Wednesday, November 24, 2010

Don't Even Scan My Junk!

To Washington Post op-ed columnist Ruth Marcus:

As a liberal Democrat, I generally agree with your practical yet slightly-left-of-center opinions, if I may so characterize them, but your column "Don't touch my junk? Grow up, America" (Nov. 24) is unconvincing to me. I just don't want to have my genitals subjected to a stranger's gaze or touch so that some bureaucrat's or politician's idea of enhanced airline security is served.

I have been patted down in an airport, by the way. It happened years ago, in Kenya, which is a country that may need such intrusive procedures. I'm not yet convinced such procedures are needed here.

Maybe "whether this is real security or security theater is to some extent unknowable," as you admit. Yet I want to be shown some hard evidence, please, before I submit to the depersonalization of a full-body scan or patdown that is not clearly for my own individual — or at least somebody else's — benefit.

Here are actual airport-style scans of a woman and a man, with faces blurred:


Those are "millimeter-wave" scans. The alternative Rapiscan process gives:



The second impresses me as quite graphic, the image of the male notably so. How exactly, I'd like to ask, is it any less depersonalizing if a scanner blurs or obliterates my face while it's outlining my "package" so faithfully?

Many of the things you wrote bother me greatly, Ruth:

" ... where is the harm if some guy in another room, who doesn't have a clue who I am and doesn't see my face (it's obscured on the machine), gets a look at my flabby middle-aged self?" Maybe so, but you're still being depersonalized — rendered anonymous — while your "junk" is put on display. This is acceptable???

The question of one's flabbiness being limned, and one's middle-aged sag being exposed to view, makes your position more tenuous, not less, I'd say. I myself am far enough past middle age to expect to hear loud guffaws emanating from that nearby room of high-tech privacy invasion. But even if I were young and buff, I'd still loudly say, "Keep your eyeballs off my junk." (And, by the way, are those prying eyeballs ensconced in a nearby room female eyeballs or male eyeballs?)

"The images are automatically deleted once the screening is completed"? Not necessarily ... from Gizmodo.com, "One Hundred Naked Citizens: One Hundred Leaked Body Scans" is proof that they don't always get dumped into the bit bucket.

"'Don't touch my junk' may be the cri de coeur - cri de crotch? - of the post-9/11 world, but it's an awfully childish one"? It misses the point for you to say how immature some of the blogging has been about this issue. Immature men and women, like the rest of us, have a right not to be ogled by complete strangers or patted down by begloved officials in Transportation Security Administration uniforms.

"The marginal invasion of privacy is small relative to the potential benefit of averting a terrorist attack," you say? Two thoughts:

• One, the invasion of privacy is not marginal, it is (as I said) depersonalizing. Patdowns are no better just because the patter-downer can see our face and we his or hers. Breast, genital, and posterior prodding, no matter how brief, is depersonalizing. What is depersonalizing is never marginal.

• Two, exactly how much do the odds of a terrorist attack decline if this kind of scanning/body-touching is insisted on? I'd like a rigorous comparison, please, between:
  1. The odds of my plane crashing with no survivors, due to causes other than a terrorist bomb
  2. The odds of my plane being blown up by a terrorist bomb if we go back to the older, less intrusive screening procedures
  3. The odds of my plane being blown up with the new procedures in place
If odds-number-three can't be demonstrated to be palpably greater than odds-numbers-one-and-two, is odds-number-three justified?

"We let people touch our junk all the time in medical settings"? Air travel is a part of many people's day-to-day lives. If I had to have my "junk" put on display on a basis more regular than an annual doctor's exam or mammogram, I'd certainly start to feel I was getting "objectified," after some period of time. In the case of frequent air travel — which I personally don't engage in — I'd like to feel that the benefits-to-depersonalization ratio was as significant as with the oocasional medical procedures I do voluntarily undergo.

"I undergo the pat-down, if I must, for the greater public benefit"? Again, where are the numbers to show how great the public benefit is?

Breast cancer survivors having their prostheses inspected; bladder cancer survivors having their urine bags ruptured ... yet you cover this by saying, "Effective screening does not require a complete suspension of common sense"? Do we really expect common sense to govern what each one of dozens or hundreds of TSA employees do in the performance of their duties?

An obvious problem with scanning/patting procedures that are this intrusive is that the line between what is OK and what is unacceptable is way too slender for unintentional oversteppings of that line to be rendered sufficiently uncommon.

And that doesn't even include the potential for intentional overstepping. Why might one think TSA employees any less immature than the average blogger?

"The stepped-up screening has generated a fascinating fusion of left-right outrage"? Well, duh. Maybe that's because there's no quantifiable, objectively verifiable case to be made for the stepped-up screening!

I could go on and on, Ruth, but I think you get my point. In a nutshell, I just don't see that stepped-up, intrusive screenings and pattings down of my private bodily parts in an attempt to reduce the likelihood of someone secreting non-metallic explosives on board an airplane enhances the public welfare in a quantifiable way.

And even if it truly forestalled what it purports to forestall, what is to stop the bad guys from, as you so delicately put it, "hiding explosives in body cavities" as the next phase of their war on civilization? If it ever comes to that, what would prevent your "reasonable" depersonalization-creep from one day acquiescing in anal and vaginal inspections?

Saturday, November 13, 2010

An Old-Style Poll on the Debt Crisis

First, take this poll:

  1. Raise your hand if you think Uncle Sam — the United States government in Washington, D.C., that is — has been living way beyond his means.
  2. Raise your hand if you know what the phrase "President Obama's budget commission" refers to.
  3. Raise your hand if you know that the co-chairs of that commission came out with a paper last week that gives some ideas about reining in our ballooning federal deficit and debt before they rein in America's future economic growth.
  4. Raise your hand if you have the slightest idea what it was that the co-chairs suggested.  
  5. Raise your hand if you believe the federal budget needs to be balanced — or, if the budget is not balanced entirely, at least the remaining yearly budget deficit has to be reduced to a fraction of what it is today.
  6. Raise your hand if you think the budget can be balanced, or the deficit sufficiently shrunk, without any tax increases.
  7. Raise your hand if you think the budget can be balanced, or the deficit sufficiently shrunk, without cutting federal spending in any major way.
  8. Raise your hand if your hand was up for either of the previous two questions.

Now, if your hand was up for question 8 — or even if it wasn't — read Ruth Marcus's column in today's Washington Post and then take the poll again.

If you are still left with your hand up on question 8, congratulations! You may be one of the roughly half of Americans who believe the "budget fairy [can] magically solve the problem by tucking a trillion or two under the national pillow," and that "snipping away at waste, fraud and abuse and sprinkling magic growth-dust on the economy" will fix everything.

Wednesday, October 06, 2010

Income Inequality: Way High by Historical Standards

The Washington Post's economics columnist Steven Pearlstein has an article and graph in today's newspaper showing how high income inequality has gotten in America.

Here's his "Percentage of Americans' pretax income going to top 10% of households" graph:


Before the recent economic downturn, fully 50% of the (pretax) income received from private (non-governmental) sources went to the top "decile" (10 percent) of earners. The bottom nine deciles (90 percent) of earners were left to split the remaining half of total pretax income.

