Friday, January 07, 2005

Your Tax Dollars at Work

If you pay taxes, I'm sure you like to know where your dollars are going. Well, here you go. The Bush administration paid Armstrong Williams, a radio and TV commentator, to plug the No Child Left Behind Act. As the article states, Williams then admitted that many would see the arrangement as unethical. However, this clearly unethical behavior does not seem to be getting press. I think it is obscene that the government has to produce propaganda to try to "sell" its legislation.

So let's get this straight:
1. Society hires a group of people to enact legislation
2. The group of people enact legislation and allocate society's funds
3. The group of people use society's money to advertise their legislation to society

I'd like to reframe this same principle in a different context. Let's say that I hire someone, George, to paint my house. I tell George that he can paint my house and I will pay him money for his time plus any materials that are required. George doesn't like to paint that much because it's "hard work". It makes his head hurt.

Let's say that George does a pretty bad job, and the time has come for George to show me what he has been working on. Because he knows he did a bad job, he decides to hire a celebrity guest, Mel Gibson, to show me what he has been working on in the hopes that I will think he did a good job. He brings Mel to my house to present the paint job to me. Of course, a bad paint job is a bad paint job no matter who presents it, so I'm a little upset with George. I agree to pay him for the work done, but promise to never hire George again.

When I ask George how much I owe him, he tells me $250 for the paint, $1500 for the labor, and $2500 for Mel Gibson. I pay George the money, but in the back of mind I wonder if it is weird to pay someone to pay a third party to manipulate me. Hmmm....

That is what our President is doing, and the America people love him for it.

Friday, December 17, 2004

Information Sources

I watched the third and final Presidential debate on MsNBC. As soon as the debate finished up, the two candidates walked to center stage, shook hands, and greeted their family members as they joined them. Simultaneously, one of the political pundits from the Hardball Panel, Andrea Mitchell, started to discuss how large Bush's head was compared to Kerry's when shown side-by-side on the TV monitor and how that would fare for him politically. Mind you, this commentary was not buried away as a side-note somewhere, it was the very first thing that anyone said after the debate was over.

Is that really what we care about in selecting our political leaders? Cable news media has to be some of the worst garbage on television. I think that Americans should turn off their televisions, find accurate and thoughtful sources of information, and dialogue to find common ground and construct solutions. We all have more in common than not, even though the media tells you otherwise.

Here are my recommendations for unbiased, unfiltered, no-spin news, although I admit to tivo'ing The Daily Show.

C-Span
Newshour with Jim Lehrer
Congressional Budget Office (a personal fav)
The Economist


Results, Not Rhetoric

In February 2004, Bush made a promise to the American public. He said that he would reduce the federal deficit to 1.6% of the Gross Domestic Product (GDP) in five years. This is clearly only rhetoric, because what is he says and what he does are polar opposites. He wants to make his tax cuts permanent. He wants to fix social security by borrowing more money. Iraq is a money pit. It doesn't take an economist to realize that if your spending is greater than your revenue, you are going farther and farther into debt. Although I've questioned whether or not Bush understands this in the past, I have concluded that he or his administration must understand - and they just don't care.

The graph below from the Economic Policy Institute shows the current projections for 2009. The purple section of the bar shows the permanent tax cuts that Bush hopes to pass, and the white section of the bar shows the Corporate Tax Bill.



The ironic thing is that the Bush tax cut is highly slanted towards the richest Americans, and his Corporate Tax Bill is geared for CEOs, yet the large majority of the country's revenue comes from middle class, working families. Why is middle America giving corporate welfare and hand-outs to the rich? On top of that, I'm 25 years old - I'm going to be paying for this debt for years to come.

For these reasons, I don't support the Bush economic policy. He needs to bring spending and revenue into balance.

Regardless of whether you agree or disagree with the Bush economic policy (perhaps you think debt is OK), you cannot deny that Bush's rhethoric does not align with his actions. It is obvious that given his current plans, he cannot make good on his promise to bring the deficit down to 1.6% of GDP by 2009.

As the voting public, at the very least we must demand that politicians do what they say they are going to do.

Monday, December 13, 2004

Question of the Day

On my drive into work this morning I was, as I tend to do on a sleepy Monday morning, questioning the role of government in my life. I am not for complete chaos and I'm definitely not a statist, but I do believe that Americans should at least be aware of the whats, whos, hows, and most importantly, the whys of our governing bodies.

As I pulled out of bed listening to NPR, I thought of how the government provides for 10% of NPR's budget. Is that money well spent? To me it is - it is my primary source of news and provides great entertainment on the weekends. When I put together my bowl of cereal, I thought about the sales tax on the milk and the cereal. I believe it is 6% in North Carolina. What does that money go to? Lots of things, including the road construction on I-40 that I was stuck in for 15 minutes.

