Tags: economy

(no subject)

Watching the ongoing fiscal cliff stuff, now I'm starting to wonder if the impasse is on purpose. I had been thinking it was a game of chicken, with the two sides trying to figure out how long they could wait before compromising to look better than the other guys. But now I'm thinking it's just political posturing, without any compromise planned or expected. If the Republicans and the Democrats somehow come to a negotiated agreement before the end of the year, everyone will be unhappy, either with their own side for "backing down", or with the other side for being jerks. But if they don't come to an agreement, the draconian measures go into effect, and both sides can point at the other as the reason we have to suffer. Neither side has to say to their supporters "Yeah, we did this even though we said we wouldn't."

Financial Cliff letter to the government

Sent to: President Obama, Vice President Biden, Senator Schumer, Senator Gillibrand, Representative Clarke.
Copies to: Senate Majority Leader Reid, Senate Minority Leader McConnell, Speaker of the House Boehner

***

To my elected governmental representatives, whether I voted for you or not:

What's going on? Seriously, how can you think to show your face on television, attend any public event, make a public statement or speech, or do anything other than sitting in a room with the other members of Congress and the administration in order to solve the so-called Financial Cliff crisis?

This summer, into the fall, we all knew it was political posturing that was keeping you from actually doing your job to find a way to fund the government and keep it solvent. But we've passed election day; you were all re-elected, as were your "opponents" in the government. There's no political gain to be had by swooping in at the last minute to say "see how bad the other guys were? But we were good; we fixed it."

It has stopped being amusing, it has stopped being merely annoying. Now you're up to damaging my life and business (and, I imagine, nearly every other one of the 300 million citizens out here who are looking at our government with increasing disdain and scorn). I'm trying to expand my business, open a new division, and I'm seeking financing to do so. Everyone I've spoken with recently has been uncomfortable about investing in anything right now, when they're unsure what is going to be in the next month or two, due to your political nonsense.

You all talked about jobs creation during the past campaign season. Well, guess what? Government doesn't create jobs. Government, if it's operating properly, gets out of the way so that people like me can create jobs. As soon as I get my funding, I'll be hiring seven people to get the new business running, and I expect that, once we're in business and moving, we'll be hiring another twenty or thirty people. Those are the jobs you were talking about this autumn. Those are the jobs that will help the economy improve. And those are the jobs that can not be created until you sit down with your fellow representatives and fix the mess you created.

I get it: each of you wants what is best for the country, and you're making sure I know it's not YOUR fault; it's the other guys'. Honestly, I couldn't care less whose fault it is, nor who swoops in with the last-minute solution. I want it solved, now. And if you can't do it today, ask yourself what's going to change that will enable you to solve it at the end of December? If it's just more political posturing, you really need to think about resigning and getting the hell out of the way.

Best wishes.

Ian Randal Strock
Brooklyn, New York

Links: privacy, economy, and archeology

"Murder Suspect Has Witness: A MetroCard" by Benjamin Weiser: shows the positive side of all the new technologies being used to track and follow everyone, but ever since a Law & Order episode several years ago that used a MetroCard record to convict someone of a crime (an issue which is also touched on briefly in the article), I've taken to disposing of the cards when I've emptied them, rather than reloading. I fear there is too much information flowing around, enabling anyone with the least bit of access to track one's movements, purchases, hobbies, everything. That's why I pay cash, replace MetroCards, and scowl at "security" cameras. Are you doing your part to live your life as far from surveillance as possible?

"The Dead Tell a Tale China Doesn't Care to Listen To" by Edward Wong: about the Uighurs living in Xinjiang, and the 3,000-year-old Tarim mummies in the museum in Urumqi, and what the combination of these two groups of seemingly non-Chinese might mean to the official Chinese government take on the region.

"Let Detroit Go Bankrupt" by Mitt Romney: talks about the current situation of US auto makers, and their pleading for government grants to bail them out. I don't want to do that. If my tax dollars are being invested in these companies (or, worse, given to them), I want stock. But if I had a choice, I wouldn't be buying stock in car companies at all.

Romney makes some good points:

"First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers." Key point: he's not saying "costs must be raised for the foreign auto makers." In order to be competitive, the US auto makers have to lower their own costs.Cut for lengthCollapse )

And this interesting sidebar: "A Sea of Unwanted Imports" by Matt Richtel talks about the growing storage problem at the Port of Long Beach, where they're warehousing imported, but unwanted, cars. Also talks about the pileup of suddenly unwanted exports (specifically, waste material for recycling) at the port.

Spending less than half of the government's budget

In this post, lonfiction talks about his desire for a politician (or an average person, for that matter) to "put your money where your mouth is." In other words, don't just tell the electorate you're for education: show it by increasing the budget for education. It's a good, passionate argument.

Unfortunately, it reminded me of this editorial from the March issue of Kiplinger's which my father pointed out a few weeks ago (and I inconveniently forgot to write about). In it, Knight Kiplinger starts off by saying "If you really want to know what people value most, look at how they spend their money." Basically, the same argument Lon is making. Kiplinger goes on to look at the various chunks of the federal budget*. Kiplinger talks about how little, as a percentage of total tax dollars, each field gets. After enumerating most everything the average person thinks about (including the Department of Defense, which has a whopping 21% of the budget), he notes that he still hasn't accounted for more than half of federal spending. "So where do the majority of your federal tax dollars go? To your fellow citizens, in direct payments and benefits." He explains how those payments and benefits make up 56% of annual federal spending. "[A]bout one-third of all federal spending goes out as Social Security benefits and Medicare payments."

His summation: "the vexing problem of reordering national priorities is that 65% of the current federal budget (56% in transfer payments and 9% in interest on debt) is virtually untouchable." Good and read the entire article: he spells it all out simply and clearly).

Finally, there's this AP article which talks about the nearing difficulties of continuing Social Security and Medicare as they have been. Quoting from it: "While the Social Security trust fund will have resources until 2041, the more critical date in terms of government revenues will occur in 2017. In that year, Social Security, which has been providing billions of dollars in surpluses to the government for over two decades, will start having to pay out more in benefits than it will receive that year in payroll taxes.

"At that point, the government will have to start replacing the money it has borrowed from the Social Security trust fund. It can do that only by increasing borrowing from the public, raising taxes or cutting other government programs. The elimination of the Social Security surplus is a key reason that experts are projecting sizable budget deficits in future years."

Did you catch that? We've been borrowing from Social Security (yes, yes, I know that wasn't a secret, and it's been going on for many years), but that fund will soon be unable to loan the general budget any more money.

All in all, a sobering look at the finances dictating the federal budget. We can complain about insufficient funding for education, too much money being wasted on science, even overspending on needless wars; but all of those pale in comparison to the 56% gorilla sitting over there in the corner. We've got entitlements which were designed during the Great Depression as stopgaps and assistance programs for a populace living shorter lives, but those programs have become so institutionalized that politicians feel they can't even talk about them.

You want fiscal responsibility in our leaders? Make them talk about Social Security. Not "how do we keep funding it," but rather "does it make sense to keep looking for bandages to keep the system limping along."



* Something I've been talking about since I was actively involved with the Artemis Project: to wit, everyone complains about over-spending on space and science, but those expenditures are less than 1% of the federal budget.