Friday, November 30, 2012

Someone might mention ... gambling (taking chances) in the public sector?

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It does seem with the latest news that while many taxpayers would like to "revolt" against the current U.S. tax regime, and that current public finances can not keep up with spending, that no one will in all probability lose an eye or a tooth over the current debate about the 'fiscal cliff' that could bring our administration to a screeching halt.  People with ordinary sense do know that stopping a federal government anywhere is a dangerous thing for its populace, but due to the current jostling and elbowing in Washington, D.C., and the coming recess for the holidays, the cries of various legislators and officials, and of the journalists who follow them, might become even more shrill after returning from the break if legislators can not come up with a bill in the meantime.  Remember the House and Senate have seemingly had a hard time even agreeing to present conditions for the 2012 Farm Bill, actually quite an important bill, but one that has many accomodations and provisions to promote modern and efficient agriculture in America at this point. 

The issue with the 'fiscal cliff' is there are apparently many wise people who believe such a difficulty should be solved with an official 'tax reform' bill that would re - work some provisions of current law and while editing that, add some new ones.  This is a recipe for more gridlock and the wrong approach as the current tax laws do not allow for either the executive or legislative, the two parties concerned here with the 'fiscal cliff,' to do proper arithmetic about what efforts will be employed to manipulate federal expenditures, revenue collection, and so forth; so it is palatable for a restless taxpaying populace who want to see a resolution to the problem, but who apparently do not see as well the kind of radical change that is needed, not just in spending cuts or revenue collection, but perhaps even in the way the federal government in our country administers the tax system. 

The main theme proposed by the President does appear to be revenue collection and reducing deductions, and this is an important and appropriate approach given the level of current federal outlays that finance federal programs, the wars, trade and commerce and so on.  Revenue collection with a ten thousand page (or more) set of tax laws in the entirety is not easy, especially insofar as loopholes open and close in this text, and because the current text allows fewer and fewer such loopholes for the taxpayer, yes, but for the federal government as well given the principle of revenue neutrality, progressive character in view of deductions, and other things like taxpayer advocacy, credits, arithmetic limitations and so on.  So how does the President allow for a new and innovative plan that closes the trillions of dollars in deficit spending that arise in the current administration?  The answer used to be that we could allow for greater scope in Treasury and Federal Reserve operations with respect to the national debt, but this seems not to be feasible any longer as to pursue such an avenue right now would adversely affect U.S. Treasury debt ratings.  Funds to the states could also be cut off, but no one really knows anyone in favour of that at this point.  What would you do?

In viewing the problem, one might just mention that the U.S. is going or recently has traversed a time of very serious and hellish wars, more serious for the federal government than the wars between Athens and Sparta, or the wars against the Persians in antiquity were for their overseers.  With this as background for any sort of fiscal reform, and the effects and fiscal and economic baggage of the Great Recession, what is the sense in even attempting to resolve the fiscal crisis?  Note in any event that something has to be done to reform the federal tax structure (revenue collection) and outlays (federal spending,) and no one has had any ideas on this for many years that are new, primarily because officials in our nation's capital have clung to a model of public finance that is kind of moderate and that fails with respect to, i.e., the expenditures of a ten - year (or more) war, the gray - market economy in which there are no taxes, nor sales nor income taxes for example; and that the value added, income and gains, etc., to the wealth in our economy right now is a catastrophe with respect to the recent recession.  The reasons for this are palpable in any federal revenue collection illustration, many of which were quite rosy and optimistic looking forward, up until the recently recent past.  The fact is, personal income taxes will have to increase, and they might have to increase greatly before eventually being reduced again, and this is especially true as the business tax rates are high enough and the Treasury only derives so much revenue from business, usually relatively predictable based upon fiscal filings, and with little potential for an increase in revenue collection, even if the executive branch compels the House and Senate to "set and forget" with new, increased business tax rates - such a thing would be anti - growth and anti - enterprising, too. 

The increase in personal income taxes, people like me used to believe, should come from the elimination of certain deductions and what those should be has been a subject of debate for years.  Increasing the rates will not comprise the mysterious and magical alchemy that will relieve the system of its deficit burden and much less of its spending and other deficit tendencies.  Right now, it does seem that any legislation could increase progressive federal rates and would at least suspend certain deductions for a period of time.  The Great Recession as its circumstances have proven, proposes no windfall with respect to federal coffers and taxes, even with respect to a needed increase in rates.  Remember that the federal government has become much more expensive and has as well become more a partner in building people's lives.  While I know little about the country personally, a model like that of Sweden for an at least temporarialy reformed U.S. tax regime and additonal revenue collection might solve the problems of the revenue side of federal operations, and with the idea in mind that the wars and the recession have been expensive and while the federal government has thereby worked to muddle through with its social programs that have changed lives, even saved lives.  Now is the time to recognize such a thing and to allow the heartiest we have to address these individual issues. 