After my shower, I threw on my clothes and headed out to my car. When I sat down in the cold seat, I saw the inspection sticker that is set to expire early next year. Should the government make the decision about whether or not my car is safe? Are they doing that to protect me or other drivers? How much is an inspection, how much annual revenue is that, and what do they spend it on? As I pulled out on the road, I saw a speed limit sign and wondered if speed limits were necessary - yes, I guess they are...

Then, comes the kicker. As I pulled off of Fayetteville and onto the onramp for I-40, it was a parking lot. This construction project is over-budget and behind schedule. Some of the workers were behind the wheel of a bulldozer, and many more were directing the drivers while scarfing down their McMuffin and Marlboros. Maybe it was breaktime, but I tend to have breakfast before I go to work. Why is the government responsible for building roads? What motivation does the manager of construction projects have to complete projects on time or under budget? If it goes over budget, the cost is shared across the entire state. If it goes over schedule, the government can't exactly bring in another crew that will be more motivated. As for the individual employees, they aren't exactly motivated because they work from the government where the opportunity for advancement is low and a slow yet steady drip of paychecks is virtually guaranteed. Why would they even attempt to perform at a high level?

To fix this problem, we should privatize highway construction and repair. There are a few options for funding. We can continue to pay taxes and have private construction firms bid on contracts. The nature of a private firm can fundamentally perform more efficiently and effectively than a government firm. Why can they build an entire subdivision in 6 months, but it takes 3 years to widen a road?

Alternatively, it could be completely private and the highways could be toll roads. Toll roads are attractive for some reasons, but not for others. It is attractive because only the people who use the roads have to pay. It is also attractive because private organizations can build roads directly based on consumer demand. The downsides are that toll booths suck, cause traffic delays, and are unsightly, but they are improving with the tags that are automatically scanned.

Another disadvantage is that everyone may have to pay equal amounts, so someone very poor may end up paying more for transportation than they currently do. With progressive taxation (the richer you are, the higher your tax rate is), the rich pay more for government services than the poor. I think that is good, but that disappears with pay-per-use style services. If they were toll roads, we would have to put controls in place so that everyone would have the opportunity to use those roads (albeit not free) to get to work, leisure, etc. Regardless of which of the above solutions are pursued, the actual construction of the roads should be done to private firms so that it can be done quicker and cheaper.

So to get to the point, the question of the day is why is that the role of the government? Contemplating that makes the time go by faster, even when sitting in traffic.


Sunday, December 12, 2004

Why Deficits Matter

Dick Cheney has been quoted as saying that deficits don't matter. They do, and here's just a few reasons why.

The growing US deficit has forced the dollar to all time lows against the Euro. This actually is good for exporters of American products because people overseas can buy more American products. However, its bad for importers because they get less revenue when we pay the same price in dollars. In some circles, people say the jury is out on the importance of the value of the dollar as it compares to foreign currency. I think it does matter, but I won't dwell on that today.

The biggest short-term problem with the growing deficit is that interest rates will rise and foreign companies will reduce foreign direct investment in American corporations. As our deficit goes up, foreign governments feel more risky about lending money to America. This is natural - its like not getting approved for a car loan because you already have too much borrowed. This increase in risk makes it more expensive for us to borrow money because the foreign governments charge a higher interest rate. So, that adds insult to injury.

This, in turn, increases the federal interest rate at which banks borrow money, which of course increases the interest rate on credit cards and consumer products from cars to houses to computers. This pushes the cost to the consumer up so we buy less stuff. Since we buy less stuff, production decreases and the economy continues to suffer. People get laid off from their jobs because the companies can't afford to pay them, and that in turn removes that person from the universe of buyers, and farther down the rabbit hole we go.

As you can see, a complex chain of events that begins with the government spending over their limits ends with people losing their jobs. It is important for people to understand this so, as voters, we can demand that the government use fiscal discipline.

Clinton knew this and applied it. When Clinton took office, the government was operating at a $290 billion deficit. By 2000, Clinton had created a surplus of over $230 billion and Clinton's plan would have had the entire debt paid off by 2012 (yes - you read that correctly - the entire debt). (Data taken from here.) On top of that, Clinton was using the surplus to fund Social Security to prepare for the baby boomers. Under Bush's administration, officials have been borrowing money from Social Security. Now the deficit is larger that it has ever been and Bush continues to push for spending increases and tax cuts.

Does he not understand the cause and effect of deficit spending? Or does he know what he is doing and just doesn't care?

Social Security Crisis

I humbly admit that I don't have a sound solution to the Social Security crisis. I like the idea of privatizing it and making personal savings accounts, but I think many Americans don't have the knowledge and discipline required to manage their money. Are Americans too dumb to take care of themselves? (I don't mean that as a rhetorical - I really don't know!)

Secondly, making changes and not making changes will both be insanely expensive. How are we going to pay for it? Raise taxes? Decrease benefits? I think we should push the age back to 67, but not sure.

Anyway, more to come on this later... please comment if you know how to fix Social Security!

