DEBT: Coming to a Generation Near You!

I write this blog after reading the TIME magazine article “How to Tame the Deficit” by Jeffrey D. Sachs. Many of the statistics used in this blog come directly from his article and my opinions and ideas were heavily shaped by reading it. Here is the link to the original article.

The American economy is on the brink of ruin. A demographic tsunami of retired baby boomers supported by a smaller workforce, a second housing crisis set to detonate in 2011-2012 (altay and option-arm loans set to cause 8 million defaults), a huge trade imbalance with countries like China, and a debt that takes up 60% of the U.S. GDP have formed into a large freight train ready to cream Uncle Sam as he attempts to pick himself up. What do the politicians of America say to do? The same two things as always: cut taxes and spend more. The ironic thing is this is exactly what Congress and President Obama have done. The Republicans got their tax cuts and the Democrats got more spending, so who’s mad? The American people should be. How is it possible to reduce government income and increase government expenditures and expect anything but debt? The answer is: you can’t.

Ask a Republican about debt and they’ll say it’s the Democrats’ fault for increasing social expenditures. Ask a Democrat and they’ll say it’s the Republicans’ fault for cutting taxes on wealthy individuals and corporate profits (in addition to spending on the Iraq war). Yet both are at fault. Currently the United States government collects only 17% of GDP through taxes. That accounts for spending on four government programs. 5% of GDP goes to military, 5% goes to health (Medicare and Medicaid), 5% goes to Social Security, and 2% goes to paying interest on the national debt. There goes your 17%.

Now here is a list of programs that need are not paid for at current tax levels:

· Homeland Security

· Unemployment Compensation

· Job Training

· Support for State and Local governments

· Federal higher-education outlays

· Satellites

· Manned Space Missions

· The National Science Foundation

· The National Institutes of Health

· The National Oceanic and Atmospheric Administration

· Community Development

· Food Stamps

· Low-costing Housing

· Roads and Bridges

· Environmental Protection and Conservation

· Emergency Relief and Reconstruction (like Hurricane Katrina aid)

· Judicial and Penal systems

· International Diplomacy

· Poverty Reduction

· Renewable Energy

These are fundamental services provided by the government: a judicial system, border-patrol, environmental clean-up, food stamps, and unemployment aid. These fundamental services are being paid for by loans from China; this is not really a good government policy. So now, there is no question as to why America is in debt up to our eye-balls and sinking rapidly: we spend too much and tax too little. It is true that the United States has been more indebted in the past, during the mid-1940s debt exceeded 100% of GDP, the difference is we were in a world war and eliminated the debt by way of American tanks and American taxes. Now, American tanks no longer seem a viable option. Nevertheless, American taxes are part of the solution that will end our spiraling deficits and spiraling debt.

Some would argue that we need only to cut spending and wasteful earmarks to solve our problems. Look at long list above and pick what to cut first; not too many good options. It is true that government can spend less on certain programs and spend more efficiently on others. Military spending can be reduced by eliminating wasteful defense projects, like Post Cold-War Top Gun fighter jets, and slashing pay to overpriced defense contractors. Yet government outlay on military spending remains 6 times larger than the outlay on education. Earmarks are great campaign scapegoats, labeled as “wasteful government spending”, but only account for less than 1% of the annual national deficit.

The solution to America’s national debt is either reduce government spending on entitlements or increase taxes. Frankly, someone needs to bite the bullet and tell the American people the way it is: taxes need to be higher, way higher, or entitlements must be reduced. As for entitlements, Americans must learn to live with smaller social security checks or hope that my generation makes a lot of money to support the baby boomers. It seems unlikely that major cuts in entitlements are means justified by their ends: less funding for troops, the poor, and the elderly seem like bad ideas that will reduce the debt at the cost of making the nation as a whole worse off. As for taxes, the total take of American governmental revenue (federal, local, and state) accounts to 28%-30% of GDP; this is 10% less than the average European total revenue. The programs listed earlier in this blog post need to be funded. They account for 11% of GDP, a percentage we currently borrow from China only to pay interest on later. The United States government could at least increase taxes on all but the extremely poor, by an extra 10% of GDP.

Bottom line: The U.S. Government needs to become more efficient with its spending, but TAXES MUST BE HIGHER TO PROVIDE 330 MILLION PEOPLE WITH THE FUNDAMENTAL SERVICES PROVIDED BY A GOOD GOVERNMENT.

But the real question is: who in their right mind would use this as a campaign slogan?