SInce the downturn, the share of the top 10 percent has edged downward. But it still receives fully 48 percent of private pretax income!

The last time the slice of the pie going to the richest 10 percent was in the same high range as it is today was around 1929 — just about the time a stock market crash led to the Great Depression!

From the end of World War II until about 1976, according to the graph, the top 10 percent took home only about one-third of private pretax income. Pearlstein calls these "the 'golden years' for the U.S. economy."

As you go higher up the income ladder, things get more and more skewed. "By 2007, the top 1 percent of households took home 23 percent of the national income," writes Pearlstein. That's almost a quarter of national income, going to just 1 out of 100 American households.

That figure was attained after "a 15-year run in which [the top 1 percent] captured more than half — yes, you read that right, more than half — of the country's economic growth." Translation: from 1992 to 2007, as gross domestic product and national income rose mightily, the bottom 99 percent of households took home less than half of the overall increase.

Here's a chart showing the inequailty in income in a different way:




(It's from this web page. Scroll down about halfway to the "August 3, 2008--Growing Inequality in Income" entry.)

In this second chart we see that as of 2006, the bottom 90 percent of earners had an income level that was, on average, $30,173 — down from $31,437 in 2000. Meanwhile, the average family in the "top 10% to 5%" range of incomes took home $117,688 in '06. There were almost 7.5 million such families, compared with over 133 million in the bottom 90 percent.

Then, once you get into the "top 5% to 1%" range and above, the income disparity grows by leaps and bounds. There were, for example, fewer than 15,000 families in the "top 0.01%" in 2006, each taking home an average income of over $17 million dollars!

* * * * *

Pearlstein adds:

Because so much of the nation's income is siphoned off to the super-rich ... a struggling middle class trying to maintain its standard of living [must] take on more and more debt. ... [Meanwhile,] in order to respond to the stagnant incomes of their constituents, politicians took a number of steps to keep the "American Dream" within reach, including subsidization of home mortgages and college loans [and] politicians also were quick to cut taxes for the middle class even when it meant running up the national debt to pay for popular entitlement programs and government services.

See the common thread? When income inequality is high, there are irresistable pressures both at the national and at the family level to take on huge amounts of debt.

In an earlier post, I showed this graph:


It illustrates the fact that the percentage of our gross domestic product represented by the size of our national debt (i.e., the total amount of debt owed by the federal government to those holding its bonds and other debt instruments) has never been higher in our nation's history ... with the single exception of the years immediately following World War II.

The national debt represents the accumulation over time of our annual federal budgetary deficits. Unless we quickly rein our annual federal deficit in by means of a series of difficult political choices, this ratio of national debt to GDP will (according to the Congressional Budget Office's "alternative baseline scenario") soar way past the sky-high post-WWII level, sometime during the 2020s.

Even if we make the tough political choices now, the CBO's rosiest scenario — the "extended baseline scenario" — has the debt-to-GDP ratio increasing from today's already high-by-historical-standards level.

Pearlstein also points out that the "polarization of income distribution in the United States coincides with a polarization of the political process. Just as income inequality has eroded any sense that we are all in this together, it has also eroded the political consensus necessary for effective government."

Translation: don't hold your breath until the politics-as-usual we see in Washington and around the country today steps up to the tough political choices that will make the CBO's disturbing "extended baseline scenario" come true, as opposed to the truly scary "alternative baseline scenario."

* * * * *

We await with bated breath, meanwhile, the report forthcoming by December 1 from the National Commission on Fiscal Responsibility and Reform. Appointed in early 2010 by President Obama and headed by Alan K. Simpson, a former Republican senator from Wyoming, and Erskine Bowles, White House chief of staff under our last Democratic president, Bill Clinton, this commission (see its website) is ...

... charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.

The recommendations of the commission will be non-binding on Congress or the president. It is just barely possible, however, that they would be submitted to Congress for an up-or-down vote, without allowing Congress the ability to pick and choose among the recommendations. If that even succeeds, it's unclear how the package would be translated into actual legislation and passed as such, with the president's eventual signature.

Even so, the commission approach may be our best hope to rein in deficits and balance the federal budget any time soon. Doing so is the only way to get the debt-to-GDP ratio back under control, barring stunning GDP growth which is not likely to happen.

Meanwhile, we need to address income inequality. There's no way we will be able to rein in the federal largesse aimed by politicans at "keeping the American Dream within reach" of the broad middle class if a fairer distribution of income is not somehow brought about, thus reducing the pressure on the politicians to keep the federal money tap flowing, deficits be damned.

* * * * *

The figures I gave earlier were for pretax income. We use a "progressive" income tax in the U.S. to charge the well-to-do a higher percentage of their income, based on their tax bracket. Hence, after-tax income distribution is not quite as skewed as pretax income.

You can check out an easy-to-use tax calculator here to see how tax brackets work. Try it! Enter your filing status (single, married filing jointly, etc.) and the tax year you are curious about to see what the tax brackets looked like in that year.

Now set the filing status to married filing jointly, the most common status for the proverbial "family of four." Advance the tax year in successive steps from 2000 through 2003. Notice how the tax rates for the top three brackets suddenly dropped in 2003.

By 2003, taxpayers in the third bracket from the top — with taxable incomes of at least $114,650 — were taxed at 28 percent of the taxable income above the lower edge of their bracket. The same bracket was taxed at 30 percent the previous year. Meanwhile, the two top brackets went from 35 percent and 38.6 percent to 33 and 35 percent, respectively. Those changes reflected the "Bush tax cuts."

According to Steven Pearlstein's article, households that take home more than $110,000 a year (in today's dollars) constitute the top 10 percent of our population income-wise. But in the 2010 tax year, as the tax brackets worksheet shows, the bottom edge of tax bracket #3 is fully $137,300. That means that a huge slice of America's top 10 percent income-wise currently gets taxed in the fourth bracket down, at a maximum rate of only 25 percent!

* * * * *

The Bush tax cuts will expire at the beginning of 2011 unless Congress steps in. It is not entirely clear which earlier year's brackets would be reverted to, or whether the dollar amounts associated with those reverted brackets would be raised to offset inflation. Yet if one assumes the 2001 brackets would come back into force, possibly with inflation-adjusted dollar amounts, the worksheet suggests that the three (no longer four) tax brackets embracing roughly the top decile of incomes would have to pay taxes at maximum rates of 30.5, 35.5, and 39.1 percent. Thus, everyone in the top decile would pay taxes at higher maximum rates than now.

We hear that Democrats want to let the Bush cuts expire for the most well-off while keeping them in force for the vast middle class. But we also hear that they would raise taxes (by letting cuts lapse) on only the top two brackets, not the top three, as would be needed to pull in extra tax dollars from the over 13 million households in the top decile but below (roughly) the top 1 percent.

In my opinion, we will instead need to raise taxes on the entirety of the top decile if we want to be able to afford not raising them on those in the bottom 9 deciles!

Tuesday, October 05, 2010

Why doesn't it feel like an economic recovery?

Today's The Washington Post features "Why it doesn't feel like a recovery," a revealing graph accompanied by a short article. They are presented interactively here.

