Fareed Zakaria's article in November 15, 2010 edition of Time Magazine served to remind me of the consequences of past Republican legislatures on the economy. First, there was the Reagan administration. Because congressional Republicans "never went along with efforts to cut government spending . . .deficits exploded." Lets not forget the Clinton/Gingrich years. "[T]he surpluses were created in large part because Clinton raised taxes in his first year, something every congressional Republican voted against." Far worse was the most recent ex-inhabitants of the torch of power, Bush/Cheney. The result of this dynamic duo "was the most reckless expansion of government spending and debt in two generations."
Yet, we are all suppose to be resting easy now that the Republicans are back in power? "[W]hen asked how they will close the deficit, most explain they will cut taxes -- which will only reduce government revenues further and increase the debt." We are going to be in for a bumpy ride.
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In the same issue as the above discussed article, there is a story titled "Mr. Speaker, by Michael Grunwald and Jay Newton-Small. It is a brief biography about the new Speaker of the House of Representatives, John Boehner. In a section entitled "Meet your Speaker," this depressing, but not surprising, information appears:
"There's nothing mysterious about Boehner's plans as Speaker...The GOP's new Pledge to America...is vague but blunt: more tax cuts, less regulation, more drilling, less spending in the abstract and a rollback of just about everything Obama has done....[W]hen a TIME reporter pressed him about how he could solve the nation's debt crisis while slashing taxes and not touching entitlements or the military, he fell back on generalities about controlling spending and getting Americans working again." (Page 33)
After reading the entire article, I have formulated the opinion that Mr. Boehner seems like a logical, hard-working politician who doesn't play games, and has a survivalist mentality. I respect these qualities, but do not appreciate his inability to answer a question he had to know he was possibly going to have to face for real, if the Republicans took the House. Well, as it turns out they did, and the hypothetical is reality. Sadly, I have little faith the new leadership will be any different from the last (or the rest that I have lived through, for that matter.)
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2/22/2011
The left is freaking out over Wisconsin (CNN, by John Avlon, 2/22/2011)
The above linked opinion piece hit the nail on the head in so many ways. Here are just a few John Avlon quotes that I wish I could say I wrote myself because they are so good:
"States around the nation are wrestling with massive budget deficits -- and most of them stem significantly from public sector pension obligations. Walker campaigned on a commitment to confront the public sector expenses and the voters in traditionally liberal Wisconsin endorsed that agenda."
I think this point is too-often overlooked. Wisconsin voters asked for change, and are not willing to swallow the pill they requested. When we hear our politicians say that everyone is going to have to sacrifice, and that the next several years are going to be tough, we all nod our heads, but secretly think its going to be the next guy that suffers. When faced with the reality that all of us are going to have to give a little, even those who have historically been exempt,folks start freaking!
Avlon also understands the flaw inherent in the power of unions in America:
"Walker is taking aim at the underlying problem: collective bargaining and union 'check-offs' that create a vicious cycle of taxpayer subsidized partisan politics and labor deals that pass the buck to the next generation. . . For example, among their largest donors most election cycles are teachers unions -- and that money was essentially recycled taxpayer dollars, filtered through the union via an automatic paycheck deduction and then given to the Democratic Party."
Avlon couldn't be more right. Given our economic crunch, it has become apparent that this cyclical funneling of tax payer funds cannot be sustained. So, when you hear that Wisconsin teachers are willing to negotiate on everything except their unions powers you need to understand this: the "everything else" they are willing to negotiate on will just be re-written to their liking by the union in a couple months. Without a change to how the unions operate, nothing else matters.
Old, bad habits die hard. But, I do not feel sorry for the public sector employees who thought their jobs were so special and different from private sector jobs, that they didn't feel the need to contribute to their own retirement. It is just hard for those of us who have been living on nip-and-tucked paychecks forever to feel much sympathy.
