Congressional Democrats are poised to vote on raising the national debt ceiling from $12 trillion to $13.8 trillion. The vote could come before the end of the year, an effort to minimize possible political blowback in the 2010 midterm elections. The story elicited a number of comments by lawmakers. In an interview with Politico, House Appropriations Chair David Obey said, “…the credit card has already been used. When you get the bill in the mail you need to pay it.”
Groups of conservative Democrats critical of runaway spending have emerged in both the House and Senate. One such member is North Dakota’s Sen. Kent Conrad, chair of the Senate Budget Committee. Conrad teamed up with New Hampshire Republican Sen. Judd Gregg to introduce legislation to create a budget task force (press release) to plot a more sustainable fiscal course.
The legislation has 31 co-sponsors including Minnesota’s own Sen. Amy Klobuchar. In a press release yesterday, Klobuchar said:
“We have already seen what happens to our economy when Wall Street is fiscally irresponsible. We cannot let our federal government do the same thing,”
“We need to change the way Washington works when it comes to our long-term fiscal outlook. This is not about being a Democrat, a Republican or an Independent. The Bipartisan Fiscal Task Force is about trying to get something done to stop unsustainable spending and restore our financial stability.” (Press Release, “Klobuchar Sponsors New Bipartisan Fiscal Task Force Legislation to Confront Nation’s Budget Crisis”)
The task force would have 18 members, ten Democrats and eight Republicans. The committee would also have bipartisan co-chairs.
Senator Gregg posted a fact sheet on the legislation here. For more information on the Bipartisan Task Force for Responsible Fiscal Action Act of 2009, click here.
The Value Added Tax
I posted on the Value Added Tax (VAT) back on October 9th when House Speaker Nancy Pelosi said in an interview that the controversial tax was on the table.
The Value Added Tax is in the news again this week because of an article in yesterday’s New York Times suggesting a VAT is gaining support on and off Capitol Hill. According to the article, the VAT is gaining support as the only feasible way to raise enough revenue to keep up with runaway federal spending.
Pelosi isn’t the only influential lawmaker eyeing a value added tax. Senate Budget Committee Chair Kent Conrad also believes a value added tax should be on the table. In an interview with the Washington Post in May, Conrad said,
“There is a growing awareness of the need for fundamental tax reform…I think a VAT and a high-end income tax have got to be on the table.” (Washington Post, “Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look,” May 27, 2009)
Whether through spending cuts, a new task force or a national value added tax, it is becoming clear that the cure for paying off the federal credit card isn’t as simple as raising the credit limit.
Budget officials released their projections on Tuesday, predicting a $1.2 billion shortfall over the next biennium. Both parties issued releases on the shortfall (GOPDFL) and state leaders made statements on the deficit, from MPR:
Job creation was the focus with both sides pledging bipartisan efforts to combat the deficit.
Earlier this month, the Center of the American Experiment released a report, entitled “No Longer a National Model: Fifteen Recommendations Fixing Minnesota Election Law and Practice.”The report, authored by American Experiment Senior Fellow Dr. Kent Kaiser with the input of numerous (but unnamed) contributors, criticizes aspects of the election system in Minnesota and proposes solutions for some of the problems seen in recent days, especially in the lengthy and controversial recount process in the 2008 US Senate race.
The fifteen proposals have already been lauded by the Pioneer Press and Politics in Minnesota. Many of the proposals are no-brainers. For example, it’s unacceptable that “Military absentee ballots were 16 times more likely to be rejected and that most of them were rejected because they were received after Election Day.” Logistical problems and a tight schedule from primary to election day in Minnesota are to blame. Another example: (although the debate often carries a partisan edge) the inability to verify voters at the polls with something as simple as a photo ID requirement is a problem. Allowing voters who vote absentee to “verify” their ballots as valid by running them through a test machine seems like a reasonable idea, although the ability to do that doesn’t seem like it would help people mailing in ballots, especially from afar. Yet another example: checking to make sure that people aren’t voting in multiple states. If somebody applies for a drivers’ license in another state, the license in the other state is automatically cancelled. Why not the voter registration? Many of the technical solutions being proposed are sound and simple and one may ask why haven’t they been proposed before? One suggestion is already on the table. Senator Al Franken has just submitted a bill to Congress requiring states to grant at least 45 days for overseas ballots to be issued and returned.
There are other suggestions that may generate more controversy. Not, as you might imagine given the Center’s conservative bent, with liberals who might find changes to be a handicap to access, but rather to conservatives and libertarians who might well ask, how do these suggestions fit with constitutional principles? We are talking about a basic element in our democratic government, one that defines it, gives it is shape and credibility.
Center of the American Experiment President Mitch Pearlstein provides a response to that question in his foreword. “…while the explicit purpose of most of the previous investigations was to apply conservative and free market tests to what the government does, the explicit purpose this time around has been to have nothing whatsoever with anything ideological—be it right, left, sideways –as conducting elections which command the trust of citizens is of an entirely different order.”