Here's the crucial graph itself:



You'll need to view the online presentation for full details. Here's a summary:

Our economy's "size" is given by its gross domestic product: how much valuable "stuff" gets produced by Americans each year. The potential GDP grows as the potential size of the workforce does. Meanwhile, improved techniques of production are usually expected to increase the "productivity" of workers, so they can make ever more "stuff" per hour on the job than they otherwise could. That's why there is an almost straight diagonal line in the graph that steadily ascends as the years roll by, reflecting a GDP that potentially grows at a nearly constant rate.

But the actual GDP is currently under — less than — that potential GDP. That's the area shown in red on the graph.

Actual GDP can sometimes exceed the line shown as potential GDP, during short, unsustainable bursts of economic activity. The areas shown in blue — the bigger of the two that are shown comes around the years 2000-2001 — reflect that.

The key point is that the vast shortfall between actual and potential GDP that we see today is what is wrong with the economy. Too many people without jobs, too much industrial machinery idle, too many office buildings under full capacity — it all adds up to a woefully underperforming economy.

This is so even though actual GDP stopped dropping and began heading upward in the middle of last year, 2009. The graph shows that fact ... and it is what economists mean when they say that the recession officially ended then. We are no longer in recession because we have positive GDP growth now; that's all that means. It does not mean the economy is in good shape.

What would it take to get the economy back to the level where actual GDP matches potential GDP, so that everyone who is not simply "between jobs" actually has a job, factories are all humming, office buildings are full, retail stores are not empty, etc.?

As the graph shows, we can get back to that point as soon as 2012 — in time for the next presidential election — if only actual GDP could rise at the rate of 6 percent per year between now and then. 6 percent growth would so far outstrip the more modest expected rise in potential GDP, that all but the roughly 5 percent of workers who are typically "between jobs" at any given moment are actually working.

However, if actual GDP growth takes place at a more modest rate of 3 percent a year, it will take us until 2020 to squeeze all the red out of the graph.

And it gets worse. If the rate of actual GDP growth tops out at only 2 percent a year into the foreseeable future, we will never squeeze all the red out. In fact, in that scenario the unemployment rate, which is now at an unacceptable 9.7 percent, would rise to fully 11.9 percent by 2020 if GDP grows at a scant 2 percent between now and that year.

In short, this graph gives us all valuable insight into why words like "the recession ended in mid-2009" are meaningless from a practical — and political — perspective today.

Thursday, August 05, 2010

The "Relocating" of America

My last post, America Dislocated, was about how America needs to recover its old, small-town values. I said I believe that our loss of erstwhile small-town values is like a joint that has been dislocated. We've been successfully favoring it for decades, but now it needs to be (painfully) reset.

That is what is in fact in store for us, I said, owing to a huge impending crisis over our national debt. According to Congressional Budget Office estimates ...

From CBO's deficit forecast shows need for early action, Washington Post editorial, Saturday, July 31, 2010


... between now and about 2035 the ratio of federal debt to the size of our economy — the debt-to-GDP ratio — is likely to soar to unprecedented, unsustainable levels. This so-called "alternative baseline scenario"(the top blue line in the graph) could, if everything goes right, fail to materialize ... but even the rosier "extended-baseline scenario" puts debt-to-GDP ratios at levels higher than at any time in our nation's history, with the exception of the period surrounding World War II.

Even the rosier projections involve debt-to-GDP levels that are exorbitant by all peacetime standards, and look like they will continue long into the indefinite future ... unless something is done. What might that something be?

  • We can try to head off the crisis by raising taxes, thereby shrinking the annual budget deficits that feed into the national debt.
  • We can cut expenditures, with a similar belt-tightening result.
  • We can grow the GDP. (If GDP grows, the ratio of debt-to-GDP shrinks.)

Growing the GDP is problematic. If we could do that at will, we'd have no lingering recession today.

Raising taxes is likewise problematic. Republicans emphatically don't want to raise them on the rich, which would happen if the Bush income-tax cuts are allowed to expire on schedule at the end of 2010. GOP members of the House and the Senate would prefer to renew the Bush cuts in their entirety, but, failing that, they would like to renew the Bush cuts as they affect the top two income brackets specifically. Democrats want to keep the cuts for middle-income taxpayers and eliminate them for the top two brackets. Who knows where all this will end up, in a midterm election year?

Cutting expenditures is also problematic. Where do you cut?

  • Cutting interest payments on the debt is out, right off the bat.
  • So, effectively, are cuts in spending on the military, national defense, and homeland security.
  • Cuts in entitlement programs like Social Security and Medicare are super-hard to accomplish ... and it is increasing Medicare/Social Security outlays for retiring baby boomers that most threaten to break the bank.
  • The recent health care reform package makes things even worse by imposing a yet greater financial burden on Uncle Sam, and even many of its supporters agree that its failure to seriously contain medical costs will have to be remedied in the very near future.
  • Remaining items in the federal budget are called "discretionary spending" — and they're almost as hard to eliminate as all of the above. Many of them are instances of "pork," a.k.a. "earmarks," that legislators get inserted in bills to help the folks back home in some way. Constituents love pork/earmarks when their own state or district is benefitted ... and hate it as a general concept when they themselves are not the beneficiaries. But because locally helpful pork gets legislators re-elected, it's nearly impossible to eradicate.
  • Much of the rest discretionary spending goes to programs that benefit everybody, such as federal assistance to local schools. You have to be a curmudgeon to oppose that ... or a member of the extreme political right which insists that Uncle Sam has no business telling the states and local school boards what to do to keep the "money tap" open.

Whatever the category of federal spending, it is hard to cut.

Why? At bottom — and this applies even to military, national defense, and homeland security expenditures, most of which wind up in pockets of us Americans here at home — it's because we have developed an "entitlement mentality." Put bluntly, we depend on the federal "money tap" to shield us from our onetime small-town, communitarian obligations.

The urge to leave
Bedford Falls is strong
for George Bailey.
Think of George Bailey in "It's a Wonderful Life." He wants to leave Bedford Falls, see the world, make his mark on it. And why not? He's seemingly not needed at the Building & Loan his father founded.

But, as it turns out, if he leaves (as he learns from the guided tour an angel gives him of the dystopia Bedford Falls will become if he goes) he will in effect be killing the community his father helped build. Instead, he stays and sets things to rights. Cue the happy ending!

In 1946, when "It's a Wonderful Life" was made, the federal "money tap" had been opened wide due to WWII and, before that, the New Deal during the Great Depression. Frank Capra, the film's director, was clearly worried that America's small towns were dying, as was the sense of communitarian responsibility which George Bailey dodged until set straight by an angel.

After WWII we had ... yet more federal programs. One was the G.I. Bill of Rights that sent returning veterans to college and on to lives in the new suburbs, such as Levittown, that were springing up like mushrooms. Federal largesse grew, and as it grew, it was more than matched by GDP growth for quite a long time, as cheap oil from America and abroad fueled economic progress. (Our "cheap oil tap" was shut off in the 1970s with the first Arab oil embargo.)

But we were also getting warnings, in the form of books like Sloan Wilson's 1955 novel "The Man in the Gray Flannel Suit," that there was trouble in paradise. In 1956, the casual, carnal, illicit sex going on among neighbors on Grace Metalious's imaginary "Peyton Place" showed us how a real place like Levittown could turn into the complete antithesis of our old, small-town values.