Thursday, November 8, 2012

2


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What if we had a system that placed all winners and leaders as people who had mostly come in second place?  After all, there are very successful sports teams and players who are moneyed and who are known better for placing more than the occasional infrequent title won by others.  Politics in the U.S., however, only deals with money in part, and success in any administration here is not solely dependent upon wealth; probably a good thing as otherwise we'd have kings and queens instead of national elections.  Most people know that despite the consistency of some second place finishers, our nation, like many free nations in any election chooses its leaders based upon the plebiscite in which (barring the revolutionary ideas and rules controlling votes through the electoral college that occasionally have reversed popular votes in the past) the person receiving the most votes becomes chief of state.  In other words, no one really remembers who finished second in many U.S. national elections, despite the importance of this for the administrative process. 
 
The power of the presidential election as we know it is one candidate can win the office of chief of state without (1) having raised the most campaign money, and (2) appealing and pandering to special interests and power interests within our region.  It is true that the Republicans toward the end of the campaign this year had raised more money, and that Obama as victor of the presidential campaign contest in all appearances was re - elected without having become beholden to industrial interests, Hollywood, financial and commercial interests and the general business community that has sat the sidelines in the post election talks about what we have to expect going forward for the next four years.  The thing that clinched the election for the president was indeed his good showing in the second and third debates, and his campaign rhetoric in the last days before election day; and his being supported by the Clintons who still carry the mantle of an outstanding Democratic presidency during the 1990's from at least the standpoint of macroeconomic growth.  Even the Carter policies of the 1970's have found a home in the Obama presidency in the way of policies of 'priming the pump' to bring back jobs, the level of federal spending, foreign policy and other areas that matter to all of us.
 
Ohio, Michigan Wisconsin, and then Pennsylvania, …  Even Nevada mattered yesterday as I heard a local news show on the U.S. West Coast broadcast a piece on the importance of Nevada and its four cities (where most people in the state reside,) of which Reno and Las Vegas, and the broadcast was considerably and interestingly detailed.  The U.S. Democrats, apparently in this election contest, had their own super - statistician, maybe even a virtual one, parsing, slicing and dicing those numbers with respect to undecided, uncommitted, and other voters in select areas.  This undoubtedly contributed to their campaign efforts and paid electoral dividends in the end. 
 
Remember that Mr. Romney, though everyone might not remember him forever, waged a fierce campaign, and he was classically and characteristically Republican in his showing in all three debates and his approach to people in the campaign arena.  The Democratic party is the party of urbanity, sophistication, pro - choice, …, and people watching our country at this point have to come to terms with the issue about whether the Obama administration will become now more aggressive with respect to its public policy agenda in additionally affirming its identity and greater influence on the world stage.  People like me seriously doubt that the Obamas can now be accused of populism or using the office of the presidency for liberal  or more progressive social agendas as the talk in most areas analysing the current president's policies is quite moderate in nature, and the country's conservatives are more powerful now than they were in the 2008 presidential election, having made the national election a closer contest this year.  The chief executive now also has to answer apparently to a Republican - controlled Congress and to his conservative constituents as well if he is to chalk up additional political wins to his scorecard, and in his victory speeches he has pledged to reach out to everyone to make the political process work better  under his supervision. 
 
That Mr. Romney as a Republican candidate suffered for being identified as powered by moneyed interests who are out - of - touch was an old party line that has been around for at least a few elections and one that some conservative candidates have refuted on their way to national wins.  We as a country are apparently also benefiting from more liberal policies as the recent employment figures indicate and economic predictions for the immediate future are much better, issues around the "China Challenge" appear to be within the realm of being resolved some time soon, we have a vice - president who is influential and moderately conservative despite his party affiliation, and the high - profile government departments have also found reprise and renewal with the gifts that have been earned in the latest national election itself.  Despite that a good number of people do not necessarily like the classic political patterns characterised by the Democrats at this point, and indeed more voters this year expressed a desire for dealing directly with the twin deficits and the size of government, this president and his high officials do have a chance to reify certain opportunities including further resolving difficulties in the Middle East, petrol politics, financial and fiscal reform, further progress in addressing the chaos of foreign policy, defense preparedness, national security, immigration (as pledged), to name a few, and more.  The national papers in the next few days should examine all these and some others that were in the headlines during the campaign and that need to be summarized and talked about.  This president as re - elected has established his own identity and that of his liberal constituents upon the institution of the office of our American chief executive, and the tone of it is optimistic and hopeful to mention the least.  People like me wonder what Tony Blair would have to say about this.