Nice try, but it’s a cop out. Political Science 101 teaches us that ideology is embodied in institutions. That’s true if you are a libertarian, a Marxist or a feminist. When we tinker with the mechanics of something as fundamental as an election, we need to pay even greater attention to the messages we send and the behaviors we incentivize and judge them according to whether they conflict with and undermine or help to translate constitutional principles in light of new problems and possibilities.
Returning to the question of the photo ID for voters–yes, it is controversial on the left, as a “barrier to voting.” ( Let’s leave aside for a moment it is nearly impossible to live in the modern world without being able to acquire and present a photo ID of some sort, whether to drive, to purchase certain classes of items or to conduct even the smallest of financial transactions.) Civil libertarians are critical of any sort of government controlled and mandated ID card where data is collected on an individuals’ movements or tagged with other personal identifiers. Dr Kaiser’s characterization of the use of such an ID is not likely to put their fears to rest:
“A quick swipe of a photo ID through a card reader could fill in the data fields in the state’s voter registration system, thereby eliminating common data-entry mistakes that take place with the current pen and paper registration system. A quick swipe of such ID at the sign-in-table in the polling place on Election Day would eliminate the need to line up by parts of the alphabet, would conserve thousands of pounds of paper currently used to print voter rosters in every election, and would greatly speed up the lines in polling places. It would also eliminate the need for post-Election Day data entry of voter participation history, which after the 2008 election took several months and cost county governments tens of thousands of dollars to complete.”
There is obviously a tradeoff in cost, convenience and the integrity of the vote vs. having to present a “swipeable” government ID with a yet to be determined amount of personal data. But we aren’t looking at “ideology” so privacy concerns and civil rights concerns are not considered here.
Another of the more controversial aspects of the report is likely to be how many of the solutions to the current problems boil down to “centralizing” the process at the state level. Historically, cities and counties (local units of government) have controlled elections. This is not merely a practical matter but a reflection of local governance and local control enshrined in the constitution. The suggestions:
No more SOS political appointments—election workers (other than ground level election judges) are all state employees
No more partisan appointments to State Canvassing Board—make appointed administrative law judges members, who are state employees
Centralized administration of foreign ballots
Barcoding and central processing of ballots
Instituting a provisional ballot system for voters without ID on election day, checked centrally
Requiring recounts to be done at a central location
The experience of elections in other countries where democracy is challenged suggests that ballot fraud takes many forms. There is localized fraud, where the town political bosses fail to accurately count ballots. There is regional fraud, where ballot boxes go “missing” (or wires get crossed) on the way to the centralized counting and there is national fraud, where the central electoral council announces a result and manufactures a paper trail later. Centralizing ballot counting is no guarantee of fraud elimination. In fact, it makes fraud on a massive scale, more possible if not more likely. In the case of a state like Minnesota, one need not even imply that the fraud could be intentional. A small mistake at the local level would involve a minimal number of ballots and would be less likely to throw an entire election and elections system in disrepute. A mistake on the state level would be, by definition, systemic and could be catastrophic.
Dr. Kaiser admits that there is a limit to how insulated even a “professional” government employee can be with this vignette from the 2008 Senate recount, in the “drama” of the “missing ballots:”
…the drama involved in getting these “missing” ballots counted, in spite of their apparent non-existence, was viewed as partisan. This suspicion was fueled by the fact that the Director of Elections in Minneapolis at first explained how there might never have been ballots to back up the numbers indicated on the ballot scanner from the precinct in question. Later we were distressed to witness the City of Minneapolis Director of Elections seeming to buckle under partisan influence….
The Deputy Director of Elections in Minneapolis at the time was Cindy Reichert, an employee of the city of Minneapolis. If she could be susceptible (or be perceived to be susceptible) to “partisan” pressure, why would a state employee not feel the heat in a hotly contested state legislative or gubernatorial race, which arguably holds more portent for their conditions of employment than a U.S. senate race would have been for Ms Reichert? State employees are not devoid of associations. They may belong to parties, political groups, churches and unions. There is no state version of the Federal Hatch Act that prevents state employees from participating openly in politics. With partisan appointees to the Secretary of State’s office, at least, we may guess at the affiliation of the appointees and if bias is evident, it may be confirmed and overruled. By demanding that career bureaucrats staff the office, we’ve merely thrown a cloak over any bias by assuming it away.
There is a constitutional solution for many of these problems. It was built into the original design. If the party system is competitive, control over the Secretary of State’s office is bound to alternate. If no party expects to control the office permanently, then competition should keep them honest and cause them not to act in any way that they could pay the price for, down the road, when they are no longer in power. Another constitutional principle, accountability, would prevent any future political appointee or their minions from engaging in any significant abuse that could be exposed. In order to have accountability, there is a great need for transparency in the Secretary of State’s office, for procedures to be visible and understandable to the voter, from the handing of a ballot to and from the voter to the result on election night. Robust competition and the intense scrutiny it fosters is the solution, not placing the entire office into the hands of mandarins.
It’s unfortunate that some opponents of federal government-directed health care jumped on the ‘Death Panel’ metaphor instead of the substance of the proposed legislation. Whether the federal legislation intends it or not, a government-directed plan necessarily requires bureaucrats to make life and death decisions that are more far-reaching and more complex than the hyperbolic ‘pulling the plug on grandma.’