But, as Avlon points out, "[I]f you were offended by one, but cheering the other, you're part of the problem -- an atmosphere of hyperpartisanship in which extremes on both sides of the political spectrum act like wingnuts crying wolf." Oh well.
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2/22/2011
Wisconsin risks losing its best public employees (by Andrew Reschovsky, 2/22/2011)
To be fair, I thought I would respond to someone who disagrees with me. Mr. Reschovsky's piece was listed directly under Mr. Avlon's, so I chose it at random. Turns out that I found several points worth responding too.
First, the author claims that teachers, and other top public employees will leave Wisconsin if this bill passes. I call your bluff on this one, Mr. Reschovsky. There are no jobs anywhere else for these defectors to run too, and even if there were, most cannot afford two mortgages. Due to the burst housing bubble and the inability to sell current dwellings, moving to find new employment is almost impossible. Furthermore, the places these people would move too are facing the same budget crisis!
Mr. Reschovsky also writes:
"The state has a wide range of options available for closing this year's relatively small fiscal year 2011 budget gap. Additional revenue could be raised by eliminating any of a large number of exemptions, deductions or exclusions from the Wisconsin tax system. Fees, underused in Wisconsin, could be raised. Funds could be transferred into the general fund. Funds that have been appropriated, but not yet spent this fiscal year, could be recaptured."
The problem with these ideas are that they are short-term solutions that do nothing to address the underlying problem. Instead of pushing all the pain on future generations, Mr. Walker is trying to start fixing the problem now, at its core.
Mr. Reschovsky goes on to argue that Wisconsin teachers are underpaid; 5% below the national average to be exact. Therefore, Wisconsin's budget woes could not possibly be their fault. My reply to this is twofold. First, I lived in Wisconsin for the first half of my life, and still have family there. I know that the cost of living is also at least 5% below the national average.
Second, correlating the two (lower wages and budget gaps) doesn't make sense. Mr. Reschovsky writes "Wisconsin's fiscal problems cannot be attributed to excessive employee compensation." Nobody is claiming their excessive pay is causing the crisis. What Governor Walker and other fiscally conservative folks like me ARE saying is that public employees lack of contribution into their own future, and health care, is unsustainable. It is not THEE problem, but one of many that must be addressed to balance the books.
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2/25/2011
Providence, RI teachers get pink slips, but remain on job (CNN, 2/25/2011)
It's not just states in the Midwest that are facing daunting budget shortfalls that will impact education. Providence Mayor Angel Tavares backed the move to hand out warnings to all teachers that their job may be terminated upon completion of this school year.
Why give everyone a pink slip and put educators even more on edge in these tough times? Because later on, when cuts do need to be made, any teacher who did not receive the proper warning slip by March 1 cannot be cut. I am sure this is due to some Union by-law. So, instead of being mad at your city government for the pink slips coming out early and possibly unnecessarily blame your Union for setting up the loophole to begin with!
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3/5
The Real Stakes in Wisconsin (TIME, by Mike Murphy, 3/14/2011)
Finally, someone who gets it! When I read the above article by Mike Murphy about the battle between governor Scott Walker of WI and public employees, I almost bounced out of bed last night. Everyone else beats around the bush, or fails to see the true consequences of what is at stake in Wisconsin, and ultimately across the nation. But Mr. Murphy hits the nail on the head so many times, this article should be put up for a Pulitzer. Unfortunately, it is buried amidst a ton of other content online. But, it did appear in my paper copy of the magazine, so hopefully some folks read it and get that "light bulb" moment. I'm not even going to bother to pull quotes. This is one of those articles you need to read in its concise entirety. Click on the above link, I implore you!
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3/5
U.S. Decline in Global Arena: Is America's Best Days Behind Us? (TIME.com, by Fareed Zakaria)
"We are cutting investments and subsidizing consumption -- the exact opposite of what are the main drivers of economic growth."
This sentiment is what frustrates me most about the facade that is suppose to be reform going on in our Congress.
