Wednesday, February 16, 2011

MeanMesa Cuts the Budget

If one could imagine a group of risk averse, codependent doctors circling mindlessly around a dying patient who needed surgery, the picture might begin to resemble the "budget slashing" charade unfolding in Washington.

"I don't want to use up our favorite bandages!"

"I think it's disgusting when all that blood comes out!"

"We shouldn't start until there's someone here to blame if we screw up!"

"We could just give him a haircut.  His insurance will still pay when he dies."

You get the idea.  There are so-o-o many "sacred cows" grazing in the Congress.  Worse, the cow path through the vale where "sacred cows" become "oxen gored," hasn't seen a bovine traveler for years.  The supply side clan continues to rage forward in some kind of hypnotic spell, transfixed with the idea that the whole problem is simply not further lubricating the production of goods which no one has the money to buy.

The handiest of all "talking points" predictably include the phrase "costing jobs."  The least handy of all talking points meticulously avoid the phrase of "increasing consumer incomes."  The worst nightmare of the hypnotists is something which might drift into the question: "After we spent all this money, why is our country still falling apart?"

(image source)
 A "dark humor" cartoon from Think Progress

Well, although the patriots in the House have bravely set their targets on the poor, the sick and the elderly, MeanMesa thinks there actually are  both some political plans and some budget cuts which might make sense.  Let's take a look -- by the numbers -- at a few possibilities.  Many of these ideas have been posted before on this blog.

1.  Social Security

Although Social Security is entirely self-financed and does not manifest itself as an element of the deficit (unless you are a "fact free," wing nut pundit on the radio...), projections of future shortfalls are always added in hopes of further aggravating the deficit's fear factor.  The ultimate aim, of course, is to hand the Social Security Trust Fund over to Wall Street.

Solution:  Raise the cap on Social Security deductions to a level high enough to handle the load.  Social Security Administrators have already -- long ago -- doubled the contribution rates to accommodate the Baby Boomer influx of old people.

2. Medicare

Medicare is a huge problem, but not an unsolvable one.  As an unfunded Republican designed program, what we see before us is little more than an unwanted child.  Even though we see successful health care systems all around us, the wing nuts have invested heavily (for example, $1,250,000 per week since the health care "debate" began two years ago...) to guarantee that absolutely no one can figure out how to do this.

Solution:  Develop a credible revenue source, then design a program which can actually be paid for with the money available.  Naturally, everyone will hate the "final solution," but, at that point, it will at last become a political matter instead of simply a "feeding plan" for insurance companies and pharmaceutical manufacturers.  Further, draw a limit on the medical procedures which will be funded which is consistent with the amount of money we have chosen to spend.

After a few starving old people are seen dying on the side walks, Americans may find the inner strength to demand that we can, finally, buy what we want.

3. Foreclosures, Exemptions and Mortgage Loan Guarantees

There is probably no future in trying to pump money into failed mortgages.  Over priced houses purchased by unqualified buyers producing bogus security mortgage packages sold to under informed investors is a scenario which enters the realm of the "grateful dead."  Both the Americans and the investors need to finally realize that these were bad investments, and that this process was going to cost lots as the full reality of the mess "comes home to roost," even if "home" is Saudi Arabia.

Meanwhile, however, a new law which requires the holder of any property's mortgage to pay the corresponding property taxes would both decelerate the  ravaging appetite to foreclose everything while limiting the damage to the communities where the malfeasance occurred.  The law?  Simple.  If you hold any portion of a mortgage, you pay the property tax for that part of the property.

Solution:  The Federal Government gets completely out of the mortgage encouragement business.  The tax exemptions on mortgage interest payments ceases.  Fannie and Freddie are privatized for a future existence without loan guarantees financed by tax money.

America is already moving solidly toward becoming  an "apartment dwelling" society.  So be it.

4. Wall Street Speculation and High Speed Trading

Unregulated stock, bond and commodity trading has shown how lethal the practice can be in the last decade.  Still worshipping at the altar of "market self-correction," the U.S. economy has become frighteningly similar to an uncontrollably accelerating Toyota.  Even though the most savage, avarice soaked "capitalists" in the system will scream bloody murder at any effort to rein in the unavoidable damage they are causing, clamping down in this chaos will, in the end, move very positively to sustain the value of the dollars they are extracting in their frenzy.

Solution: Institute a sweeping structure of temporary windfall profits taxes.  Start small, then increase the take annually up to a predetermined level, then begin to gradually sunset them, all based on market and revenue levels, not corrupt politics.  Just like the Peoples Republic, an imposed economic plan.  Corporate oligarchs not wishing to pay the windfall profits taxes will have to reinvest in their companies.  If the idea can survive the Congressional "pirate clan," the re-investment side can be, domestically, heavily protectionist or even tariff driven.

As to Wall Street, a per unit issue stock trading tax can be imposed.  Every stock or bond sold and bought will pay the general fund tax base a fixed percentage of its price.  The rate can start low, incrementing upward annually along a pre-determined schedule.  This will incentivize investment for growth rather than for speculation.