No matter how wealthy we are as a nation, the government will never be able to provide health care for all AND provide all of the health care everyone would want. Trade-offs are inevitable; if universal access is a given, then the amount and quality of delivered medical treatment must necessarily be negotiable.
To understand the complexity and God-like power the feds are proposing to invest in some poor civil servants, let’s allow grandma to peacefully nap and consider the other end of the life spectrum, infant mortality. Imagine yourself charged with managing the cost of care for newborn infants under the government program. Here’s the situation you would face.
The U.S. has an infant mortality rate of approximately 7 deaths per 1,000 live births, compared with 5 deaths in other developed countries; in Norway, infant mortality is a mere 4.1. Race, geography, income and education all factor into those numbers, but irrespective of its genesis, low birth weight is a primary factor in infant mortality.
Low birth weight occurs in about 7 percent to 8 percent of all live births, but 40 percent to 70 percent of all infant deaths can be attributed to low birth weight (depending on how one defines “low”). When compared to normal weight infants (more than 5.5 lbs), infants with “moderate” (less than 5.5 lbs), “very low” (less than 3.3 lbs) and “extremely low” (less than 2.2 lbs) birth weights have 40, 200 and 600 times greater risk than normal weight infants, respectively.
According to the journal “Pediatrics,” 8 percent of 4.6 million infant hospital stays (2001 data) included a preterm/low-birth-weight diagnosis, accounting for 47 percent of the costs for all hospitalizations ($5.8 billion) and 27 percent of all pediatric stays. The average cost of the hospital stay (12.9 days) was $15,100 compared with $600 (1.9 days) for uncomplicated births. For infants less than 2.2 lbs, the average cost of hospitalization was $65,600.
Advances in medical technology have significantly improved the survival chances of infants with extremely low birth weights (without complications), but at a high cost. Complications, however, are common in infants with low birth weights, often requiring intensive, expensive care; still, the mortality rates remain relatively high.
What do you do? Here’s more data.
A study by the Rand Corporation found that 69 percent of infants who die during their initial hospital stay did so within one day of birth. Those infants were the least expensive to treat, an average of $6,310. For infants who died during the remainder of their initial hospitalization, average treatment was $58,800. Infants at “extremely low” birth weights, in aggregate, create the most costs; technology keeps them alive past the first day, but despite the extra effort and added cost, infants born weighing less than 2.2 lbs have the lowest initial hospitalization survival rate.
More data to consider: The aggregate annual incremental costs among low-birth-weight children ages birth to 15 have been estimated at $5.4 billion per year, not including long-term care, special services and special education often correlated with low-birth-weight children. All that said, remember, those are aggregate statistics; many low-birth-weight children grow into healthy, happy adults with no unusual health problems – you just don’t know who they will be.
So, were you tasked with managing the public newborn-care option, what would you do? Should the public health plan allow spending billions of tax dollars on technology and treatment attempting to save low-birth-weight infants when that practice has a high probability of complications yielding a relatively low survival rate with a high probability of ongoing medical and other expenses associated with survival?
Access, quality and cost — you cannot reduce costs if your promise is equal effort for every low-birth-weight child using whatever technology and treatment is available. In Switzerland, a country often cited for a lower infant mortality rate than the United States, infants weighing less than 2.2 lbs. at birth who die are designated stillborn, whether measures are taken to help them survive or not. Problem solved?
Infant mortality highlights the underlying question of the health care reform debate: How can individuals deal with unpredictable, unaffordable expenses? Neither the regulated, privately managed care approach we have today nor the government-run managed care proposals being debated in Congress provide an acceptable answer. A free market system where patients control the money, health care providers set prices for services, and private insurers are free to develop policies that convert unpredictable and unaffordable events into affordable and predictable premiums, could well be the best way to optimize (not perfect) health care resources.
Unfortunately, in the progressive rush to birth a government-run solution, the free-market solution is designated “stillborn.”
This commentary originally appeared in the St. Paul Pioneer Press, Friday August 28.
Photo Caption: Neonatalogist Jonathan Muraskas places his hand next to Rumaisa Rahman, known to be the smallest baby in the world to survive birth (8.6 ounces). Rumaisa was born at Loyola University Medical Centre in Chicago. Photo: Reuters
Dane Smith’s most recent Legal Ledger column “If taxes are bad for us, how did we get so healthy, wealthy and wise?” provides the most vivid example of strawman abuse since the Wicked Witch of the West plucked the Scarecrow.
Dane is a pretty reasonable guy, so when he resorts to calling those who disagree with him “anti-government” and “anti-tax,” you know he’s on shaky ground. It is not “anti-government” to be concerned when government consistently exceeds its constitutional authority; it is not “anti-tax” to uphold the constitutional principle of the sanctity of private property and think it wrong for the state to tax for programs and projects that exceed its constitutional authority. That said his column is made for fisking, and that just what I’ll do.
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If taxes are bad for us, how did we get so healthy, wealthy and wise?
by Dane Smith, Growth & Justice
Here’s a tax-and-budget Question for the Century, as we brace ourselves in Minnesota this summer for continued cuts to our state and local governments, all in the holy cause of not raising state income taxes ever again under any circumstances whatsoever.