When we left small-town America behind, three important, and interrelated, things happened:

First, we freed ourselves of strictures that formerly held our individual behavior in check. We became what George Bailey might have become if he had in fact left Bedford Falls.

Second, we accordingly grew able to shine — brightly, individually — and to live unprecedented sorts of lives that were ofttimes super-productive economically, technologically, or in some other important way. But we at the same time became "men in gray flannel suits" — à la the currently popular TV series "Mad Men."

There was, as I say, trouble in paradise.

Third, those who for various reasons were unable to shine in the brave new world we were creating were made wards of the expanding welfare state.

If the welfare state now has to be curtailed to head off a debt-to-GDP crisis — and I think it must — then how will that affect American lives? My hypothesis is that at some point we will have to rein ourselves in, in terms of the individual freedom we have known. It was that freedom which, in effect, allowed us to "leave Bedford Falls behind" and to live life on our own unfettered terms.

Why will that happen? Because we will have to reinstate our presently dormant communitarian values, the ones that prevailed cinematically in Bedford Falls, and actually in the small towns of America's past.

And why will we have to reinstate our dormant communitarian values? Because the only alternative would be, as the federal money tap dries up, the dystopia which George Bailey's angel showed him.

Nobody wants that.



***


But we have to be on guard here. Small-town values have traditionally been narrow-minded values.

Nobody ought to want those again.

I talked in my earlier post about a recent Washington Post op-ed piece by Kathleen Parker, Olive Street, by heart, which extolled her tiny three-block enclave in Washington, DC. On Parker's street ...

Olive Street, NW
in Washington, DC


... the people are kind. The kind people of Olive Street include (gasp!) a pair of gay men, next door to Parker, who have been together for a quarter century. They also include those who, like Parker, help watch over neighborhood children whose ethnicity (gasp! again) is not the same as that of their adoptive parents. Would such families fit in, in Bedford Falls?

They are going to have to fit in, in a "relocated" America.

I see the "relocating" of America as upholding the good, communitarian values of our small-town past and as refusing to uphold the narrow-mindedness of that past.

For Joel Fleischman, it's
4,000+ miles back
to the Big Apple
Remember "Northern Exposure," the early-1990s TV series? The denizens of fictional Cicely, Alaska, were about as variegated as those of Olive Street, Washington, DC, but that didn't matter: they somehow coexisted as an egalitarian, big-tent community.

Dr. Joel Fleischman, fresh from from New York and medical school, had managed to get deposited there and desperately wanted to get away. A lucrative career awaited elsewhere. But he was under contract; he had to stay. As he became unwillingly enmeshed in the Cicely community, he learned values of self-denial, mutual caring, and communal integrity that he'd never imagined as a medical student.

We are about to become Joel Fleischman ... all of us. We are about to be permanently relocated to community-minded, tolerant, self-sufficient Cicely, AK.

This has to happen: the federal money tap is about to dry up. We, in all our variegated diversity, are going to need a resuscitated Bedford Falls Building & Loan — a metaphorical stand-in for local, communitarian spirit  — to come back to life and help us over the rough patches, real person face-to-face with real person.

Sunday, August 01, 2010

America Dislocated

Well, go on now and kiss it goodbye,
But hold on to your lover,
'Cause your heart's bound to die.
Go on now and say goodbye to our town, to our town.
Can't you see the sun's settin' down on our town, on our town,
Goodnight.
Iris DeMent, "Our Town"


Post
Columnist
Kathleen
Parker
In a recent Sunday Washington Post, in Olive Street, by heart, 2010 Pulitzer Prize-winning columnist Kathleen Parker is right on target: Today's America is pining away for lost small-town values.

Parker describes an idyllic three-block-long enclave in Washington D.C. where she has nurtured her own personal desire for community for the past four years. Then, after extolling Olive Street's virtues, the columnist reveals she is pulling up stakes for "a much bigger town — New York City — to begin a new adventure."

In the Big Apple, will she find next-door neighbors like Jack and Craig, who took her in the night a friend died? Among the "daily expressions of what it means to be human" that Parker attributes to this gay couple of 25 years' standing have been ...
... the dozens of times I knocked on their door to say, "I'm hungry and out of food," knowing they would say, "You're in luck!"
Will Parker find in NYC another ...
... Meaghan, a widow [who] went to Guatemala to adopt Josephina, who, now bilingual and a determined tricyclist, has become the block's child. Not long ago, Meaghan married Nigel, who added Reagan and Drew to our neighborhood brood.
Maybe Parker will find another Olive Street. Or, maybe not.



Another piece from the same Sunday Post, Crafton family enjoys rare closeness after seven years together at sea, tells of a family-of-five who bought a double-masted, oceanworthy sailing vessel in 2003 and, with several months-long stays in various island communities en route, took it all the way around the world. Dad, Mom, two teenage girls and one teenage boy, living and sleeping together in a cabin no bigger than a hotel bathroom ...

The Craftons in their cabin

... and they had the time of their lives.

What's leaving America entirely and then enduring the culture shock of coming back home after several years away have to do with small-town values? Three things. One: father Tom Crafton reports, "The day we moved onto the boat, the sibling rivalry stopped. I don't think [the kids] ever complained, not once." Two:
Vanuatu, where the people owned the least and smiled the most, was one of their favorites [among stopping off points]. They stayed three months. "They are the happiest people in the world," Tom says. "It reinforced everything we believed about putting time with the family over this blind pursuit of material things."
Small-town values — Vanuatu is essentially a small town on a tiny island — are family values. Three:
Rudest encounter: a few days after reaching Maryland [upon their return home], when a cranky boat owner warned Jena and Ben to keep their rowboat away. "I can't remember a mean word anywhere else on our trip," Tom says. "We're relearning how things are around here."


Williamsburg
reenactor
Yet another article in the same edition of the Post, "Tea party" activists drawn to Williamsburg and its portrayal of Founding Fathers, talks about a recent influx of sometimes temper-toting tourists to Colonial Williamsburg, Virginia, where scenes of our country's founding are reenacted daily. These members of the Tea Party movement are ofttimes speaking up, and out, at the reenactments:


They clap loudly when an actor portraying Patrick Henry delivers his "Give me liberty or give me death" speech. They cheer and hoot when Gen. George Washington surveys the troops behind the original 18th-century courthouse. And they shout out about the tyranny of our current government during scenes depicting the nation's struggle for freedom from Britain.

"General, when is it appropriate to resort to arms to fight for our liberty?" asked a tourist on a recent weekday during "A Conversation with George Washington," a hugely popular dialogue between actor and audience in the shaded backyard of Charlton's Coffeehouse.

Standing on a simple wooden stage before a crowd of about 100, the man portraying Washington replied: "Only when all peaceful remedies have been exhausted. Or if we are forced to do so in our own self-defense."
Williamsburg tourists being instructed
in using a musket

In pre-Revolutionary America, Colonial Williamsburg was a small-town seat of local government set in a farming community. Thomas Jefferson, who lived at Monticello, another dot on the map in Virginia, was a farmer.

