood to keep us warm, making do on a shoe-string, fixing things that broke. I had occasional part-time jobs during that period but as a bartender, for example, making a good drink or making a customer laugh or getting a big tip did not provide much satisfaction. Earning enough money to pay for utilities, insurance and the like was necessary but didn’t have the same instant payback in satisfaction over an accomplishment as work around the farm had. Getting through a very busy shift in which I was so busy the time went by in a blur was satisfying, doing a good job perhaps better than most others could have done it, felt good; but so much of the job was, well, just a job, whereas fixing a leaking water pipe, rebuilding the mower carburetor, raising, slaughtering, and butchering the beef that would feed the family for a year, growing, harvesting, canning, pickling, freezing and otherwise storing enough vegetables and fruit to feed the family for a year; ahh, nothing I did before or have done since provided that kind of satisfaction.

The difference now? Someone comes and picks up my riding mower to perform annual maintenance and to fix anything that breaks. There is no pride in that. I tell myself I am providing work for others; my financial good fortune is trickling down and that’s a good thing, isn’t it? It’s good for the economy, right? Plumbing was my least favorite home maintenance job but I did it and though I hated squirming around in the crawl spaces under our house and hated it even more when I turned on the water and found that one of the joints I had soldered had a leak and I would have to drain the water and dry the pipe before I could try again; but when the joints were good I came close to doing cartwheels. Now we call a plumber.

I was healthier when we heated with wood. It was our only source of heat for 20 years. Carrying half a dozen armloads of wood in every day in the winter kept me fit during the time of year when there wasn’t a lot of exercise. We still have the stoves and a woodshed full of wood but we also have an oil burner. I don’t have to carry in wood all winter so I hardly do it at all. Burning oil doesn’t make me feel good but, what the hell, I’m rich. Do you think that is an excuse for lazy?

Perhaps my years below the poverty level helped me avoid ethical problems studies have found with the rich. 

Raise My Taxes, Please!

Dear Senator Snowe,
I just read the "Snowe Report" and I agree that the LIHEAP (Low Income Energy Assistance Program) should be funded at a higher rate than in the budget and that deficit reduction is important though the juxtaposition of these two statements in your report is a bit ironic, don't you think? Every spending program (like LIHEAP) is important to some people somewhere which is why spending cuts are so difficult.
There is one thing that the majority of people all across the country and in Maine agree upon as a deficit reduction measure yet you don't mention it. Why? Why don't you support raising the income tax on those of us who are doing well? The answer I keep hearing is that it will kill jobs, that the wealthy who create jobs will not bother to make more money and thus create more jobs if they are taxed too much. That is a bogus answer. We have had tremendous job losses under the low tax on the wealthy for 8 years running which should prove that argument to be spurious.
Did you know that the highest income tax bracket was over 90% throughout the decade of the 50s and that was a time when a family could be raised on one income. Perhaps the reason middle class people could get by on one income in that decade was because there was little incentive for entrepreneurs, business owners, corporate boards, bankers and the like to make gross amounts of money so they paid better wages and charged less for their products and services. That explanation, at least, makes a lot more sense than saying that taxing incomes over $250,000 will stifle job creation.

Dear President Obama

Dear President Obama,
You need to take a lesson from Ross Perot and make up some simple charts to help us understand government economics.
1. Budgets are balanced by taking in more money and/or spending less.
2. Your government gets money by taxing income so there are two ways to increase revenue, raise taxes and/or raise income. Let’s look at the two ends of the spectrum super rich and those near or below the poverty level.
3. Last year the median income for the top executives of the top 200 corporations was $10.8 million. There is only so much these people can spend even if they eat in the fanciest restaurants, buy yachts and cars and extra houses. They invest the rest. Investment in businesses that create jobs is a good thing. The stock market is getting closer to the record highs before the recession so you would think there would be more jobs. That hasn’t happened. Clearly taking money away from the super rich is not going to hurt job growth. We should raise their taxes.
4. Those near or below the poverty level will spend any money they can get their hands on for necessities like food and shelter. Cynics might say they will spend it on frivolous things like flat screen televisions but whatever they spend it on, it becomes income for someone else and that income is taxed. Let’s say they bought the TV, the people who sold the TV got money, the people who stored the TV got money, the people who imported the TV (this would be an even better example if the TV were made in the USA) got money and all of those people had income on which they paid taxes thus more money came into the government helping keep our national debt from getting even larger.
5. Did the stimulus package work? Absolutely. Without it unemployment would have gone over 10% and we would have gone into a depression. While it wasn’t enough to bring down the unemployment figure, it did keep it from getting much worse.
6. We would all like to see the federal government spend less BUT we need to be careful we don’t make the recession worse by taking money out of the economy where people will spend it. When we take jobs away from teachers, firefighters, police, and others employed by our towns, states and the federal government we are adding to the unemployment problem. When we take money out of the hands of people who will spend it because they need to in order to live we are also decreasing tax revenue.
These are simple facts, Mr. President. Explain them to the people. Maybe even Congress will understand. My senators, even though they are moderate republicans, won’t listen to us. If we are going to vote reasonable people into office, we need your help, dare I say leadership?