Actually, not raising state income taxes ever again sounds like a pretty good objective when you consider what it means. It means that that economy is healthy, that more people are working, more wealth is being generated, and more tax revenue is being collected. It means that instead of relying on inefficient, unstable revenue generated by narrowly based, high marginal rate taxes, the state would transition to more efficient, broader-based, low rate taxes, which produce a stable revenue source providing sufficient revenue to meet the state’s constitutional objectives. When Dane tries to be sarcastic with the phrase “under any circumstances,” he succeeds only in declaring a tax increase to be the last resort of the incompetent.
Answer this: If government and taxes are so bad for growth and general prosperity, why did we grow so much and get so generally prosperous over the last century, especially in Minnesota, a period during which government and taxes grew exponentially?
Okay, so what is it? In past pieces, Dane has told us that Minnesota taxes have not kept up with the national average and the size state government has remained constant and is actually below its apparently Creator-endowed 17 percent of state income. But that aside, the question Dane is asking might be addressed with an analogy.
Suppose I challenge LaBron James to a little game of one-on-one basketball, and he beats me 21-zip. We play again, and to make things more fair LaBron wears 25-pound ankle weights. He still beats me 21-zip. Now suppose, as Dane suggests, we “exponentially” increase LaBron’s handicap and attach 50-pound weights to his ankles. This time he beats me 21-1. Same outcome: LaBron wins. Relative to kicking my butt, it is accurate to conclude that even 50-pound ankle weights did not affect LaBron’s performance, but it is not logical. Of course the 50-pound weights affected LaBron’s performance, but he is so much better than I am, he still beats me handily. So it is with capitalism.
The economic engine of capitalism, the adaptability and innovation of free people in a capitalistic system can carry a lot of deadweight government activity. That is accurate, but it also follows logically that without carrying excessive government on its back, a capitalistic society could produce a whole lot more wealth for a lot more people. It also logically follows (and Dane acknowledges later in his column) that at some point even a superstar can be handicapped beyond ability to produce. Chain LaBron James to a truck, I just might beat him; chain capitalism to a government that finds virtue in “expanding exponentially,” and capitalism is defeated.
Since 1909, and with big spurts in the 1930s and 1970s, the federal-state-local government’s share (anti-tax types like to call it “take”) of income in Minnesota and the United States grew steadily and sharply, from about 5 percent to 35 percent.
A seven-fold increase in taxes should have left us a howling wasteland, if one subscribes to the anti-government theory of anti-tax zealots. We should have less wealth, no creativity, diminished entrpreneurialsm, little technological innovation, and no incentives to do anything but seek or wait for the next government check.
The exact opposite happened as government grew.
Our mostly well governed nation, and high-tax Minnesota in particular, and other democratic and capitalistic nations with expanding public sectors, got very rich during this period. And more important, our quality-of-life improved dramatically, beginning with life expectancy but extending into a multitude of aspects ranging from education to mobility to more fairness and equality for the two thirds of society (women and non-white males) who were second-class citizens in 1909.
Dane needs a little lesson in the difference between correlation and causation. Over that same period of time, Al Gore tells us the earth was getting warmer, carbon emissions were increasing, and dramatic changes were occurring in the Earth’s ecosystem. Using Dane’s logic, I can only conclude that global warming is good for the economy.
I would point out to Dane that it was government that denied certain civil rights to women and non-white males, so it is kind of cheap to give points to government for the wisdom to correct its own mistakes – mistakes that those of us advocating for limited government understand result from government overreaching in the first place.
It is always interesting to me that when progressives want to justify government they point to areas where government has a defined constitutional role (education being a state but not a federal obligation). They also use as a measure of success “participation” rather than “effectiveness” – education being the prime example. Today, public schools proudly proclaim they “take everyone,” and quietly disavow that they cannot “educate everyone.” As in my mythical game of one-on-one with LaBron James, the deadweight of government hasn’t yet reached the point where it completely burdens the resilience of a free people, but image if that burden were diminished.
Now to be fair to Dane, as a nation and a state, we do accomplish good things, collectively, through government. But the point Dane never seems to grasp is that we live in a constitutional republic, not a democracy. Democracy is how we make collective decisions about collective actions, but it does not tell us when collective action is appropriate or allowed. We do not vote on when we get to vote. It is our federal and state constitutions that define when we act collectively. We are a republican government of enumerated powers, and the problem is, Dane does not recognize that restraint. In his progressive view, government authority is defined by the consent of the governed, the will of the many, and the rights of the minority are protected only by the grace of the majority. It is no wonder then that he takes the inevitable and makes it look like a plan when he gives government points because the majority controlling government finally decided to provide equality for women and non-white males. Are we to assume then that it was okay when the majority denied equality to women and non-white males?
Again to be fair, Dane has some handicap weight to carry when we debate. To denigrate my ideology, he must come up with terms like “anti-government” and “anti-tax.” To denigrate his ideology, I merely have to use his self-description – “progressive.”