Add all three of these recent Post pieces together, and you get an indictment of today's dislocated America. If you don't actually live in a small town — as few of us do today; this blogger comes from small-town people but has never himself lived in a small town in 63 years — you have to be extremely lucky to find an Olive Street where you live. You have to go to great lengths, such as sailing the whole family around the globe in a cramped twin-master, to put aside today's hyper-material culture and bond tightly with your own kin. And you are likely to be increasingly angry that the simpler America Jefferson and others knew has vanished.


Ex-Alaska
governor
Sarah Palin
Which is why this blogger thinks Sarah Palin will be elected our next president in 2012.

I think of Palin as Ronald-Reagan-in-a-bra — which, for all you misogynists out there, is not meant as a slight or a slap against the former Alaska governor and GOP vice-presidential candidate. This country is overdue for a female chief executive, and I think Palin will presently become its first.

President Reagan was much like Palin in many ways. He had little grasp of the nuances of current affairs in the 1980s and was the exact opposite of a policy wonk. Ditto, Palin. (Except that both were/are much smarter than we liberals give them credit for. It was just that they had/have the gift of sieving out the daily buzz that stands in the way of their enacting their guiding principles, whatever they actualy are. We'd all be better off if we had a little of the same.)

Reagan was a consummate actor, folksy and telegenic. Ditto, Palin — though she has never been paid to read lines in movies and on TV, as Reagan was for decades. Palin is simply a natural at it — as was the young Reagan. He just happened to stumble into a profession that gave him an outlet for his inborn acting bent.

Then he stumbled into another: politics. Reagan the politician could come up with lines, pithy and humorous, that epitomized what he wanted to make us believe he stood for. Ditto, Palin.

Reagan:
Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.
Palin:
I love those hockey moms. You know what they say the difference between a hockey mom and a pit bull is? Lipstick. 
Reality check time:

  • Under Reagan, the national debt ballooned as a percentage of GDP. Reagan wanted to convince the Soviet Union, through an American arms buildup, that we were dead serious about opposing the "evil empire." Reagan also wanted smaller, cheaper government, true, but he wanted to scare the communists in Moscow even more.
  • We have yet to see which of her pet convictions Sarah Palin will sacrifice in the name of ... well, of whatever it is that really motivates her. We do know (see Anne Applebaum's recent Post op-ed piece, GOP shows historic amnesia on spending cuts) that "as mayor of Wasilla, Sarah Palin hired a former [ex-Alaska Senator Ted] Stevens chief of staff to be a Washington lobbyist. As a result, the 6,700 inhabitants of [Palin's own small town of] Wasilla enjoyed $27 million in federal earmarks over a four-year period." That's over $1,000 of federal largesse per Wasilla resident per year!

Still, even if she's not always made good on her small-govrnment rhetoric, it's clear to me that Palin marches to the beat of her own drummer — as did Reagan — and will not be hemmed in as president (should she be elected) by the Tea Party movement or anything else.

How American, by the way, for Sarah Palin to have a quintessentially small-town independence from any and every mainstream set of beliefs and constraints that may come down the pike.


President
Barack Obama
President Obama, whom this blogger adores, will, in 2012, lose to Palin because he has taken on the thankless task of trying to heal the side effects of the dislocation of America without necessarily fixing the dislocation proper.

Small-town, Main Street America would never have produced the fat cats on Wall Street who made a financial balloon out of "bad paper" — subprime mortgages that no local savings and loan would have countenanced — and inflated it to the point where it burst, taking the economy down with it. Now Obama, with his bailouts and stimulus plan, is trying to patch things up and put Americans back to work. But what he doesn't seem to get is that Americans want their jobs back, sure, but they also want to get back to small-town values that the faceless Wall Street fat cats, like other miscreants before them, have blithely detonated.

In a small town, everyone takes care of everyone. When people are down on their luck or in poor health, other people step in to help. Today, with that small-town mentality a perennially endangered species, we need hugely expensive, massively intrusive "Obamacare" health reforms, bailouts, stimulus plans, etc., etc., etc., in lieu of what was once the American way of life.

We now face a ballooning of the national debt over the next decade or more that will make the Reagan balloon in the 1980s, extending as it did into the 1990s, look like a baby bump. By 2020, if things don't go exactly right — and they won't — our national debt as a percentage of GDP will dwarf even that of the World War II period:

From CBO's deficit forecast shows need for early action, Washington Post editorial, Saturday, July 31, 2010

That steeply rising top blue line which will breach a debt-to-GDP ratio of 150 percent by about 2030 is the Congressional Budget Office's "alternative baseline scenario." It will be, says the Post editorial cited in the caption, what happens if our political leaders wimp out and extend the Bush tax cuts, index the alternative minimum income tax to the rate of inflation, and fail to reduce Medicare payments to doctors dramatically. But that's not the main point. Even if those bad choices are avoided in the short term ...
... growth in spending on federal health-care programs and Social Security would drive up debt to about 80 percent of GDP by 2035. That is, actually, the rosy scenario.
In Reagan's time, debt-to-GDP never got above 50 percent.

The CBO's best case/worst case scenarios reflect the huge cost, I'd say, of trying to use big government to offset our loss of small-town values. Small-town America would never pollute the well everyone drinks from, but our pollution levels today threaten to inundate coastlines everywhere with polar icecap meltdowns due to global warming. The Tea Party right resists believing that because ... because what, after all, is the proposed solution? More massive government intrusion in the form of a carbon tax — whether it's an explicit one or a hidden one that emerges from a cap-and-trade system!

The CBO's frightening debt-to-GDP predictions largely reflect spending on federal health-care programs and Social Security as the baby boomers retire. Those programs are, I'll say again, substitutes for having a "small-town someone," perhaps kinfolk nearby, who will set aside their own private pursuit of more and more "stuff" and take care of you in time of sickness, old age, or economic need. Social Security was a product of the New Deal in the Great Depression, which in the graph above shot America's debt-to-GDP upward to then-unprecedented heights. This was also a time of massive human dislocation: think of the small-town Okies forced by adversity to migrate from the Dust Bowl to California.

Sign of the times
in the 1970s
That there was not a similar blip in the 1960s, when Medicare began as part of President Lyndon Johnson's Great Society initiative, is very likely a reflection of strong GDP growth during that era — fueled by cheap petroleum, a sweet situation that ended abruptly in the 1970s with the first Arab oil embargo. Since Reagan, the only period in which debt-to-GDP has shrunk has been under President Clinton. As Anne Applebaum points out in GOP shows historic amnesia on spending cuts, President George W. Bush, supposedly a small-government consrvative, expanded government spending ...
... by an extraordinary 104 percent. By comparison, the increase under President Bill Clinton's watch was a relatively measly 11 percent (a rate ... lower than during Ronald Reagan's). In his second term, Bush increased discretionary spending — that means non-Medicare, non-Social Security — 48.6 percent. In his final year in office, fiscal 2009, he spent more than $32,000 per American, up from $17,216.68 in fiscal 2001.
It's only gotten worse under President Obama, says Applebaum, "the Obama administration is far more profligate than Clinton or Bush, terrifyingly so."

So it looks to me as if the so-called welfare state, full of ever-expanding federal entitlements, is a dangerously overinflated tire that has already been patched too much. It looks as if the only way to avoid a blowout is to get debt-to-GDP radically back in check — which is going to mean massive new tax revenues, as well as cutbacks in "discretionary spending" and maybe even in entitlement benefits and eligibility.