Hate to pay taxes? They have been around in various forms since the beginning of civilization. Those who point to a time when there were no taxes in the U.S are pointing to the beginning of the federal income tax. People have hated to pay taxes, tithes, duties, dues and the like to those in power (church, state, lord of the manor, etc.) also since the beginning of civilization.
There was a time when I hated to pay taxes. I would rail in frustration, “I’m working the first four months of the year for the government!” I got so worked up that I did something about it. I got my income tax burden down to nearly nothing. Steve Forbes, take note, here is how you can stop paying income tax. It’s really fairly simple and I found it very invigorating. They don’t tax income if you don’t have any. Of course in Mr. Forbes case he would have to give away about half a billion that is earning him income without his having to work for it but it would still be easier than being president which he has tried to do twice.
I no longer hate paying taxes though I’m now paying more than ever before. I’m paying more because my income is bigger but I’m still able to keep the taxes at a reasonable level by giving away some of my income. It feels good to be able to help others and to help with projects people are doing to protect or improve our environment. As for the taxes? I just gave myself an attitude change. Rather than feel bummed out about having Uncle Sam’s hand in my pocket I now feel good that I can be a part of all the good the country I love is able to do. Oh yeah, I can point to things my country is doing that I don’t think are good. The last “good war” (one I feel we were compelled to enter) was WWII. I also think there are things the federal government messes in that local governments and citizens could do better but if I get focused on the negative, I’ll loose my good feeling about paying taxes.

Dumb populace

10/19/10 In the news: French Pension Protests. Masked youths clashed with police officers and set fires in cities across France on Tuesday as protests against a proposed hike in the retirement age took an increasingly radical turn.
Idiots! Sure the government screwed up plus the baby boomers will be retiring very soon putting more pressure on retirement funds plus people are living longer putting more pressure on retirement funds and there will be fewer, percentage wise, people paying into the funds making the gap between what is available and what is required even wider; but, “Idiots, what is your solution to the problem? You just want to get yours even if it bankrupts the government? Open your foolish minds and try to help yourself and your countrymen (and women). Recognize the larger problem and say, ‘Yes, I want to be part of the solution.’”
Golly I really got wound up there. Thank goodness nothing like that will happen in this country. We aren’t just for ourselves and damn the rest of the population. We know that we will have to make sacrifices for the good of our country and our fellow citizens. We…. About now you should be wondering what drug I’m on because we, the majority of us, not you and I of course but the majority, will vote against any sensible way to save social security like making the retirement age older or even dispensing with cost of living increases. Some people are getting riled up because the cost of living hasn’t gone up so they aren’t getting an increase in their social security check.
We blame the politicians but we are the problem and the tea party solution of throwing the bums out is not the answer because if the new politicians want to be reelected, they will have to be bums. Several years ago a Maine representative the US Congress voted for closing a military base in Maine. It was the right vote for the good of the country. Usually the politicians work it out so that everyone can vote for the narrow interests of the state, take cover as it were, while others make the hard vote, though not hard for them because the vote doesn’t affect people in their state. This representative was slaughtered by his opponent in the next election on that one issue. Politicians are not as dumb as we may think. They just do things that are dumb for our country but smart in getting reelected by a dumb populace.

How to Curb Greed

When I ask people to name the best decade, the 50s are the most popular—the age of Leave it to Beaver, Father Knows Best and Ozzie and Harriet. I graduated from high school in 1956 and I certainly wouldn’t argue with that choice. What made it so good—family values, families with just one-wage earner, low taxes, low unemployment. One of the reasons I propose is not true. Family values is a subjective judgment though I suspect most would agree that “family values” were higher in the 50s than now. I can’t find statistics to back up my belief that the percentage of single-wage-earner households was higher in the 50s but it certainly was on television. There was low unemployment--the lowest average unemployment for the decade than any decade since (4.5%). The one that isn’t true is low taxes, at least for the wealthy. The highest tax bracket throughout the 50s was 91%. In fact, in all the years Americans have been taxed there were only two years, 1944 and 45, when there was a higher tax bracket.

I believe there is a direct correlation. The incentive to make millions of dollars when you are only allowed to keep 9% is much less than if you get to keep 65% as currently. Some corporate CEO who might today have gotten a 17 million dollar bonus, might, in the 50s, have said, “Never mind. A million is enough.” Where would the other $16,000,000 have gone? Maybe to share holders. Maybe to consumers of the produce the corporation produced. Either way it would spread the wealth around and make greed less likely.

There is no rational reason for making more than $1 million a year. Bring back the 91% tax on income over $1 million. For those who say that would slow recovery from the recession I suggest you go back to the unemployment table. The decade with the highest rate of unemployment was….can you guess? The 80s, of course. The average for the 80s was 7.27%. I guess there wasn’t enough trickling down. The most recent decade was 5.54%.