December 13, 2011

This President has Never been about Jobs, but what?

by Steve Dana

President Obama often talks about how everyone needs to pay their fair share and then points to successful citizens as taking advantage of the system; but in a negative way, rather than using their example of success as encouragement for others to be successful as well.  At a time when many Americans are struggling, Obama and many of his ilk are angry because some Americans are not struggling so much.

Think about all the immigrants who became the foundation of our country over the years.  When asked why they sacrificed everything to come to America, they answered with two things; liberty and economic opportunity.  They wanted to be free and have the chance to work hard and be successful in America.

Liberty and Economic Opportunity!

When the Democrats try to rationalize how folks who don’t pay a dime of federal income tax are paying more than their fair share, they compile all the increases in their cost of living as evidence supporting their case. 

So who or what is driving up the cost of living for Americans?

The short answer, your government!

Who wrote the tax code that gives General Electric the loopholes so they pay no tax?  Who wrote the regulations that told banks to make loans to folks who couldn’t afford to pay for them?  Who passed the laws that enable a single person to file a frivolous lawsuit that prevents a factory from being built without either proof or economic penalty for failing to provide proof?

Don’t get me started about why food cost has risen so much!

Once again, your government!

I remember when he was Candidate Obama he said that by necessity energy costs would have to increase.  He didn’t explain too well why it was necessary but knowing that higher energy costs would unfairly target lower income Americans he spent the past two and a half years working to raise energy costs.  I think the strategy was to raise the price on current cheap energy so the really expensive “ALTERNATIVE ENERGY” companies the President and his cronies wanted to promote appeared more competitive.  We all know how that worked out with Solyndra and others.

It appears that strategy worked as far a supporting Obama’s core supporters, but hardly Main Street Americans.  Could it be that average Americans are not his first priority?  Think about those union construction workers not going to work because of the Keystone Pipeline deal being delayed.  Could it be that the rank and file union workers are not his first priority either?

At a time when the President talks about energy independence from foreign sources, he turns his back on American energy companies and offers billions of American dollars to Brazil to develop their petroleum resources which just happen to be found in deep water off their coast. 

So the President is subsidizing oil exploration and development for Brazil so we can pay them for the foreign oil rather than Saudi Arabia or Kuwait while depriving American workers of family wage jobs on the oil rigs and in the refineries here at home.

I would think that if deep water drilling is as risky to the environment as the President suggests, then it shouldn’t matter if it’s in Louisiana or Brazil, should it?  And, maybe if we shouldn’t be subsidizing American oil companies, certainly we shouldn’t be subsidizing foreign oil companies either.  And if it’s good for the Brazilian economy to create jobs in the petroleum industry it’s got to be really good for Americans too, right?

When the administrator of the Environmental Protection Agency was asked in a Congressional hearing whether his folks ever considered the economic impacts of the regulations they adopted, he indicated that they did not.  So what’s so important about that?  Well, think about the Endangered Species Act and the Clean Water Act for starters.  Your utility bills in your homes are impacted by changing standards for you local water and sewer providers.  Your PUD rates are severely impacted by regulatory changes for our hydro-electric and nuclear energy producers.

Folks in my small city experience these impacts every day.  In 1992 we built a state of the art sewage treatment plant designed to meet current and future discharge standards as outlined by the Washington State Department of Ecology but in 1993 when the plant was completed, Federal regulations had changed to the point where the plant was out of compliance before it ever processed a gallon of sewage. 

Since I was Mayor at the time, I took a lot of heat for that but we did what we were told by both the state and federal regulators at the time.  Those changes affected thousands of other small cities and millions of people; and not in a positive way.  When asked whether he was concerned about those folks who had been damaged, a DOE staffer replied that it wasn’t his job to be concerned about economic hardships.

There is no doubt that the cost of living has increased substantially, but I suspect that if you want to point fingers, the Democrats are more responsible for those increases than Republicans.

Our challenge today is to get Americans back to work at jobs that will support families.  That means the government has to roll back regulations that strangle job producers while still considering the mission of their agency.  The EPA still needs to do a job, but not at the expense of our economy.

Those Occupy Wall Street protesters may have a legitimate beef, but the culprit is not the guy that followed the rules, it’s the government for making the rules.  How many times have you yourself said “just tell me what the rules are so I can get on with my project?”

Given the choice of creating family wage jobs in the energy industries and even the financial industry or inhibiting job creation with more excessive regulation, the President and the Democrats consistently choose more regulation.  What does that tell you about their priorities?

Then take a look at their fall back position on every issue today; raising income tax rates on everyone earning more than a million dollars per year.  Even though studies show that the revenue needed to solve even one of the problems would not be collected by the increase they propose.  Remember the discussions about raising the debt ceiling, RAISE TAXES ON THE RICH!  Remember the Super Committee, cut spending by RAISING TAXES ON THE RICH!  Remember talks about Entitlement Reform, RAISE TAXES ON THE RICH!