This question and sound answers to it are posed strongly and clearly in a gem of a little book penned right here in Minnesota “Cracks in the Foundation: Refuting the Conservative Case for Low Taxes and Small Government.’’
Its author is Elaine J. Handelman, a lifetime Minnesotan and a recent addition to the Growth & Justice Board of Advisers. She’s neither a left-wing academic nor an advocate for taxpayer-funded causes. She’s a business professional with expertise in quality improvement initiatives for the private sector, who has a real grasp of economics and history.
“If freedom varies with the portion of our income we keep,’’ Handelman observes in the book, “then we were freer in 1900.
“Yet most of us, I suspect, would prefer the freedom we had in 2000…The capacity to exercise choice is an important part of our freedom and there is no question that the number and quality of choices increased over the century… (And) that growth would not have been possible without significant investments in the public sector.’’
If I might borrow from Robert Browning, I would suggest that Ms. Handelman’s reach has exceeded her “real grasp of economics and history,” but then what’s a government-run utopia for?
In the first sense, Handelman is talking about “freedom” as manifest in the principles the U.S. Constitution – the primacy of individual sovereignty, the sanctity of private property, and preservation of the rule of law, the protection of which is why our government was formed and our Constitution written. In the second paragraph she is talking about “freedom” as opportunity, the result of the wealth created by a free people, each person acting in his own self-interest absent coercion of any kind.
In the first respect, yes to a large degree we were freer in 1900 than we are today. In the 1900’s we were even free to campaign against government’s denial of women’s suffrage and government-imposed Jim Crow laws; today, even the president of the United States by implication compares those who campaign against the government-sanctioned view of climate change with “holocaust deniers,” and we have a Patriot Act that is used against people who support a presidential candidate who advocates a return to constitutional principles.
Even were one to acknowledge Ms. Handelman’s conclusion, “that growth would not have been possible without significant investments in the public sector,” where does she suppose those investments came from? They were the result of private sector wealth production. Why were those public sector investments required? To support private sector growth, not to subjugate the primacy of individual sovereignty, the sanctity of private property and the rule of law. Without that freedom and the wealth it produces, we will not have the freedom of opportunity in 2100 that we had in 2000. Frankly, we don’t have it in 2009.
Handelman, with careful footnotes and sourcing, nails down the facts of public sector growth and all the ways that taxes have provided humanity-enriching investments — from building national parks to ensuring financial security for old age to probably the most cost-effective spending of all, our state and national appropriations in behalf of educational equality and attainment.
Recognizing and celebrating the basic virtues of business and profits and private enterprise, Handelman scores strong points on several other important spin-off issues raised in the eternal debate between public and private.
“The oft-heard “points of light’’ claim — that private charities and non-profits can fill the void if our governments abdicate that responsibility — is just not realistic as a total solution. Private spending for the economically disadvantaged currently amounts to only 10 percent of what government spends. If government pulls out of the safety-net business, does anyone really expect Americans to increase their giving tenfold? Or even half?
“The notion that the private-sector always does it better than the public sector is dispelled, with anecdotes and statistics. Handelman cites numerous success stories in government, including the consensus that programs like Medicare and Social Security are remarkably efficient and low in overhead costs.
Here’s where Dane plucks the Scarecrow. Yes, some people make these arguments as absolutes, but there are far more fundamental issues – respect for the Constitution for one – that are at stake. For example, the issue is not whether or not a “safety net” is in place, the question is because we have some individuals who are economically disadvantage must we reinvent government outside its constitutional authority and create massive government programs that impinge upon the entire population to its determent and still don’t help the disadvantaged?
Universal health care is a prime example. Much like Dane’s effort to make government correcting its disenfranchisement of women and non-white males into a virtue, universal health care is government’s effort to correct its misguided creation of a bureaucratic, highly regulated managed care system (not by any-stretch a free-market health care system) that caused the economic distortions progressives call a “crisis.”
Because some people can’t participate in our state-imposed, highly regulated, managed health care system is not a good reason to give government even more authority over health care. Instead, why not consider freeing the health care system of the ankle-weights of government interference. More toward a free market in health care where patients control their health care dollars, doctors compete for patients not insurance dollars, and insurance companies compete for customers by writing diverse policies targeted to individual need. And the disadvantaged? Why not provide them with health care vouchers and let them participate in a free health care market with the same freedom and dignity as others instead of pushing poor people into government programs that provide neither quality care nor the self-esteem and motivation to become self-sufficient?
“And yes, taxes obviously have their limits and cannot be raised without consequences for growth. And governments need to redouble their efforts at accountability and cost-efficiency. “Everyone agrees that taxes can not be increased endlessly (and) the manner in which the tax burden is distributed on businesses and individuals has economic consequences.’’
Handelman concludes: “We all agree that government should defend us against enemies foreign and domestic, provide a safe environment and enforce the law. I argue for the value of government in additional roles: Our public investments provide us with increased individual choice, expanded business opportunities, increased scientific and technological ideas for our entrepreneurs to exploit, improved health and an improved quality of life.’’
Okay. Dane quotes Ms. Handelman and confirms the old wives tale that if we engage in the self-abuse of excessive taxation too long, we will eventually go blind. But citing the second paragraph, Dane also wants to keep doing it until we need glasses.