In the meantime, I'm going to be reading Michael Tanner's paper

Alternatives to the Faith-based Initiative

President Bush proposes a faith-based initiative that will allow federal tax dollars to be given to religious organizations. The "priority areas" that he has outlined are at-risk youth, ex-offenders, homeless and hungry, substance abusers, those with HIV/AIDS, and welfare-to-work families. I agree that religious organizations can have a lot to offer people in need, but this plan is bad for several reasons, listed below. Following the listing of problems with the Bush plan, I detail my own.

Corrupting the Church
If religious organizations became eligible for funds from the government, we all know the large organizations would immediately send [more] lobbyists to Washington. They would then compete against the other churches for these funds, create special interest groups, bureaucratic mechanisms and bribes, closed door sessions, and so forth. It would be detrimental to the religious environment to allow for this. It would pit the Catholics against the Protestants against the Jews competing for money while there is a progressive shift to create more tolerance and understanding among religions. What would Jesus do?

Overhead Costs
Somebody has to make the decision who the money should go to after evaluating the different options (and accepting the requisite bribes). This takes time and costs money. There is a better way to do it (see solution below).

Separation of Church and State
Our founding fathers and mothers made it very clear that our government maintains a strict separation of church and state. This was for a reason, which many Americans have forgotten. Many Protestants fled to America to avoid the religious persecution by the Church of England. We created our Constitution over 200 years ago when religious freedom was fresh in the mind of our culture. Now, this Faith-based Initiative is a step in the direction of blurring this important distinction that our great architects established.

Solution
The answer is to give the power to the tax payer. Instead of making charitable contributions tax-deductible, they should be dollar-for-dollar tax credits. Why would you give your money to the government for them to decide which church to give it to? Isn't it a whole lot easier to just give it to your church or an organization of your choosing? Of course, the appropriate limits would need to established so that the revenue lost can be equated to the amount the government spends on community services.

This solution would also much more accurately reflect the will of the people. Personally, I don't want my tax money going to an organization that doesn't teach evolution or provides a biblical justification for slavery, so I would feel raped by the government. If I could give to an organization that aligned with my values and goals, I would feel more empowered. Plus, we could all afford to give much more to charities if it were a tax credit.

In effect, each tax payer could decide to give that money to a charitable organization of their choice or to the government. I think most would elect to choose an organization, and the long-term result could be an abolishment of government community services. On the surface, this may sound uncompassionate, but it can be architected in such a way that there is no loss of "safety net" programs like welfare. If anything, I think it could increase the services and their efficiency by moving to private, non-profit organizations.

See the Forest

After all of the talk of gay marriage in 2004, I conclude that we cannot see the forest for the trees. I personally believe nobody should be discriminated against based race, creed, religion, and sexual orientation. To me it is simple - being fair is better than not being fair. I think the bigger issue at hand is why the government needs to be involved in relationships.

The progressive thing to do is allow same-sex couples to get married and enjoy all of the benefits that opposite-sex couples have. However, this only temporarily allows us to move forward. What about polygamy? Certainly if same-sex couples can get married, it only makes sense to extend the benefits to same- and opposite-sex triads, quadruples, and more. Allowing polygamy would be a much larger change to our current social patterns than same-sex couples.

Next, what about different-species marriages? Perhaps years from now the progressives of the day will find it terribly disconcerting that Man-Sheep marriage is not officially recognized by the government. They truly love each other and are in a committed relationship, but Dolly the sheep would not be allowed visitation rights. Obviously, I'm being facetious, but I think it illustrates the point.

Our culture is not seeing the forest for the trees. The government needs to have no role in managing relationships whatsoever. Perhaps I am missing something, but why does this type of thing fall within the scope of the role of the government?

To clarify one issue, I do think that the statutory rape laws serve as purpose because they are designed to protect children from being manipulated. The fundamental difference is that with statutory rape, there is a victim. With same-sex marriage, there is no victim.

Mission Statement

This is the spearheading post for the blog to define the mission and direction. This blog focuses on changing the fundamentals of what we believe regarding the government, ourselves, and beyond. Some of the core values at play include self government, personal responsibility, accountability, freedom, tolerance, compassion, diversity, and most of all, reason.

This author strongly opposes the current administration, its deficit spending, foreign policy, corporate welfare, its attempts to restrict personal freedoms, and its ever-expanding government and the role it plays in our lives. (To be fair, I think the "ownership society" has potential, but the specifics of Bush's plan have fundamental flaws.) That said, the goal of this communication channel is not to complain - it is to sharpen and share real-world, common sense solutions.

While these viewpoints are very libertarian in nature, the problems we face extend far beyond party politics. Political party is merely a label and these days, it only means what team you are on. In fact, the two-party system is a source of problems I think we can uncover through dialogue.

Lastly, my views are my own and they often change and evolve with the times and maturity. While some may see this trait as flip-flopping in a negative sense, I believe open-mindedness and reason to be a person's greatest strength and tools for growth.

This is an open blog. Active participation is encouraged through commenting, and feel free to contact me if you'd like to post.