Our problems have gotten so big even Bill Gates and Warren Buffet can’t come to our rescue.

Why isn’t anyone talking about that?

Raising taxes on rich folks will not solve a problem with spending that increases 8% per year, every year while the economy only grows at 2%.

November 27, 2011

Is Slashing Defense our Best Choice?

by Steve Dana

Facing the possibility of seriously cutting the Defense Budget, maybe we should think about withdrawing our military forces from bases located in foreign countries? Wouldn’t we save a bundle if we didn’t have our forces spread around the world? Considering the way many of them feel about us, pulling out seems like a win/win for everyone; right? How many of the host countries celebrate our presence on their soil?

I am not advocating that we withdraw our forces, quite to the contrary, but shouldn’t we think about it? Doesn’t it make sense that we reaffirm that assumptions regarding our national interests made many years ago have not changed? At the same time, our supposed allies can reconfirm that our presence is advantageous and desirable to them as well or maybe not.

We pay a lot to have a military presence in many of these countries which enables the host countries to allocate a much smaller portion of their own budgets for their own defense and military while substantially increasing our cost. Keep in mind that the cost is not just measured in monetary form; our military forces are made up from millions of young Americans that we ask to go in harms way to protect freedom around the world. Maybe I would feel different if our treaty partners asked their own kids to make the same sacrifice.

Since the European economy is significant, aren’t they capable of paying for their own forces? So what portion of our cost to protect their interests do they pay?

If they beefed up their own forces, couldn’t we support them from bases on American soil? And while we’re at it, who are we protecting the Europeans from? Since we already let almost every European country into the North Atlantic Treaty Organization (NATO) aren’t they all our allies now? So who is the threat? Since we didn’t let the Russians in, they must be the threat along with China since nobody else has the ability to project force significantly beyond their own borders.

Besides America, who funds NATO?  Besides America, whose forces constitute the muscle of NATO? Without America, what happens to political stability in Europe if we pull out of NATO?

What happens if we give NATO a notice of intent to reduce participation over the next five or ten years?

The same questions could be asked about mutual defense treaties between America and a bunch of Asian countries like Korea, Taiwan, Japan and the Philippines. 

If we closed American bases in all those foreign countries, what would happen besides our Defense Budget going down? Or, would it go down? Would the world become less safe if the United States of America did not have bases in all these places supplemented by a Navy that patrols international waters around the globe? Isn’t that an important consideration?

How would a withdrawal of American forces affect the aggressive tendencies of countries wanting to have a louder voice in international politics?

When you get right down to it, isn’t our military presence around the world the only reason things are as safe as they are? What is that worth to our allies and ultimately to our own people? Shouldn’t we be asking that question?

If our Army had not driven Iraq out of Kuwait when Saddam Hussein invaded in 1990, what would the Middle East look like today? If our troops weren’t stationed in Saudi Arabia, would Iraq have control of all their oil too? How would that affect our national strategic interests or more importantly, how would it affect our NATO allies? Would a Middle East controlled by the Muslim Brotherhood be a threat to Great Britain,France or Germany?

What would those countries have done had we held back and done nothing in 1990?

Consider the plight of Israel. If our forces were not in close proximity to that country, what do you suspect would happen to them? The fact that they are allowed to have nuclear weapons means they will put up a good fight if they are attacked, but there is not much protecting them from an increasingly hostile Middle East.

The lessons we learned over the years taught us that it is easier to defend our own shores if we maintain a presence in those foreign countries. If we prevent destabilization of our “allies” they are more likely to actually be allies.

There are good reasons for America to have presence in all these far off foreign countries, both tactical and strategic. I’ve listened to the rationale from knowledgeable retired Army officers I respect so I don’t doubt that we need to keep our forces in place, the problem is that not everyone shares my concern about the intent of many of our supposed allies and clearly many of the countries that would benefit if we failed.

So is slashing Defense our best choice as we work to balance our budget? I’m concerned that many in our own country are prepared to find out the hard way.

November 16, 2011

Sequestration or Castration; You Pick!

by Steve Dana

We have just under a week for the “Super Committee” to complete the work outlined in the Budget Control Act of August 2011 and the progress reports are not encouraging.  Characterizing the committee as “Super” may have been a mistake considering every aspect of their work plan has been anything but super.

In my view, when the Budget Control Act was passed, Republicans gave away the farm.  They gave the President and Congressional Democrats the ability to raise the national debt by 20% over 16 months without one meaningful concession; not one!

Politicians talk about cutting spending by thirty or forty or a hundred billion out loud then follow that with “over the next ten years” in a muffled voice.  I’m not sure it really matters what they say since they don’t adopt and follow budgets anyway.  But that was the deal.  They would reduce spending in budget cycles starting in 2013 out into the future when many of them will be long gone and out of office.

