More Cliffs Ahead

          Ok, who’s sick of hearing about a financial cliff? That’s called consensus. The fiscal cliff bill made the Bush tax cuts permanent but raised taxes on ½ of one percent of the population. It is certainly a symbolic statement of equity for Main Street and Democrats. However, it may be a Pyrrhic victory as both sides are less likely to negotiate in the near future. In other words, less likely to go to work, i.e. govern. These days it’s all about ultimatums and winning for both sides. Most of the top 2% won. The White House & Congressional special interests received a stimulus, so they won. The American People, not so much. An unsavory bill all around. This bill represents everything wrong with Washington, all the dysfunction and missed opportunities.  

          What’s wrong with those dang politicans? Why won’t they represent the will of the People? They are. But the two Parties are in opposed gridlocked conflict. No, the two Parties are reflecting quite well the will of the American People. Both Parties want a large welfare state and not pay for it, regardless of their rhetoric. That IS the will of the People. When it’s said that social programs are “popular”, they are, as in “Get your Government hands off my Medicare”. The People DON’T want to sacrifice, suffer, or diet down to where they need to be. And ALL the politicians seem to be offering hot fudge sundae diets.

          So the rich get richer, Big Money makes the rules and runs the show, and Congress works very hard...to keep their jobs. That’s the way it is....that’s the way it’s always been, right?

          But didn’t the People clearly say in the last election that they wanted solutions and working together? Apparently not. Look who we elected. A billion dollars was wasted for things to stay the same. We send a mixed message because we have a mixed mind.

          Don’t believe me that BOTH sides want a big welfare state without paying for it? Medicare (actually the underlying out of control health care costs, which are a different animal) is unsustainable. Democrats don’t want to discuss it. Sounds like a bad marriage. The Republicans want tax cuts, certainly Keynesian and certainly irresponsible. If you’re serious about balancing the budget, you have to be serious about bringing more money in the door as well as reducing the use of the national credit card. That’s the not wanting to pay for it part. And Republican “spending cuts”? It seems that if the average Joe or poor people aren’t hurt by spending cuts, they’re not really spending cuts. There are billions in welfare cuts to special interests that can be made. “Defense” and “national security” are some of the fattest pigs at the trough. Domestic spending is a few percent of the budget. If you’re going to talk about cutting spending, get serious.

          During our next national fight, Republicans will squabble about not wanting to pay our national credit card bill, money they themselves spent. Sound nutty? Simple message: The People want a larger government than they want to pay for.

          You can see this same thinking disorder locally as well as nationally. We bitch about wanting better schools , but vote down funding for school districts. We want more firemen, policemen, and bridges that don’t collapse, but vote no to a tax raise for these services. We are psychosocially a house divided.    

          So those weary of cliffs are wandering around the wrong terrain. The recent trauma simply shows that our leaders are incapable of making hard and smart choices. It would be smart to go to work NOW on the next three cliffs, but everybody is dug in and trying to hurt the opposition. And the People end up the loser.

          This blog is about the long term challenge we face, the debt. Our leaders are dysfunctional drama queens unable to deal with our immediate challenges: (1) the debt ceiling, (2) the sequester, and (3) funding the Government. I point out that these guys dug these pits and created these problems themselves, because of gutless can kicking. All of these bills come due in March. Rather than Congress solving problems for the benefit of the People, what are they talking about? Drink a shot every time you hear the phrase “kill the hostage” on the news. See you at A.A. BTW, that hostage is you. The guys pulling the trigger already have cushy jobs , pensions and health care for life. And these geniuses just gave themselves a well deserved raise.

          Our nations short term challenges involve stimulus (aka investment in our country, not sustaining business as usual), growth and jobs. I usually spend a lot of time ranting in this short-term space. I often say that our problem with the national debt is not immediate. The reality is that it is not immediate, but is likely fatal down the road. We can currently easily pay the interest on the debt (around $300 billion) and nations are still throwing their money at us at the lowest borrowing rates in our history. We borrow currently at 40% lower than the time of the last predicted borrowing catastrophe, the last debt ceiling fight/S&P downgrade.