As noted above, it is a fundamental progressive belief that government is restrained only by the consent of the governed and the will of the majority. Dane advocates raising taxes and expanding government until the majority determines that there are “consequences for growth” but without guidance on what constitutes a “consequence.” Cap and trade certainly has “consequences” for growth, not to mention it impinges on individual sovereignty, the sanctity of private property and makes a mockery of the rule of law. But apparently, the national self-abuse of cap and trade is still on the path to eyewear and won’t yet cause climatic blindness, only economic disaster.
Dane and Ms. Handelman can argue for “the value of government in additional roles,” but in the context of our constitutional republic, they nor anyone else has the legitimate authority to expand government into a role not granted to it by the Constitution, irrespective of the benefits.
I couldn’t have put it better.
Here, I agree with Dane – he could not have put the progressive case better. The weight of progressivism’s immorality, economic illogic, and contrariness to constitutional principle would be too much handicap for even the intellectual equivalent of the athleticism of LaBron James. One-on-one is simply not the progressives’ game.
As the economic results of the first stimulus continue to reinforce the fact that such measures are futile in trying to curb job loss, calls for a second stimulus have increased in volume. Obama administration advisor, Laura D’Andrea Tyson, joined the chorus this week in Singapore saying, “We should be planning on a contingency basis for a second round of stimulus.” The appeal for a second stimulus comes from an administration that has to date, only feigned fiscal responsibility. In fact, the federal government’s current deficit, 12% of GDP, is the highest since World War II. As a result of such deficits, the American taxpayer must continue to pay an increasing amount of interest, a whopping $565 billion this year alone, according to the New York Times.
Not everyone on Capitol Hill is ignoring the numbers. Congressman Erik Paulsen, from Minnesota’s 3rd Congressional district, spoke Tuesday about the explosion in the federal debt.
Paulsen is not alone in his criticism of federal spending. Economists Alan Auerbach from the University of California, Berkleley and William Gale, from the Brookings Institution, echo the Congressman’s worry. In their paper, “The Economic Crisis and the Fiscal Crisis: 2009 and Beyond” the two economists outline what they believe to be a bleaker, more realistic fiscal future. They believe the CBO’s federal deficit estimate relies on unrealistic assumptions. The CBO puts the cumulative deficit at $3.8 trillion, Auerbach and Gale project a cumulative deficit of $10.2 trillion.
Neither of the forecasts incorporate the impact of a second stimulus, which could send the deficit soaring even higher. As unemployment continues to rise, so will public pressure on Congress to act. Let’s hope they craft legislation based not on political posturing, but fiscal prudence.
American Leader: An individual who gives of their time to serve as leader and representative of their constituents; a person who serves to protect freedoms that will steadfastly be challenged by countless sources, foreign and domestic; an individual with the strength to hold this position, the integrity to maintain it, and the moral insight to understand it—all motivated to protect this land for their love of humanity.
Over the last century, we have witnessed an exodus of the American Leader. The American Leader has left and the void has attracted those who want the power to dictate to us where to spend our money, what behaviors are allowable, and how to conduct our private business.
What true American Leader wants to force citizens to give their money to another country’s citizens, military, or government? What true American Leader wants to enforce racism via legislation whether it is affirmative action or the first drug laws? What true American Leader wants to take from the citizens to subsidize a specific industry or a specific company? The true American Leader understands the immorality of enacting policies that take from some citizens to give to others, that slow down racial equality, and that hinder productive investment.
As America grew more prosperous, the pressure from within to enact such policies, to give, to take and manipulate this power became too much, and the American Leader broke…Leaders left the realm of public service.
As the role of politics in America continued to drift (resulting from perpetual exiting of qualified leadership) it attracted those whose motives were not in line with what is necessary to maintain the integrity of our system of government and preserve our individual freedom. It attracted those who were interested in control over others.
Today, we have a political system that attracts and elects people who know very little about the basic tenants of the American Republic. Their complete lack of consideration of the natural processes that freedom allows means they become inhibitors of freedom and so create delay in attaining the goals they attempt. Today, the representation in government and politics from the city council to the White House is a sharp contrast to the true American Leader.
The American Leader has become more distant than ever. The ill-fit leaders of the past 100 years have laid the groundwork for a system incompatible with the true American Leader. It seems only the ill-fit can play.
Involvement with politics is a discouraging and challenging prospect for the American Leader: How would/could an American Leader work with today’s politicians? Could they even be elected today?
Despite this, the American Leader must return.
Until true leaders step up, the ill-fit, present-day politicians will continue to manipulate power because they know no other way.
Until American Leaders return and volunteer, their own freedoms are in danger, theirs and their children’s way of life is compromised. If they do not do the job, false leaders will seize the opportunity. This country offers its citizens unlimited potential; but with great reward comes great responsibility. This country requires the special individuals who understand the combination to our country’s success. One must know it to protect it.
Only an American Leader can do the honor of serving because only they can do it in the one way it can be done—not with short-gained power and wealth in mind, but out of genuine love for themselves and their fellow citizen. It is necessary to have such conviction, integrity, morality and strength, that they may keep the inappropriate from entering, damaging the defense, and to refuse the constant requests from countless well-meaning and no-so-well-meaning people seeking others’ money for “the good of the country.”
