20% and no more with a suggestion how to achieve the impossible

29 Mar 2011. I keep arguing -- to no avail -- with my liberal friends about taxes and spending. None have changed their views nor am I innocent, for neither had I to this point. Something is amiss. Being fiscally conservative, for smaller government and less authoritarian oversight I am going to change my mind before them (to show who are really the inflexible ones). So I accept that we should assure care for the needy. We should provide for the national defense. We should assure the highest quality education (here however I can’t resist making the point that since the 1070’s doubling of real dollar expenditures on education has had no effect on student achievement. Here we can halve expenditures without affecting outcomes. Why not?) We should ensure that health care is affordable. We should ensure that the United States has the highest levels of individual freedom in the world. Ditto for private enterprise. No one should go hungry. Everyone should have adequate (not audacious or lavish) shelter . As the fiscally conservative person I am I merely say that local, state and federal governments do this without taking more than 20% of gross domestic product. This is a lot of money and it grows as the economy grows.
How is this to be achieved. It’s really simple. Make those in government who want to do more find a way to do it. That is, make it part of their job expectations to become more efficient, delivering better and more services for lower and lower costs (so more different things can be done). This means those who spend the money not only have an incentive to reduce fraud waste and abuse (the usual boogey men) but also have an incentive to finding better and cheaper ways of doing what they are doing. In other words, government has to be ruthlessly efficient, thoroughly modern, willing to change, open to new ideas, honest. One way to make these incentives real is to tie pay to a percentage of the savings that efficiency, speed, and simplicity that the changes introduce into the system. I think government workers are like all people; they want to be secure, well-off, not harm others. Providing them a means of increasing their pay will work wonders. Further, if the pay raises of individuals are linked to the savings they are personally responsible for creating, then you will really see hustle. In fact, some individuals could become exceedingly rich in government service (save a billion get a $100,000 raise, and provide $999,900,000 to apply to other programs). There is a downside I have to mention. A lot of people who aren’t interested in finding faster and cheaper methods of doing things is going to get pretty envious of someone who is. Further, applying this method to local and state governments is going to create a lot of problems for the public service union leadership. That’s okay. Everyone needs a problem or two to work on. It makes life interesting.

So you think you're poor

28 Mar 2011. I read an article in the Wall Street Journal this morning about the uncertainty involved in measuring happiness in the populations of nations. Two interesting points emerge in the article. First, because of the relative stability of self-expressions of happiness by respondents, regardless of economic conditions, government representatives are exploring alternate definitions of happiness, principally economic indicators like income. Second, alternate measures are deemed desirable because they can be related to government actions. I would urge caution before we go down this path for the following reasons. Almost uniformly income and other economic indicators are measured relatively. For example, poverty is defined as some point below the median income. The problem is relative measures can never recognize when poverty as an absolute concept is eliminated – some percentage of the population will always have the lowest income, hence be poor, and become subject to the do-good/equality of outcome crowd. I say this is wrong and fuzzy thinking. Caring for the welfare of all as I do, and in order to distinguish actual poverty from relative poverty I offer the following guidelines. First, if you can afford a home or apartment with heat, electricity, running hot and cold water, and a bathroom, your housing circumstances make you ineligible to claim poverty. Next, if you can put nourishing food on your table (gourmet and gourmands aside) you have no claim to poverty here. Further, If public primary and secondary education opportunities are within biking or busing distance, your children’s educational opportunities do allow you to claim poverty. Finally, if you can afford cable or satellite television services and an internet connection, your cultural opportunities make you ineligible to claim poverty. Truly meet four criteria and you are eligible to claim poverty. Meet two or three of four and you are on the border line, some form of support may be necessary. Meet only one of the four and means testing is definitely in order. If you are ineligible on all four, you are or should be on your own. Using absolute unchanging criteria place limits on government mandated interventions that relative criteria do not. If you think you have it bad here in the United States, first watch the documentary Waste Land, then tell what prevents you from improving your own situation. As the song goes “Don’t worry. Be happy.”

Doing good, equality and individual freedom

27 Mar 2011. It turns out that 3 February 1913 was a poor day for individual freedom. In the name of doing good and achieving equality, the 16th amendment to the Constitution was ratified. How are we doing? In the ensuing 90-odd years we have created the most efficient and lucrative tax taking system the world has ever seen. The amount of cash available to governments was, is, will be breathtaking. What’s the government’s record on improving quality of life? In my opinion, it’s not good. Have we eliminated poverty or created a permanently entitled underclass? After many trillion dollars of expenditures to eliminate poverty I would say the picture is dimmer now than when individuals were primarily responsible for sheltering, feeding, clothing and caring for themselves. There is a distinction between caring for those who cannot care for themselves and arbitrarily defining the downtrodden via an income level and then bestowing all manner of benefits on them. Has the government affected health care in a positive way? I think not. The imposition of the employer health insurance mandate during the World War II brought the first of many distortions to the market of health care. While no one wants the sick, injured and dying to go without care, yet in the name of this good we have created a most coercive scheme of tax takings and restriction of individual freedom. When government says you must buy insurance, not buying it becomes a crime. Never in our country’s history has not doing something with your own earnings been a crime. Welcome to the land of equality -- everybody forced to accept the same outcome independent of individual effort.