5. Agricultural Subsidies

The existing "patchwork" structure contains almost no plan whatsoever for the support of comprehensive agricultural goals for the good of the country.  If one were to analyze what's currently in place, the conclusion would be that it has been designed to blindly funnel tax money to the "owners" of the lobbyists who promoted each little piece of it.  This is huge federal tax money, and the return on the investment has been a decades long chaotic feeding frenzy.

Solution:  Dump the entirety of existing legislation and start over with a rational, national goal as a guide.  MeanMesa would like to see the annual $250,000 subsidy check to Michelle Bauchman's "farming family" go away on the first day of the debates.  The corporate benefactors of agricultural subsidies have justified their good fortune as a necessary component to manipulating the food market.

This solution continues in the next item.

6.  National Health Food Policy and Tax

The current strategy is that bad food -- sodas, fast food burgers, corn syrup, etc. -- should be subsidized so long as the respective markets for the products are strong and their lobbyists are well paid.  This crazy policy dives directly into the incredibly expensive national obesity, cancer and diabetes problems, much of which are paid for by federal tax dollars.

Solution:  Neither farming, manufacturing, marketing or other support subsidies for any of these products should come from tax dollars.  How can we tell which ones are on the list?  Any food product which costs health care dollars qualifies.

The Military Budget

For this group of budget items, we'll just go directly to solutions.  MeanMesa visitors are already quite familiar with the problems.

7.  Limiting Costly Military Adventures

Institute a new policy of only "declared war."  The country will start saving right away if the decision to spend "war making" money has to face the political liability of requiring a "Declaration of War" before it can begin.  Of the $14 Tn national debt, roughly $4 Tn has been spent in Afghanistan and Iraq.

8.  Eliminating Military Contractors

Although these contractors might possibly make sense with respect to cost effectiveness in combat theaters, the inherent weakness deriving from their manipulation of Congress and the DoD totally outweighs their possible advantages.

9.  Eliminating Useless Weapons Systems

The U.S. military is already a gigantic junk pile full of Cold War systems.  Our latest "adversaries" figured this out quite quickly, designing a military response which could credibly bankrupt our country while costing very little.  We are not talking "a few little tweeks" here.  

The current defense budget is around half a trillion dollars per year.  It needs to be at least a third less than that.  The Pentagon procurement practices, along with the greedy Senators with bomb factories in their states, need to be crushed, exposed, disassembled and totally reorganized.  This is not only a budget issue, we are rapidly arriving at a point where our fundamental military profile is so cost ineffective that we couldn't fight a legitimate war if we had to.


Two political investments can lower the budget deficit by tremendous amounts.

10.  An Open Review of All Tax Subsidies

Dozens of American corporations are wallowing in massive tax subsidies.  These are not subsidies which take the form of actual checks from the government, but rather tax subsidies which eliminate federal revenue by providing exemptions for all sorts of corporate costs which would, otherwise, be taxable.  For example, the poor starving Exxon/Mobile Corporation receives an average of $16 Bn per year to help make ends meet.

This is a gigantic pile of tax money being redistributed from tax payers to stock holders.

Solution:  Even before we begin salivating over tax reform, start a House Committee which will review every tax subsidy on the books.  Further, the conclusions must be public.  Very public.  A rather long list can be prepared of all the revenues the government is failing to collect, and each case will either make sense to tax payers or not.  MeanMesa thinks this would be a great job for the House Republicans if they can find time in between passing bills against Sharia Law in Oklahoma, etc.

11.  Merchandise the Budget

Much of the corruption and other mischief which habitually drives our national budget into the mud survives simply because the American public has been carefully convinced that understanding the thing is beyond our human capacities.  MeanMesa finds this laughable.

Solution: It is high time for the U.S. budget to be honestly condensed, edited and packaged into a form which can sit on the kitchen table of every American family interested in knowing where the money is going.  When House spending comes up, we should all have a chance to understand what is being done.  The Federal version of the budget is eight thousand pages long, and not by innocent oversight, either.  The wing nut version is five sentences of incendiary half-truth, and not by innocent oversight, either.

American citizens and tax payers are supposed to make sense out of this mess so they will be an "informed electorate" when voting time comes around.  Right.  As citizens and tax payers, we are fully justified in demanding significantly better performance.  MeanMesa thinks this would also be a good job for the "deficit hawks" in the House.

As we go to work on our national debt, both progress and failures must be  made very public.  Why would anyone think that we should simply "fly blind" into a multi-trillion dollar project without demanding some very serious, very comprehensible  "progress reporting?" At least enough "progress reporting" to vote a little better -- a lot better -- than we have been doing lately.

For visitors who have threaded through this lumbering post, please accept MeanMesa's gratitude.  If any of these ideas have resonated as solid common sense, add a few more of your own!  Then what?  

Make a clever sign communicating your plan and walk down Central a couple of afternoons when the weather is nice!  Start a blog and show horn your friends into reading it!   Talk to your neighbors about these things!  Read a high school civics textbook!

Most important, start pumping this stuff into your Congressman's office!  Add a few troubling little innuendos about how you plan to vote in the next election!

Enough said.

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