Or, put it another way: It looks like the only really effective way to deal with the coming debt-to-GDP threat — given that new taxes and spending cutbacks are, both of them, political poison pills in today's culture of dependency on Uncle Sam's largesse but resentment of the tax hikes which, short of going further into debt, are necessary in order to pay for it — is to somehow reconstitute small-town values in America. To eliminate the need for massive federal entitlements in the first place, by making people's general welfare a matter of local, face-to-face concern.

Sign of the times
in the 1930s
Our society, I am coming to believe, has been "dislocated" and "out of joint" since at least the New Deal under Franklin Roosevelt in the 1930s, when Uncle Sam began taking responsibility for helping Americans who could no longer rely on local, face-to-face charity to keep them afloat in hard economic times such as the country had never seen before.

It was a pragmatic response to being between a rock and a hard place, economically and socially. Local, face-to-face concern for one's hard-luck neighbors was not going to get the job done. The federal government had to step into the breach. The New Deal didn't so much set our country's "dislocated joint" properly as give us a crutch so we didn't have to walk on it.

I think that in view of the debt-to-GDP crisis that loom just ahead of us, we now need to reset the nation's "dislocated joint" properly, for a change — which, like all joint resettings, will unfortunately involve a lot of short-term pain and will require a physician (our political leadership) with great courage and resolve.

By "resetting the joint" I mean weaning ourselves off federal largesse and reinstituting the small-town concern for our neighbors' welfare that is the best — nay, only — real alternative. No one says that will be easy.

This need for short-term pain on the part of the populace and political courage on the part of its leaders is what just about all of the ambitious Obama agenda is trying to head off, through ever greater federal tinkering with the way things get done in this land, and also with what things (eschewing health insurance, for instance) Americans are allowed to do.

This insistence on re-patching a bulging, unpatchable tire is what Sarah Palin symbolically stands against. What she symbolically stands for — whatever her actual record as mayor of Wasilla — is a return to America's small-town values and a concomitant reduction in the size of federal discretionary (and even entitlement) outlays.

That's why I think she'll be our next president, come January 2013.

Friday, May 21, 2010

George Weigel - An immigration debate primer

"An immigration debate primer" is a must read for Catholics like me who are concerned about the debate over illegal immigration. It's by Catholic ethicist and columnist George Weigel, whose syndicated column can be accessed here at the Archdiocese of Denver website.

Weigel writes that:
Catholic political theory places a high value on the rule of law, which it regards as morally superior to the alternative, which is the rule of willfulness imposed by brute force.
Hear, hear! The reason why liberal Americans like myself — people who shudder at the new Arizona law making "breathing while Hispanic" a dangerous proposition for Mexican immigrants, legal or otherwise — should insist on tighter border security is that the rule of law as Weigel defines it is crucial to everything America stands for. Unlawful immigration by definition undermines the rule of law.


Weigel:
The laws we make through our elected representatives are under the scrutiny of the natural moral law we can know by reason, which means that our political judgments should be rational, not glandular.
Catholic thought has always been "anti-glandular," meaning it is based on reason and reasonability. The "natural moral law" is basic to Catholic understanding: a "supreme and universal principle, from which are derived all our natural moral obligations or duties" (The Catholic Encyclopedia). It is the foundation-stone for reasoning about right and wrong in the political arena and elsewhere. (Nice to have in this topsy-turvy day and age, no?)

Weigel:
The inalienable dignity and value of every human being from conception until natural death is the bedrock personalist principle from which Catholic thinking about public policy begins. The dignity does not confer an absolute right on anyone to live wherever he or she chooses. A proper Catholic understanding of limited and constitutional government grasps that the state—which in the American case means the national government—has a right to enforce its citizenship laws and a duty to conduct that enforcement in a just way.
True, a lot is packed into that bullet point.

"Inalienable dignity": It applies to illegal immigrants, too. We as Catholics, as Americans, and as human beings are not to despise anyone based on their immigration status.

No "absolute right [for] anyone to live wherever he or she chooses": The inalienable dignity of every person is not a blank check to do whatever he or she wants. "The rule of willfulness" is suspect at both the national and the personal levels, in Catholic thought.

"The [national government] has a right to enforce ... citizenship laws": Though Weigel is a conservative theologically and politically, he's no extreme libertarian. There are things that a strong central government must do.

"... a duty to conduct that enforcement in a just way": Yes, must do. Justly, though — not (as with the Arizona law) a matter of "willfulness imposed by brute force."

Weigel:
With the exception of our Native American brethren, every Catholic in the United States today is the descendant of immigrants ... [a fact] which reflects the national tradition of hospitality to the stranger [and] should create a predisposition to be pro-immigrant within the Catholic community in America. That the vast majority of Catholics in the United States today are law-abiding citizens whose economic and social well-being is made possible by living within a law-governed political community should incline us to live that pro-immigrant predisposition through the mediation of the rule of law.
" ... predisposition to be pro-immigrant": Unfortunately, many American Catholics lack it.

" ... living within a law-governed political community": They (in my opinion) lack it in part because they fear illegal immigration's potential to undermine the rule of law.

" ... should incline us to live that pro-immigrant predisposition through the mediation of the rule of law": OK, let's be frank. Not just Catholics but many others worry that the rule of law has broken down in America's struggle to deal with immigration matters. So our "pro-immigrant predisposition" is taking a back seat to our fears.

Weigel:
It is absurd to suggest that the United States has become xenophobic, racist, or anti-immigrant. Last year ... the United States naturalized 1 million new citizens, most of them from Mexico, and over the past decade ... another 10 million people who have worked their way through the system legally. Millions more are in the legal immigration pipeline or are working in the United States with legal permits. If these are the marks of a racist or xenophobic nation, it’s a nation that displays its racism and xenophobia in very odd ways.
" ... absurd to suggest that the United States has become xenophobic, racist, or anti-immigrant": The U.S. as such is not anti-immigrant, but many people within it are. It's sad, but true — hello, Patrick Buchanan. So this is the only point Weigel makes that I'm not fully on board with. But I cheer loudly that over the last decade we've naturalized some 1 million new Americans a year, many of them from Mexico.

Weigel:
The canons of justice dictate that people should not be rewarded for law-breaking, and that is what illegal immigrants do: they break the law. Realism dictates that we cannot send some 10 to 20 million illegal immigrants home. The present situation—border porousness, which is exploited by criminals as well as by those looking for work; a large population of illegals; millions of people seeking U.S. citizenship while playing by the rules—is intolerable. Any morally acceptable solution to immigration reform will address all three facets of the present mess.
" ... canons of justice ... ": A nice Catholic turn of phrase, that.

" ... law-breaking ... is what illegal immigrants do ... ": Yes! Until we liberals come to grips with that fact, the immigration debate will stay topsy-turvy and glandular.

"Realism dictates that we cannot send some 10 to 20 million illegal immigrants home ... ": Suggesting that we need to get to the point where an amnesty (by whatever name) can be granted to those who are already here and are not otherwise in trouble with the law.

" ... border porousness ... exploited by criminals ... ": Facet #1 needing to be addressed.