Number of Bills Sponsored

While I was doing research for my last paper, I looked up the bills that my Congressman, David Dreier [R-CA-26], was head sponsoring in this current session of Congress. He is sponsoring a total of 9. At first I thought, "Wow. This Guy is not doing very much. He is only trying to pass 9 bills." This makes sense when one thinks of the thousands of bills that are proposed each session of Congress. I looked up six other random members of Congress to see how many bills they were proposing this session. On the lowest end, Nancy Pelosi [D-CA-8] and John Boehner [R-OH-8] each were proposing 12 bills. Then Louie Gohmert [R-TX-1] was sponsoring 13 of his own. Then came Neil Abercrombie [D-HI-1] with 20, John Campbell [R-CA-48] with 23, and Barney Frank [D-MA-4] with 46 of his own. All six of these members of Congress come out to averaging a head-sponsorship of 21 bills each in this current session of Congress. That's 12 more than my Congressman, David Dreier. I realized that this is probobly not a case of laziness by an incumbent, but that it is actually a plus. To only introduce a small number of bills compared to the average, you are able to focus more of your efforts, time, and resources to securing the passage of those. I'm sure that Barney Frank, if he is taking an active role in securing the passage of his 46 bills, has his plate too full and his work cut out for him. David Dreier, on the other hand, is able to focus on passing bills only for the topics that are the most important to him and his constituents. More members of Congress should think about trimming the amount of societal "good" they are trying to do and focus their efforts on passing less, but more effective legislation.

Financial Reform

Does anyone sympathize with the "fat cats?" After we all watched Wall Street dig an economic ditch for our country, the answer is "no." This spring, Senate Democrats will look to take advantage of the public's negative attitudes by proposing a strong financial reform bill. With only 59 seats in the senate, Democrats will need some bipartisan support. Though house and senate Republicans have opposed most liberal legislation since Obama took office, it will be a tough political stance to oppose fairly strict regulations on Wall Street. If Republicans vote to pass the bill, Democrats get what they want. If Republicans oppose the bill, Democrats get what they want. Since voters won't be happy with a party that wants to keep finance on Wall Street the way it has been (disastrous), Republicans might be forced by public opinion to pass the bill. So whether or not Democrats pass their liberal legislation, they will benefit either by policy or by the upcoming midterm elections.

Presidency I

Congressional powers in Article I

• Presidential powers in Article II
• Prerogative power and the oath
• Reprieves and pardons
• Treaties
• Appointments and recess appointments

Washington

FDR

Congress II

BLOG!!!!

• A Blogger tutorial.
• Posting video to Blogger
• Posting images to Blogger

Congress and the New Media

• House Hub and House homepage
• Senate Hub and Senate homepage

Motives of members

• Reelection
• Power
• Policy

Federalist 57:

[The] House of Representatives is so constituted as to support in the members an habitual recollection of their dependence on the people. Before the sentiments impressed on their minds by the mode of their elevation can be effaced by the exercise of power, they will be compelled to anticipate the moment when their power is to cease, when their exercise of it is to be reviewed, and when they must descend to the level from which they were raised; there forever to remain unless a faithful discharge of their trust shall have established their title to a renewal of it. I will add, as a fifth circumstance in the situation of the House of Representatives, restraining them from oppressive measures, that they can make no law which will not have its full operation on themselves and their friends, as well as on the great mass of the society.

Federalist 63 on continuity and the Senate:

Yet however requisite a sense of national character may be, it is evident that it can never be sufficiently possessed by a numerous and changeable body. It can only be found in a number so small that a sensible degree of the praise and blame of public measures may be the portion of each individual; or in an assembly so durably invested with public trust, that the pride and consequence of its members may be sensibly incorporated with the reputation and prosperity of the community.

Tocqueville:

When you enter the House of Representatives in Washington, you feel yourself struck by the vulgar aspect of this great assembly. Often the eye seeks in vain for a celebrated man within it. Almost all its members are obscure persons, whose name furnishes no image to one’s thought. They are, for the most part, village attorneys, or those in trade. . . . In a country where instruction is almost universally widespread, it is said that the people’s representatives do not always know how to write correctly.

Characteristics of members

Congressional powers in Article I

Congress I

The official version

Introducing a bill:

Congressional Staffer Salary

Last week, Politico reported, “Nearly 2,000 House of Representative staffers pulled down six-figure salaries in 2009, including 43 staffers who earned the maximum $172,50.” This number has outraged some, especially those on the right, because the economy still hasn’t picked up and the unemployment rate is still a very high 9.7%.

Reading the textbook and hearing the lectures on the role of the Congressional staffer, I am almost inclined to think some staffers should be paid more than their congressmen. Mainly through ignorance, I think the public has a misconception of how essential the average staffer is to Congress. Without their staff, members of congress would be sloppy, unprepared, and overworked. As the textbook states, “No responsibility of congressional staff is more important than helping the elected members pass sound legislation.” Without them, no one would read the bills.

Even you do not think congressional staffers should handle the majority of the legislative process, you should believe in fair compensation. Nancy Pelosi spokesman Brendan Daly reminds people, these staffers “could be making a lot more money in the private sector, but they choose to work here.” These men and women have risked better financial stability for their families in order to work for the government. People should remember this before they are outraged at the six-figure salary.

Maybe in the future, Congressmen will have time to read each bill they vote on and time to write speeches and press releases. I am not holding my breath. The staffers are essential to political process.