          However, all the partisan posturing is a waste of time. The size and scope of Government will have to be reduced, or revenues will have to be raised to pay for it. Hard choices about Medicare will have to be made. Hard choices about “defense” will have to be made. We should take a cue for The Donald and keep firing people until we discover those capable of making hard choices. The People should also make some hard choices and get their heads clear one way OR the other on the role of Government in our lives. Business as usual is unsustainable all around. We shouldn’t expect elected yahoos whose goal is keeping their jobs to have more clarity than we collectively do.  

          We need to also gain clarity and find people who can make smart choices as well. Certainly the smart thing to do is to means test the whole damn thing. Before you go after Granny, cut out waste, fraud and redundancy and you will bend several curves. Bear in mind you only need to reduce $4 trillion to bend the whole budget curve towards sustainability. Do you think there’s $4 trillion sloshing around a Government without authentic oversight? Do we really need still fund a global empire?

          Did the fiscal cliff bill end the conversation about tax reform? Seriously? Don’t we need to shrink our bijillion page special interest tax code? Don’t we need to rethink small business taxation? Don’t we need to seriously close corporate loopholes that keep corporate tax payments in the single digits, or not at all, or receiving subsidies while not paying taxes? I guess you have those three choices if you write the tax code.    

          Enough about these simple immediate and short-term challenges. The long term problem is the national debt. A few quick definitions to clarify terms: deficit (difference of what we take in to what we spend), Debt (the amount and interest put on the national credit card from the time of the nation’s founding).          The CBO keeps bitching about “unfunded” debt. Like high blood pressure, unfunded debt is the silent killer. This is debt that Congress spends (for those bitching about Obama spending money, Presidents don’t spend money) that is not reported on a budget. Most of what Congress spends is not reported on a budget. What is reported on a budget is very misleading. It would be like you diligently reporting the movie you just bought about horseracing onto your Quickbooks and then running out and buying a polo pony. Doesn’t benefit most people and probably not the smartest spending choice. Congress buys a lot of polo ponies.

          And ponies are expensive. The interest alone on the debt this year is $359,796,008,919.49. This will grow every year due to unreported spending and already made promises. What sort of things are unfunded and unreported? Our trillion dollar foreign adventures (do we still need an empire?), Medicare, Social Security, and the pensions of government workers are all off the books pre-promised obligations. Polo anyone?

          According to the House Ways and Means Committee figures (not in the actual budget if we actually had a budget, we don’t), the actual annual cost of Medicare and Social Security alone is $7 trillion. So gee, that’s very different from the numbers officially reported. Good rule of thumb, whenever you see an “official” figure for the national deficit (how much we’re really paying out versus what we take in), it’s about 1/5 of the actual amount being payed out.

          So I seem to be picking on Medicare and Social Security. Why are these two programs unsustainable? Health care/insurance costs continue to escalate. The population continues to age. The number of workers in the workforce is declining.100% of payroll taxes are used to pay into the current years bills of these two programs. So we’re losing money every year. Make sense?

          But rising costs and an aging population are fraying the social safety net across the board. The FHA last year faced a $16.3 billion deficit, the first in its history. The Disability Insurance trust fund will be depleted by 2016.

          The main problem with massive unfunded debt is that it is invisible. It’s off the books and off the radar. Can this trend be reversed? Not with current thinking. The Republicans can’t cut enough discretionary spending and hurt enough average Joes to fix the budget problem. Democrats can’t arrange the deck chairs on the Medicare Titanic and unpromise what has been promised.    Can we reform this budget mess? The Government has probably gotten too big, spent too much for too long, wasted too much, and promised too much to “reform”. So probably not.