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3/9
"No Way Out" of Debt trap, Gross says (Yahoo Finance, by Stacy Curtin, 3/8/2011)
The above linked article may make you feel like doomsday is around the corner. Unfortunately, I think Mr. Gross is right. For many Americans, myself included, major cuts to entitlements, the end of the mortgage credit, and increased health care costs will be the holy trinity that ruins our current standard of living. Learning to live on thousands of dollars less per month will not only be hard for many Americans, it will be downright impossible. I predict two generations from now, our domestic situation will resemble that in Mexico and Africa: family units will have to combine just to get by. The creation of these extended families is going to leave even more homes vacant, creating ghost towns across America. I figured as long as I found an article that told it like it was, not sparing the reader the truth regarding our financial future, I would follow-up with my predictions on how this will alter the landscape of the country.
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3/28
If there is 'no' inflation, why are Medicare premiums going up? (Chicago Sun-Times, 3/28/2011)
The above linked article examines the apparent hypocrisy of the government in relation to three specific areas: healthcare, housing, and education. The analysis is sound, and I agree with the author's sentiments. However, this sentence near the end made me take a moment to reflect on the situation:
"Those who price the 'product' don’t live in the real world where ordinary people have to make tradeoffs."
Obviously, I thought to myself. Then I really thought about what I was thinking. The people balancing the budgets at universities, looking at the anticipated increases in health care costs for Medicare, and calculating the needs of local governments via property taxes all have one thing in common: they live in the world of data. All they see is the numbers. We, as Americans, should all be getting use to this by now. In accepting a capitalistic society, and the type of democracy that evolves as a result, we don't really have much choice. The numbers are always the bottom line. And they always seem to have a dollar sign in front of them
In fact, most of the people who "price the product" do live in the same, "real" world as you or I. But, in a country where money matters, and the numbers don't lie, the folks handing off their estimates and calculations to those in charge of implementation have little choice in how the cards fall. Formulas have long been established, and it doesn't take long for today's computers to plug and chug out the results.
As an ex-data analyst, I can attest to this. Though I knew the industry I worked in was raking in the big bucks, there was little I could do to atone for their over-indulgences when I was asked to analyze a correlating, but not causal, portion of the business. I believe our budget-writers and county and state accountants probably feel the same way I did back then. Used, abused, and embarrassed to be associated with the entire mess.
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6/14
"There are nearly 2,000 federal .gov domains, according to the White House. Under many of these domains are smaller sites that result in an estimated 24,000 websites, and the White House said the redundancy creates confusion and wastes money." (Desert tortoise comes under fire from 'Sheriff' Biden)
The above statistic makes me angry. But what truly infuriates me is how politicians will use an example like a federally funded turtle website to make it seem like they are actually making a dent in the debt we have accumulated. I'm not saying not to eradicate these silly websites, or at least put them in the hands of the private sector. However, the politicians should be honest about what a miniscule slice of the pie these kinds of programs account for.
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6/18
One of the biggest headlines yesterday involved the advocacy group AARP. Their stance on Social Security may be changing, and seniors don't like it. For the first time in decades, AARP is facing the fact that the current Social Security system is insolvent, and needs to change. Their proposition would protect seniors living today, but would involve cuts in benefits to the elderly of tomorrow.
Talk about passing the buck! In my mind, that is like giving the guilty over-spenders a pat on the back, while the younger generations, already facing many more obstacles than their parents, will be forced to suffer.
I am not against cuts. I just think we should all share the burden equally. There should be no grandfathering in phase. Today's retirees already have pensions, something a vast majority of Americans working now will never receive. We will be forced to live on whatever we can save, without the perk of healthcare coverage from our old employers.
Therefore, I think it is reasonable to make everyone suffer, even current Social Security beneficiaries. Yes, there will be pain. Yes, it will be hard. But it is not fair for the elderly to ask younger Americans to bear that burden alone. Indeed, I feel it is anti-paternalistic and greedy.
I commend AARP for finally facing reality, and hope they stick to their guns on this issue.
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