" ... a large population of illegals ... ": Facet #2.

" ... millions of people seeking U.S. citizenship while playing by the rules ... ": Facet #3.

Weigel:
Responsible citizens who wish to be generous and uphold the rule of law and create a solution to the problem of illegals that doesn’t divide families or otherwise treat unjustly those who have ... “taken advantage of a situation we Americans have allowed to exist for too long” should demand that politicians stop playing the demagogue on this issue. Responsible citizens, while understanding the angers of fellow-citizens along the southern border of the United States who are appalled at the situation they face on a daily basis and while demanding that the government fulfill its duty to protect the border, will also appeal to the common sense of their neighbors who imagine that deportation is a real-world solution.
" ... politicians [must] stop playing the demagogue ... ": Yes, it's up to us citizens to demand they do, but how? This seems to be one of the most pressing issues of the age — how can we get our elected representatives to stop shirking their duties and pass immigration reform?

" ... Responsible citizens, while understanding the angers of fellow-citizens ... will also appeal to the common sense of their neighbors ... ": A synonym for "natural law" is (properly qualified) "common sense." We all need to employ common sense more than we do. Common sense more than anything else can rescue our republic from the wing-nuts.

Thursday, May 20, 2010

George F. Will - Arizona law's foes are using the real immigration scare tactics

Let's talk some sense about illegal immigration, please.

Washington Post columnist George F. Will wrote recently in "Arizona law's foes are using the real immigration scare tactics" of his dissent from Cardinal Roger Mahony, who said in "Arizona's Dreadful Anti-Immigrant Law" that Arizona's new law pertaining to illegal immigration involves

... reverting to German Nazi and Russian Communist techniques whereby people are required to turn one another in to the authorities on any suspicion of documentation.

The statute, signed into Arizona law by Governor Jan Brewer on April 23, requires state police to question anyone who appears to be in the country illegally. This has been called a mandate for racial profiling. In effect, "breathing while Hispanic" in the state of Arizona can now get you in trouble with the cops.

Cardinal Mahony is right to oppose it, and George Will was wrong to take umbrage. (In fact, there can be little doubt that the Arizona law will quickly be shot down constitutionally by the very liberal U.S. Court of Appeals for the Ninth Circuit, which sits in San Francisco. The U.S. Supreme Court, though it tips conservative, will likely uphold that ruling.)

But Will was also right about something:

... the vast majority [of Americans] who do not favor completely open borders believe that there should be some laws restricting who can become residents, and presumably they believe that such laws should be enforced.

Once Americans are satisfied that the borders are secure, the immigration policies they will favor will reflect their -- and the law enforcement profession's -- healthy aversion to the measures that would be necessary to remove from the nation the nearly 11 million illegal immigrants, 60 percent of whom have been here for more than five years. It would take 200,000 buses in a bumper-to-bumper convoy 1,700 miles long to carry them back to the border. Americans are not going to seek and would not tolerate the police methods that would be needed to round up and deport the equivalent of the population of Ohio.

We need to get control of the border. Senator John McCain was on the same page with Will in this campaign ad:





"Completing the danged fence" along the Mexico-U.S. border is a politically necessary prelude to granting amnesty to the 11 million illegals who are already here and not otherwise in trouble with the law. So is getting sufficient numbers of U.S. Border Patrol on the job in Arizona and other states along the border.

Why is it so hard to find anybody who sees all of the following:

  • how important securing the border is
  • how necessary amnesty for the illegals already here is
  • how laws like the new Arizona one are an insult to basic American values

Wednesday, May 19, 2010

Greek Crisis Looming for America?

Will the recent debt crisis in Greece one day be echoed here in America? There is a lot of reason to believe it will, and soon, unless we get our government deficits at federal, state, and local levels under control.

In "European and American debt crises signal an era of austerity,"in today's Washington Post, columnist Michael Gerson points out that "In 2009, the federal government spent $1.67 for every $1 it collected in taxes." The extra 67¢ has to be borrowed and becomes part of our national debt.

Our national debt is bankrolled in large part by China and other foreign countries. Banks in those lands buy securities issued by the U.S. Treasury. To get them to do that, the Treasury pays the banks interest. Right now the interest rate is low, because the perceived likelihood of our failing to pay back our solemn debts is nil.

But as the size of the accumulated debt rises with respect to our annual GDP, our creditors will rightfully become nervous and insist on higher interest rates.

That's what's loomed over Greece in recent months. Certain other European nations may be in the same boat. And we may be soon, too. Post columnist Robert J. Samuelson writes in "The welfare state's death spiral" that:

Greece is exceptional only by degree. In 2009, its budget deficit was 13.6 percent of its gross domestic product (a measure of its economy); its debt, the accumulation of past deficits, was 115 percent of GDP. Spain's deficit was 11.2 percent of GDP, its debt 53.2 percent; Portugal's figures were 9.4 percent and 76.8 percent. Comparable figures for the United States -- calculated slightly differently -- were 9.9 percent and 53 percent.

The welfare state's death spiral? Dramatic phrasing but, maybe, yes.

The "welfare state" is what "entitlements" such as Social Security and Medicare are all about. Government entitlement programs are duty bound to provide people with money to cover certain of their needs such as financial security in old age.

The recently passed health care reform is an entitlement. It subsidizes those who cannot afford health insurance, while at the same time making sure that adequate insurance coverage will be available to them.

Where does the money come from which the government duly provides to those who are deemed entitled to it? If it doesn't come from tax revenues, it has to come from somewhere else. For every dollar Uncle Sam collects in taxes, he has to find an additional 67¢ elsewhere. Hello, China!

Pundits are saying we can't keep it up. The 67¢ figure, already high, is due to rise dramatically. As the deficit soars, our national debt will too.

George F. Will, in "Greece and GM: Too weak to fail":

America's projected $9.7 trillion in budget deficits in this decade will drive the nation's debt to 90 percent of GDP (Greece's is 124 percent).

What can we do? Some options:

  • Raise taxes — i.e., impose higher tax rates on incomes and other things
  • Impose new kinds of taxes like a value-added tax
  • Lower non-entitlement government expenditures
  • Reform entitlements — e.g., raise the minimum retirement age
  • Grow the economy such that incomes and other things we pay taxes on go up

The pundits are pessimistic about all of these, and there is no magic bullet.

Other solutions get mentioned, such as devaluing the dollar so the goods we make are cheaper for foreigners to buy. If they buy more from us, it will help fuel economic growth and bolster tax revenues.

All of these solutions are politically or economically problematic. Raising tax rates and/or imposing new taxes offends the political right. Entitlement reforms offend powerful interest groups who usually support Democrats. Reducing non-entitlement expenditures is easier said than done. And if there's a way to juice the economy, we'd be doing it already.

Post business columnist Steven Pearlstein writes in "Solving the deficit problem requires an open mind, common sense and courage" of his blueprint for a solution:

... we can safely run a deficit of 2 percent of GDP. That suggests a "hole" to fill of about 5 percent of GDP.