          A different way forward will involve moving beyond stale 20th Century thinking. It will involve authentic honesty and authentic leadership that lays the authentic problems out to the People. The People will have to grow up and help their representatives make tough choices for the benefit of all. Without honesty, leadership, shared sacrifice and tough choices, it is unlikely that business as usual can be sustained. It is unlikely that doing nothing can be sustained. The debt to GDP (& interest) will continue to rise until the whole thing implodes.

          If we just keep on trying to do business as usual (personally and nationally) we’ll be a nation in decline. We will be a very large plane spinning out of control. We have flown very high and will have a very long way to fall. But the end of the story won’t be happily ever after. Time to wake up the pilots.

                   And here you thought that a fiscal cliff fight affecting .05 percent of the population was exhausting.

A Look Back 2012

          Historians look for things called inflection points. Inflection points are moments in time when events occurred or could have occurred that significantly impact the future. Inflection points also reflect shifts in national conversation and consciousness. This blog speculates on what inflection points future historians will note for the year 2012.

      

Climate Change

          it is likely that the most crucial inflection point in 2012 involves climate change. Sandy shifted the national conversation about climate change from the theoretical to the experiential. A few weeks ago, a UN study of the latest climate data concluded that we have passed the tipping point, that point of no return where global temperatures will rise on their own, polar ice will melt, and sea levels will rise precipitously over the next 50 years. Let us pray to St. Gore for mercy.

          I have for some time been curious about what conditions specifically constitute a tipping point. This is the first report I have seen which provided this answer. The tipping point occurs when global temperatures (land and particularly sea) rise by 3.6°F. Global temperatures have risen more than 2° since St. Gore descended on his aerial lift to prophesy climate change doom.

          The causal link between temperature rise and human carbon emissions remains unclear. However, it may be wise to cut back on the emitting. Humanity pumped out 400% higher CO2 levels in 2011 than many climate change models predicted. The world will try again in a few years to craft a global treaty curbing carbon emissions. A few more Sandy's might get the US to that table.

          Political extremists are fixated on the onerous debt burden that will be borne by future generations. These folks believe that debt is bad but deny the reality of climate change. Let us pray that they are correct. If Gramps could have taken actions that position future generations at the low end of of the disaster prediction scale, and didn't take such action, or didn't believe in such action, future generations will be pissed off at far more than owing a few bucks to the Chinese.

Gun Regulation

          Mass shootings and public tragedies have in the past produced little social change or political traction for authentic gun regulation. Guns, like booze, are part of our national heritage and identity. However, recent tragedies are shifting the national conversation towards “common sense” gun regulation.

          Like many problems our nation faces, gun violence is very complex. With some interest, I have listened to recent proposals to curb gun violence. These proposals have made little practical sense to me.

          We need another ban on assault weapons. I note that assault weapons are merely cosmetically different from hunting rifles. Connecticut already has a ban on assault weapons. The recent shootings were not conducted with assault weapons. No assault weapons were needed for the assassination of the Kennedys and MLK.

          Put metal detectors in all schools. Schools already look like factories. Should they look more like airports? I note that the pistol used in Connecticut was plastic and designed to go through a metal detector. They catch guns at the airport using x-ray machines, not metal detectors.

          Gun violence is a mental health issue. A nutty person with the gun is indeed a problem. However, the shooters in recent years do not fit a predictable psychological profile which deviates significantly from the American population. Perhaps the American population is a bit nutty. If you could identify someone who would potentially harm others, it's currently against the law to lock them up. Some states have laws which allow such people to be locked up. People are not locked up, even those requesting treatment, because the laws controversially restrict civil liberty. People also are not being locked up or receiving treatment because states with such laws don't fund the mental health system. You get what you pay for.

          Destigmatize mental health treatment. It’s a social norm. Good luck with that.

          Put armed guards in every school. We got a new sheriff in town, little pardner. I point out that school districts can't fund teachers, much less a gun packing doughnut-eater who sits around all day to give more peace of mind to little Johnny's helicopter mama. Columbine had an armed guard on duty.