In some ways we are all badgers now

24 March 2011. My thoughts are these. On style I note a deceit of having two people who are for unions discussing the effects of unions. Though the writer claims to have been anti-union, the ensuing discussion is one-sided, disguising persuasion as objectivity. On issues of public sector unions, my thoughts are more complex.
I am for unions and right-to-work laws. I do not condone that a simple majority of workers joining together in a union – whatever the workplace – may compel all workers to be members, pay dues, and adhere to union directives. I put my individual rights (and hence the rights of other individuals) above the rights of groups – however constituted. Unions should compete with other workplace options for my loyalty. I note here that a badger is a solitary animal not a herd animal.
In the private sector, I see declining union membership sector as due to an unintended consequence of laws that regulate workplace safety and rights, child labor, and minimum wages – and not to the efforts of greedy capitalists. Many of the issues that gave rise to unions no longer exist. Further, “capitalists” (those who build companies and hire labor) have learned that labor is a resource/tool set essential to long-term success of their enterprise: A satisfied workforce is absent less, engages in less sabotage and work stoppage, and understands that the quality of the goods and services of a firm are essential to the long-term health of the company and their job. Right-thinking capitalists do what they can to insure they have a stable satisfied work force. Having learned this lesson and taken steps consonant with its implications, over the past few generations capitalists have decreased the need of unions.
Public sector unions are another matter. There are a variety of reasons why I see them differently. Taxes are the source of funds to pay worker salaries and benefits. Since I view taxes as takings from citizens, these should be minimized, their expenditure should be scrutinized with the most stringent and skeptical eye, and be free of corruption. None of these conditions hold at present in any government with which I am familiar. The most cited example of corruption is the circle of support: union dues –> Democrats’ campaign funds –> elected democrats increasing worker pay and benefits. The most egregious aspect of this circle is that a public sector worker with strong conservative values who seeks limited government must watch as union leaders send money to politicians who espouse views totally contrary to his beliefs. The herd tramples the badger here. If honest accounting accompanied proposals to fund increases in pay and benefits and if expenditures were required to be fully funded at all times (two actions that would bring unfunded liabilities under control and force the future tax increases into the present), I would be willing to trust the electorate to discriminate among the persons vying for office. Unfortunately, our elected officials seem incapable of enacting either of these honest actions. Short of making programs actuarially sound from the moment of initiation, a careful and skeptical scrutiny of expenditures might serve the same purpose. Both Republicans and Democrats resist this type of scrutiny. So we are left with a large pool of individuals who derive their income from the tax pool and who return a fraction back into the tax pool: Such individuals are not affected by tax increases as long as they can negotiate en masse for higher wages and benefits. They are in fact, not net taxpayers, but rather net tax receivers. Now, I am willing to say that teachers, firefighters, police and government workers are doing useful and honest work for which they should receive just compensation, yet among these groups there are no competing forces to increase productivity, lessen costs, and reduce featherbedding. In fact, the forces are aligned in the opposite direction. This has to change. Since the 1970’s education expenditures have more than doubled in inflation-adjusted constant dollars – to what effect. A well-run company that received a doubling of capital investment would generally present a much different performance profile. So let there be unions, but let me choose whether I want to belong.
As you know from past writings, I am disgusted by the amount of tax takings in this country. Further, I am disgusted by the notion that the “rich” must pay their fair share, in which the definition of “fair share” is simply more. At times I am tempted to respond in kind, by saying that net tax users (as opposed to payers) should not be eligible to vote on tax increases. To date, I have managed to maintain a relative state of personal calm and usually vote for the most fiscally conservative candidate who is not a Republican or Democrat. Systems usually work until they stop.

Gadafi games

15 March 2011. I am no fan of henchmen like Gadafi and his sons as I prefer representative forms of government providing the strongest protections for minorities to brutal selfish autocracies. Assuming the Libyan rebels seek greater freedom and representation in their own governance, the question is “what is the most effective course of U.S. actions there?” Unlike Afghanistan, where U.S. policy makers justified war by transforming the terrorist threat of al Qaida (operating in Afghanistan) into a national threat (the governing Taliban were responsible), two different segments of the Libyan population (one bad, one not well understood) are in conflict, and the bad segment is rapidly getting the upper hand. Further, although our government’s record is not perfect (Darfur, Saudi Arabia, Tibet, etc.), the general tendency of American foreign policy is to do the right thing (Haiti, tsunami responses). Americans like to see action on problems. Unfortunately, events in Libya appear to be moving too fast for our bloated government to make a military response (military responses take planning and preparation in order to succeed, and I believe the rapid deployment force is occupied elsewhere). So, what is an effective course of action at this point? Here’s my suggestion. By the end of today, we should recognize the sovereignty of the rebel government over all of Libya (those areas currently controlled by Gadafi would be labeled “disputed territory “). Next, by end of day tomorrow we should have a diplomatic mission in Benghazi. Finally, the President should announce publicly that any further military action by Gadafi military against the Benghazi government would be treated as an act of war requiring our swiftest possible military response. It’s the game of chicken that we have played with Gadafi before. He backed down then, and he will back down now because he knows what it means to have his tent rattled. After Iraq and Afghanistan, I don’t think there is a single autocrat in the Middle East that wants to step over a line drawn in the sand by the President of the United States.

