Thursday, August 26, 2010

What Do You Do With A Drunken Sailor?

Nineteen months ago President Obama was inaugurated. At this very moment leaders of the Republican party began to voice their concerns about the deficit.

We didn’t start spending money like a drunken sailor yesterday. We began ten years ago with the Bush tax cuts, passed through reconciliation. Now Obama wants to let the tax cuts for the richest 1% of the country expire and keep the tax cuts for the lower and middle classes. Is this unreasonable? Where else is the money to reduce the deficit going to come from?

Every economist agrees that if the tax cuts are allowed to expire that the budget deficit will be reduced by about 30%, 680 billion dollars over the next ten years. Otherwise, nearly all of this would go to those making more than $500,000 per year.

Is there anything we have on the table that could reduce the deficit so much? Their argument is that tax cuts is a bad idea given the state of our economy. Will the top 1% of the earning populace rush out to Walmart and Target if the tax cuts are extended or pocket the cash and put it in the bank?

Many so-called fiscal conservatives complained about the auto bail out. This is one of the most successful government programs since the New Deal. Detroit is back in business again. Many complained about the bank bailout but most of the money that the government laid out has been repaid.

When will the fiscal conservatives put their money where their mouth is? Allowing the tax cuts to expire will only raise the tax rate about 3% on the richest Americans, a rate that is identical to that during the Clinton years and lower than the rate during the Reagan years.

I may not be an economist but this is the biggest bang for the buck, deficit reduction wise, while causing the least amount of pain to those who can afford it the most.

Thursday, August 5, 2010

Everything Old is New Again

So I am just back from Europe. A two week vacation got cut short when, at a fine Belgium Restaurant, a waiter dropped a croissant on my knee, shattering my meniscus cartilage. Actually, I tripped on a cobble stone curb. Why can’t they just pave their streets flat with cheap asphalt like we do here?

As women know, beauty takes effort. During my week long trip to Belgium I didn’t see any garbage, any homeless people, and the highways were beautiful stretches of road unpolluted by unsightly billboards. Okay, gas was twice the price but I’ll get back to that later. Everything was modern, even in a medieval city like Brugge. I remember traveling to Europe in the late seventies and having to make sure that I had toilet paper in my pocket should the need to use some occur. No more. Now Europe’s urban areas are more modern, cleaner, and human friendly than our cities, not to mention more beautiful.

How do they do it? As I flew out of Brussels I peered down and saw a nuclear power plant. I then thought about the fact that Denmark has become 100% energy independent (see They taxed gasoline and automobiles starting in the mid-seventies and used that money to modernize their energy companies and to make their businesses and homes more energy efficient.

What did we do? We gutted the clean air act, put into place by that king of liberals: Richard Nixon. The clean air act was put in place so that when power plants modernized, they had to meet certain standards. That coupled with a lack of energy legislation ensures less efficient production of electricity. It also ensures a greater reliance on coal.

I don’t mind spending a little more for food if it’s better food. I don’t mind paying more taxes if they go to the right programs. When are we going to wake up and spend more money on our quality of life and less money on oil subsidies? When will we realize that we cannot depend on the combustion engine the way we have for the past 100 years? When will we cease rebuilding Iraq and Afghanistan and start rebuilding the US?

The time may come when I visit China again and find that their cities are more modern than ours. They are on their way. Unfortunately so are we. I hope the cheap gas was worth it.