          Violence in entertainment and pop-culture makes our society more violent. Most of the industrial world has the same entertainment culture as our own. We differentiate ourselves by incorporating gun violence into our national identity, who we are as a people. England has exactly the same entertainment influences as we do, but has only a few dozen firearm homicides a year. Japan has a much more violent pop and entertainment culture than our own, but has less than a dozen firearm deaths per year. This is also true in China, which has a bijillion people.

          Limit clip size and ammunition capacity. Seems sensible to me.

If six shots was good enough for Billy the Kid, it should be good enough for modern looney-toons as well. Let's hope that bad guys don't get hold of a Lone Ranger sixgun, which fires 80 shots without reloading.

          We need more identity checks and regulation of secondary markets. This also sounds reasonable to me. Limiting access of criminals, the insane, and terrorists to one gun a month just makes sense. But it may be bad for business.

          So why does England, Japan, bijillion people China, and pretty much any other industrialized country have a much lower rate of firearm murders? The rest of the industrialized world limit private access and ownership of guns. Not having access to guns doesn't slow down murderous looney toons, however. On the day of the Connecticut school shooting, a wacko with a knife attacked schoolchildren in China. He stabbed many children, but none of them died. The wacko was shot by police. School stabbings also occurred recently in Russia and Europe.

          Limiting private ownership of guns is not an option in the US. Guns are part of our national identity. We are a nation awash in guns. Nearly half a million guns were sold on Black Friday alone. Just talking about any type of ban clears out the gun store inventory. The US has 5% of the world's population and 50% of the world's guns. After the Cold War, the Maj. General in charge of the KGB admitted that invasion of the United States was never entertained because of the number of guns in private hands. People terrified of a government seizure of their gun collection should take comfort from that fact. Ain’t gonna happen.

          Other countries think of guns differently than we do in the US. For our great love of guns, we have quite an adolescent, irresponsible view of them. Other nations view guns much more responsibly. Rural England has many firearms but almost no firearm homicides. Pretty much every household in Israel has an automatic weapon, but are quite responsible in their use.

          Recent tragedies may provide an inflection point to the conversation and legislation of gun violence. However, until we explore and assess the relationship of guns to who we are as a people, such tragedies are likely to recur.

Political Trends

          Several emerging political trends were seen in 2012. The introduction of social media and multiplatform monitoring shifted the electorate from passive observers to active participants. Expect this major trend to transform the political landscape.

          The last election revealed the naked avarice of Big Money as unrestrained billionaires attempted to promote personal political ideologies and agendas. It is surprising relative to return on investment how little traction Big Money had on electoral results. $1 billion was wasted as little change was seen on the political chessboard. What benefits could $1 billion have provided for our country, or is that communist thinking?

          The electorate trended towards moderation and extremist positions lost ground. The transformative influence of minorities and diverse demographics increased. The impact of the conjuncture between statistical analysis and information technology was at its infancy but will doubtlessly redefine future political contests.

Cultural Shifts

          2012 revealed many cultural shifts occurring within the US population. Main Street political thought appeared more centrist and progressive. For the first time, popular votes affirmed gay marriage and the legalization of marijuana. California voters gave themselves a tax increase. Pigs should start flying anytime now.

Global Trends

          in the Middle East, populations continued to struggle for political self-determination. The Syrian Civil War and the Egyptian elections are both examples of popular self-expression. It is interesting to note that modern Islamic political thought had its orgins in Egypt, and Egypt remains a crucible of regional political evolution.

          A quiet, but I think quite important event, was the debut of Chinese space flight. A space program is a long-term commitment to becoming a global superpower. Political scientists understand that to be a superpower, the people of the nation must see themselves as a superpower and desire to be a superpower. The national identity of China is still emerging.

          North Korea successfully launched an ICBM. This may turn out to be a very dark inflection point indeed.

 

          So these are some of the major inflection points I observed in 2012. Future historians will also no doubt note that the world did not and in December of that year.