Chaos and voting behavior

13 Mar 2011. Today, as I drank my coffee and home-grown orange juice and smoked a cigar, I watched the news on Fox, read the Sunday paper and checked out news and blogs on Real Clear Politics. I do it daily. Today is typical – consensus is that the world is a mess and someone ought to do something. The urge to do something is a part of human nature (Here I sit writing about it). What emerges in my mind as I write this is the notion that urge to do something needs to be tempered with some calm reasoning (Although I disagree with Obama’s political perspective, I find his willingness to reflect on issues a very positive trait). Calm reasoning requires that benefits, costs, and consequences of actions be examined with honesty and without passion. Among the costs and consequences of any political action are its effects on future generations. One reason I believe the deficit/debt issue has become so intense is that a majority of citizens now realize how onerously previous and current choices affect their own children and grandchildren – a once abstract concept has reached the stage where the consequences are real for those in our immediate families. Usually people are not energized by special taxes on other minorities (for example, expressed with humor, luxury taxes hit the evil rich, cigarette taxes punish stupid smokers, and fast food taxes will soon punish those with unhealthy life styles). Now that irresponsibly designed and funded programs like Social Security, Medicare (all parts, but especially part D) and Obama Care are going to make paupers of their own children and grandchildren, more people are willing to examine the dishonest aspects of these programs. That is, debate about these programs is starting to become more honest and dispassionate. That’s good. Being on the cusp of the wave of boomers, I am in the most advantaged position with respect to these programs. So much so that I feel guilt and think about what I would be willing to give up in order to help make a higher quality of life possible for future generations in perpetuity (not just the 75 years currently being thrown about in talking points about Social Security). Actuaries and insurance companies are really good at determining the balance between current inflows of funding against the outflow of future benefits. I have argued in other venues that each new program should be required to be revenue neutral in the sense that it not depend upon future tax raises in order to fund future expenditures. For example, Social Security fails this test because in order to meet future obligations at current benefit levels, taxes must be raised. All other fixes reduce benefits in some fashion either by increasing the number of working years or eliminating some from eligibility (those evil rich again 8-) ). A dispassionate and honest analysis at each point of past modification and extension of the Social Security system would have revealed this. Among our national politicians, here and there we are beginning to hear some dispassionate and honest assessments of the way forward. So here’s what I urge (after all I am a member of the human race and suffer from the same trait of thinking something must be done) : in the next election, disregard party affiliation, consider every candidate running for each office, and listen carefully for honest and dispassionate appraisals of the issues – that’s the person to vote for. That person might be from a Green or Libertarian or Tea party, or an independent candidate. If the candidate just keeps repeating talking points, you can be sure they are taking big money from the Democratic or Republican national organizations, or affiliated organizations. Talking points and taking big money don’t eliminate candidates, but it sure is an indication that they are not thinking about needed changes in a serious way.

Dialog in a civil society

Yesterday, I took a chance by going to the Paradise Grill to have lunch with the old lunch group, then started in on my favorite topics, and provoked responses (I should have expected) by one of them. During the exchange I became angry and had to leave. All day today I have been thinking about that exchange, and my thoughts suggest that I have to control my anger and the accompanying impulsive, emotional responses, but further, I am a little depressed about what the interaction augurs for dialog among more general audiences. If two well-off, college-educated, adult men discussing taxes, business, and the role of government cannot avoid shouting and name calling, how will larger and more heterogeneous groups with much larger stakes in the game behave when discussing them? For me, for now I have settled on a number of small steps that I can personally take. For the most part, I will seek conversations with persons outside the lunch group. I intend to express my more pointed views on taxes and governance in written form –probably this blog – and hope that these views find their way into the broader society and find persons who are open to my perspective. The themes which capture my perspective are these: (1) control by others over one’s own life should be minimal, no more than absolutely necessary and only with one’s consent, (2)judging on an absolute basis, everyone in our country is pretty well off, (3) if there must be taxes, then all must pay something, (4) the rich are not evil simply because they are rich, nor the poor good just because they are poor, (5) it is work that is noble, not the line of work, (6) sharing is a good deed when it is voluntary not when it is compulsory (those who compel are simply thieves who use desirable outcomes to mask immoral means). So, as of today I am going to try and say something here at waterballooner’s on a regular basis.