Theirs is a leadership not of power but of the inner-strength to refuse power. Like taking a turn to stand guard at night, this country has always been charged with having these American Leaders, the ones who can grasp the morality and logic of the Constitution, to watch and protect this way of life.
The American Leader was mistaken for ever giving up the duty and for their subsequent refusal to fight. The longer they are away the harder it is to reclaim the country, giving it back to the people, and the more damage the ill-fit leaders will have caused.
Step up, American Leaders, whether wanted by the public or not. Plant the seed and prime the pump.
People are beginning to listen.
Brandon Ferdig is a local writer/blogger for www.MinneapolisExpression.com. He hosts a local cable access program by the same name, in which he interviews local figures. Contact him at Brandon@MinneapolisExpression.com.
Yesterday the USA Today reported the National Debt at $546,668 per household, including a 12% increase in 2008 alone. According to White House documents, the budget won’t run in the black until the year 2012 (PDF pg. 26). However, that increase in revenue is predicated on a 21% increase in GDP between 2009 and 2012 (PDF pg. 29), a particularly rosy scenario given the current circumstances.
“Bottom line: The government took on $6.8 trillion in new obligations in 2008, pushing the total owed to a record $63.8 trillion.”
Both legislative leaders and opinion leaders have criticized Gov. Tim Pawlenty for “not compromising” with the legislature-for refusing to increase marginal tax rates. But as citizens are making do with less, it’s time for state and local governments to do the same.
Let’s review a few of the ways in which the recession is already affecting people in the private sector-that is, people who pay for government.
We’re getting pink slipped. Nationally, unemployment is at a 25-year high, and the possibility statistic may increase is haunting everyone who is not a government employee.
We’re taking furloughs. Companies that prefer not to lose workers, especially highly skilled ones, are using furloughs. A survey earlier this year by the firm Watson Wyatt Worldwide Inc. found that 17 percent of companies had used furloughs. Some companies are using both furloughs and other temporary pay cuts, together with layoffs, to survive the recession.
We’re watching our dollars and buying less. We’re shopping less at Best Buy and more at Wal-Mart, replacing vacations with “staycations,” and repairing consumer products rather than replacing them.
On the other hand, the recession isn’t so bad if you work for government. That’s because it has been a tale of two workforces, one subject to the vagaries of the market and the other not. Steve Malanga, a senior fellow at the Manhattan Institute, drew this contrast in a recent op-ed in the Wall Street Journal:
“Some five million private-sector workers have lost their jobs in the last year alone, and their unemployment rate is above nine percent according to the BLS [Bureau of Labor Statistics]. By contrast, public-sector employment has grown in virtually every month of the recession, and the jobless rate for government workers is a mere 2.8 percent.”
Here in Minnesota, major private companies such as Best Buy and Thomson Reuters are laying off people, offering buyouts, and generally shrinking their workforce. Medtronic announced Tuesday it was parting ways with 1,500 to 1,800 companywide, about 600 in the Twin Cities. By contrast, the American Federation of State, County and Municipal Employees and the Minnesota Association of Professional Employees, two large unions for state workers, recently accepted a two-year contract. True, it calls for no increase in the pay scale. On the other hand, the unions have resisted any talk of furloughs.
The union leaders are doing their jobs – protecting the financial interests of their members. But when your income is down, you re-evaluate your spending priorities. It’s time for legislators, acting as the agents of the citizens, to apply the same discipline that we apply in our personal lives.
Since at least 1960-the earliest year for which I could find records-spending in Minnesota has gone up each biennium. This is true of both the general fund and of all funds as a group.
In the average biennium since 1960-61 in this state, all-funds spending went up 19 percent, and general-fund spending increased 20 percent. Over this same time, by contrast, personal income has gone up an average 13 percent per biennium. In other words, Minnesota residents are devoting a greater portion of their well-earned income to government.
All-funds spending went up 28 percent each biennium, until the Reagan area. Since the 1980-81 biennium, the average increase has been “only” 12 percent for both general and all-funds spending. Even more encouraging, personal income has actually grown faster than spending on government: Since 1980-81, personal income has grown 13 percent every two years, just slightly outpacing spending on government.
Still, the historic trend is clear. For every dollar Minnesotans earned in 1960, they earned $29 in 2007. But they have had an unsustainable appetite for government: For every one dollar Minnesota spent on state government in 1960, it spent $49 in 2007.
Minnesota has a long history of creating taxes, including an income tax in 1933 and a sales tax in 1967. It has continued to tighten the screws on taxpayers by extending measures such as ones requiring withholding (1961) and taxing out-of-state professional athletes (1989). Along the way, the states has enacted surtaxes (1949, 1981), increased them (1982) and extended them again (1983). It even put a surtax on the bonus our country gave to people who were drafted by the military (1957). And of course rate increases are nothing new, either: The first increase in the income tax came a mere four years after the tax itself was established.