Federal outlays are due to be about 26 percent of GDP, while tax revenues will come to about 19 percent. The difference is 7 percent. If we shrink the deficit to 2 percent of GDP, we'll be OK. But how do we fill that 5 percent "hole"? Pearlstein:

The compromise I propose is a 50-50 split between tax increases and spending cuts in the medium run, rising to 60 percent spending cuts as limits to entitlement spending start to compound.

Pearlstein wants to:
  • Hold federal health spending increases (Medicare, Medicaid, premium subsidies) to GDP growth plus 1 percentage point a year, rather than the GDP-plus-2.5 percent that has been the norm.
  • Raise the eligibility age for Social Security and Medicare by one month for each two-month increase in average life expectancy.
  • Slowly reduce the cost of living increases on Social Security benefits for wealthy seniors ... while slowly increasing their Medicare premiums.
  • Limit growth of "discretionary" spending -- defense as well as domestic -- to the rate of inflation, except to pay for wars, natural disasters and safety-net spending during recessions.
  • Impose a new, broad-based value-added tax of 6 percent, with rebates to low-income households. (A value-added tax is a fancy sales tax. It would hit low-income families the hardest, since a greater portion of their income is used to buy stuff.)
  • Raise corporate tax revenues by 5 percent by closing loopholes, while at the same time lowering corporate tax rates.
  • Tax wages and salaries and short-term capital gains at only three rates: 17 percent for income from $50,000 to $150,000, 27 percent for income between $150,000 and $250,000 and 37 percent for income above that. This would represent a tax hike for the well-to-do, while an increase in the standard deduction and personal exemptions will mean no tax is paid by a family of four with income under $50,000.
  • Reduce the Social Security payroll tax slightly to 12 percent and over time impose it on wages and salary up to $150,000, up from the current cap of about $110,000.
  • Raise the Medicare payroll tax slightly, to 3 percent, and apply it to all income.
  • Replace the federal gasoline, diesel and jet fuel taxes with a carbon-based transportation fuels tax, set at a rate that would raise $25 billion more annually. (This carbon tax might help reduce greenhouse emissions and forestall global warming.) All revenue from the tax would go to a new transportation infrastructure fund, so it could be considered an investment in America's economic future.
  • Eliminate the inheritance tax, but require all estates to pay any deferred and unpaid capital gains taxes on all assets before any distribution to heirs.

Most of these wonky changes are calibrated, equal-opportunity offenders. Lowering their tax rates, for instance, might mollify corporate poohbahs somewhat, in exchange for their tolerating closing cherished loopholes.

Let's assume that Pearlstein's laundry list would just fill in the 5 percent hole. What would happen, then, if even one of his proposals couldn't get enacted, owing to political opposition? The hole wouldn't get completely filled in, unless Congress approved compensating replacement measures. Such measures would be sure to be politically more anathema than Pearlstein's, not less.

In other words, good luck.

Wonky, incremental, politically calibrated changes of the sort Pearlstein recommends, if they could ever be enacted as a package, might do the trick. But the odds are long that they could be bundled together and overcome the vaunted Senate filibuster. If they couldn't get passed, and if China and others wouldn't let us get away with not filling in the hole, then what?

Non-incremental change is the only other alternative. The death spiral of the welfare state ...

Wednesday, March 24, 2010

Health Care for All, Yes!!!

The shouting must have been audible on the moon yesterday when President Obama signed into law the health insurance reform bill, after a year of political turmoil. Some of the shouts were of joy, others of anger.

To this "old-style liberal," the moment was beyond historic. We were present at the minting of a new fundamental right, the right to adequate health care for all Americans.

The pundits from the right and from the left all had it pretty much correct on the op-ed page of The Washington Post yesterday, at least if you strip out the pejorative bias from the conservatives' columns. Arch-conservative George F. Will wrote in "A battle won, but a victory?" that

The accounting legerdemain spun to make this seem affordable — e.g., cuts (to Medicare) and taxes (on high-value insurance plans) that will never happen — is Enronesque.


Liberal Eugene Robinson, meanwhile, wrote  in "The health-care bill: A glorious mess":

Even when the "fixes" that have to be approved by the Senate are made, the health-care bill will still be something of a mess ... It may take years to get the details right. The newly minted reforms are going to need to be reformed or at least fine-tuned, and those will not be easy battles.


They are both talking about the same things, among them the notion that (as moderate-conservative Michael Gerson wrote in "Obama shows a president can be both strong and wrong") "cuts in ... Medicare will [have to] be used to finance someone else's entitlement." To wit, there will have to be cuts in today's Medicare program to pay for the freshly minted health insurance entitlement for those under the age of 65.

If the "fixes" bill passed by the House alongside the main health bill passes the Senate and Obama signs it, the combined legislation "would cut an additional $60 billion [above the Medicare cuts in the main bill], bringing total cuts to the program to more than $500 billion over the next 10 years," according to the Post article "With Senate 'fixes' bill, GOP sees last chance to change health-care reform." That $500 billion would go largely toward

  • paying to help the states expand Medicaid eligibility under the new law to cover individuals and families with incomes up to 133 percent of the federal poverty line
  • paying for tax credits that will be used to subsidize purchases of health insurance on state-run exchanges by those who don't get insured by their employers, who aren't eligible for Medicaid, and who have incomes up to 400 percent of poverty ($43,320 for a single individual, $88,200 for a family of four)

In addition to promising cuts in Medicare, our existing federal health insurance program for those 65 and older, the new law imposes a tax on high-cost health insurance polices — one that supposedly takes effect in 2018 — and it creates a Medicare payroll tax on investment income for individuals earning more than $200,000 and for families earning more than $250,000 a year.

Future Medicare cuts, a union-offending tax on "Cadillac" health plans, an added payroll tax on high-earners: these are all postponed, politically poisonous promissory notes that were built into the health bill to keep it from busting the budget and scaring off deficit hawks ... among Democrats, that is, since no Republicans voted for it. Can we be frank? Not many people one either side of the ideological divide think all those things are likely to come to pass, on down the road. Thus Will's mention of "accounting legerdemain," Robinson's reference to "years to get the details right," and Gerson's concerns about how we are really going "to pay for the new health insurance entitlement."

Actually, some of the parameters of how to pay for it are already set by the new law. For one thing, the "young invincibles," people in their 20's and 30's who are never sick and often don't have health coverage today  — they prefer a higher wage instead — will be forced into the risk pool. Insurance of any type, health or otherwise, is all about risk pools: those who don't receive payouts in effect subsidize those who do. In health insurance pools the well who never visit a doctor's office subsidize the sick who do — but only if the healthy are part of the pool in the first place. If they opt out, the premiums they or their employers would otherwise pay are missing from the pool and can't be used to buy care for those who get sick. Under the new law, anyone who voluntarily refuses health insurance will pay a penalty of at least $695 a year.

Another how-to-pay-for-it parameter is that your taxes and mine will be used to furnish insurance for the poor (Medicaid) and for the middle class up to 400 percent of poverty (tax credits to buy coverage on exchanges).

To this blogger, though, those are details. The key thing is the word entitlement. From now on, every American is entitled to insurance to pay for health care. Age doesn't matter. Pre-existing conditions count for nothing. You can't have your insurance cut off if you get sick. If your job doesn't cover you, you can get insurance on your own. If you can't afford it, you'll get a subsidy.

So there. We'll figure out how to pay for it later.