I can only imagine how good it felt standing up to the microphone and looking into those TV cameras telling viewers how we negotiated hard and got the best deal we could for not just our side, but for the American people.  “We agreed to increase the national debt by another 20% between now (August 2011) and January 2013 (just before inaugurating the next President) in exchange for spending cuts totaling $1.2 trillion over the next ten years to be determined by a “Super” Committee made up of twelve members of Congress; half from the Senate and half from the House; half Democrats and half Republicans before Thanksgiving of this year.  Failing in that mission, a process called Sequestration will be implemented where every department will suffer equal percentage budget cuts to achieve the stated goal.”

For the Democrats on that podium, that was a euphoric feeling, knowing they had bent over the Republicans again.  Don’t you remember a sly smile from Harry Reid as he talked about slashing $1.2 trillion, knowing full well it would never happen?

For the Republicans on the podium, I’m not sure what they felt. I know they should have felt like a kid in Jerry Sandusky’s shower room.

I guess I’m too damn stupid to see how that agreement was in any way good for Republicans; on any level.  And frankly for the American people either.  But what do I know, I’m just a fry cook?

Number one, we authorized increasing the debt when we said we wouldn’t. 

Number two, we agreed to a spending reduction process that had no meaningful reference points and no down side for the Democrats.  Sure, cutting some of those social programs would cause the Dems to wince a little, but considering the hurt it would cause for R’s it was a hit they felt was well worth it.

If the Super Committee cannot negotiate a deal with the Republicans they just punt and allow the “Sequestration” to cut the budget which will target Defense spending at a time when we have already cut their budget significantly. 

Now as we approach the drop dead date for the committee to finish their work, we’re still hopelessly deadlocked.  No, wait, the Republicans are starting to talk about some tax increases as being okay.  The Speaker is warming up to the idea of a tax increase for those rich bastards just so we never have to face the prospects of SEQUESTRATION. 

How can the Republicans be afraid of Sequestration at this point?  What they should have been afraid of was the CASTRATION they went through when they voted for the Budget Control Act at the start of this process.  Were they just stupid or is the fix in?

The National Debt will increase to $16 Trillion, tax rates will be raised for rich bastards and spending will not change one iota.

I’m beginning to believe Jack Abramoff was right when he talked about how lobbyists own our elected officials.  It may not be Jack pulling the strings, but someone with interests different than mine certainly is.

November 14, 2011

Super Committee Agonizes about 3.2% Cut

by Steve Dana

Did you ever wonder why when the government decides to increase spending it happens next week but when they talk about reducing spending it’s always in budget cycles five to ten years out?  Does that really make any sense?

I really only care about what they will cut in their next budget and the one after that because there is some likelihood those same elected officials will still be around to be held accountable.

The Super Committee is agonizing about reducing spending somewhere in the neighborhood of $1.2 trillion over ten years.  Considering the fact that federal spending increases 8% per year and that is considered a “no growth” budget.  So what are they cutting the $1.2 trillion from?

Where else in the world could that happen? 

If the budget is $2.4 trillion per year in 2011, then a no growth (8%more compounded) budget for 2012 would be about $2.6 trillion; $2.81trillion for 2013, $3.02 trillion for 2014 and on up to a total of about $37 trillion over the next ten years. 

Remember, that is how much cash the federal government will spend over the next ten years when they consider an 8% increase in spending a no growth budget.  They say they are trying to reduce spending by $1.2 trillion during that ten year period which amounts to about 3.2% of the $37 trillion.  And they are agonizing?

I’d settle for a no growth budget being a zero percent increase year over year and no cuts.  If they just capped spending at $2.4 trillion per year then over ten years we would only spend $24 trillion instead of $37 trillion.

Then if you consider that the government only takes in $1.8 trillion per year at the current level and that is not subject to the 8% growth rate.  Generally a revenue growth rate of 3-4% is considered good and 5% is great.  Let’s assume for this simple analysis a growth in revenue of 3.5% per year over the next ten years.  Revenue received totals only $21.8 trillion when compounded.

Our current national debt is about $14 trillion and without reducing spending but actually increasing spending 8% year over year and experiencing 3.5% growth in revenue each year our national debt increases by another $15 trillion to about $29 trillion.

And the Super Committee is agonizing about cutting $1.2 trillion.  There is also word that they are trying to make a “really big deal” and cut $4 trillion over ten years or slightly more than 10% of the $37 trillion total.

Could this discussion be any more absurd?

We need real spending cuts not a slowing of the growth rate.

If that weren’t bad enough, consider how you react when you are elected to Congress in 2016 and someone trots out this agreement to cut spending in some future budget cycle.  Do you feel obligated to cut spending or kick the can to the next guy?

What happens if no future Congresses agree to make the cuts promised in 2011?  What obligation does a future Congress have to honor agreements made by the Super Committee?

In a word; NONE.

It would be a good start to adopt a budget because that would indicate that the Senate finally came to the table.  It would be better if we capped spending.  It would be great if we could actually reduce spending.

I’m thinking I hear a kicking sound!