Raising tax rates would certainly be consistent with Minnesota history. But it would deny citizens the opportunity to let the growth of government match (or better yet, lag) the growth of the private sector rather than exceed it.
Government should borrow a page from the private sector, in which hard times focus leaders’ minds on reevaluating business methods and jettisoning non-core functions and activities.
Should opponents of tax increases “compromise”? Only if they wish to waste the opportunity presented by the recession to bring the relationship of the political sector and the private economy back into balance.
Many of us have had to make do with less-and do less. It’s time for Minnesota and other governments to do the same.
(A slightly different version was printed in the May 21 Saint Paul Legal Ledger Capitol Report.)
Hennepin County Commissioner Jeff Johnson was elected last year and began his term in January. He’s already figured out that County Government has one of the most sweeping powers to levy taxes and yet has the least transparency and accountability of any level of government in how it spends taxpayer money because much of its activity goes unreported in the media. In a bid to rectify that in his own county, Johnson has decided to blog about his experiences and what he finds at Hennepin County Taxpayer Watchdog. Watch this space.
Congressional Democrats are poised to vote on raising the national debt ceiling from $12 trillion to $13.8 trillion. The vote could come before the end of the year, an effort to minimize possible political blowback in the 2010 midterm elections. The story elicited a number of comments by lawmakers. In an interview with Politico, House Appropriations Chair David Obey said, “…the credit card has already been used. When you get the bill in the mail you need to pay it.”
Dane Smith’s most recent Legal Ledger 
We begin with a definition.
Health care: Life and death and substance
August 28th, 2009 by Craig WestoverIt’s unfortunate that some opponents of federal government-directed health care jumped on the ‘Death Panel’ metaphor instead of the substance of the proposed legislation. Whether the federal legislation intends it or not, a government-directed plan necessarily requires bureaucrats to make life and death decisions that are more far-reaching and more complex than the hyperbolic ‘pulling the plug on grandma.’
No matter how wealthy we are as a nation, the government will never be able to provide health care for all AND provide all of the health care everyone would want. Trade-offs are inevitable; if universal access is a given, then the amount and quality of delivered medical treatment must necessarily be negotiable.
To understand the complexity and God-like power the feds are proposing to invest in some poor civil servants, let’s allow grandma to peacefully nap and consider the other end of the life spectrum, infant mortality. Imagine yourself charged with managing the cost of care for newborn infants under the government program. Here’s the situation you would face.
The U.S. has an infant mortality rate of approximately 7 deaths per 1,000 live births, compared with 5 deaths in other developed countries; in Norway, infant mortality is a mere 4.1. Race, geography, income and education all factor into those numbers, but irrespective of its genesis, low birth weight is a primary factor in infant mortality.
Low birth weight occurs in about 7 percent to 8 percent of all live births, but 40 percent to 70 percent of all infant deaths can be attributed to low birth weight (depending on how one defines “low”). When compared to normal weight infants (more than 5.5 lbs), infants with “moderate” (less than 5.5 lbs), “very low” (less than 3.3 lbs) and “extremely low” (less than 2.2 lbs) birth weights have 40, 200 and 600 times greater risk than normal weight infants, respectively.
According to the journal “Pediatrics,” 8 percent of 4.6 million infant hospital stays (2001 data) included a preterm/low-birth-weight diagnosis, accounting for 47 percent of the costs for all hospitalizations ($5.8 billion) and 27 percent of all pediatric stays. The average cost of the hospital stay (12.9 days) was $15,100 compared with $600 (1.9 days) for uncomplicated births. For infants less than 2.2 lbs, the average cost of hospitalization was $65,600.
Advances in medical technology have significantly improved the survival chances of infants with extremely low birth weights (without complications), but at a high cost. Complications, however, are common in infants with low birth weights, often requiring intensive, expensive care; still, the mortality rates remain relatively high.
What do you do? Here’s more data.
A study by the Rand Corporation found that 69 percent of infants who die during their initial hospital stay did so within one day of birth. Those infants were the least expensive to treat, an average of $6,310. For infants who died during the remainder of their initial hospitalization, average treatment was $58,800. Infants at “extremely low” birth weights, in aggregate, create the most costs; technology keeps them alive past the first day, but despite the extra effort and added cost, infants born weighing less than 2.2 lbs have the lowest initial hospitalization survival rate.
More data to consider: The aggregate annual incremental costs among low-birth-weight children ages birth to 15 have been estimated at $5.4 billion per year, not including long-term care, special services and special education often correlated with low-birth-weight children. All that said, remember, those are aggregate statistics; many low-birth-weight children grow into healthy, happy adults with no unusual health problems – you just don’t know who they will be.
So, were you tasked with managing the public newborn-care option, what would you do? Should the public health plan allow spending billions of tax dollars on technology and treatment attempting to save low-birth-weight infants when that practice has a high probability of complications yielding a relatively low survival rate with a high probability of ongoing medical and other expenses associated with survival?
Access, quality and cost — you cannot reduce costs if your promise is equal effort for every low-birth-weight child using whatever technology and treatment is available. In Switzerland, a country often cited for a lower infant mortality rate than the United States, infants weighing less than 2.2 lbs. at birth who die are designated stillborn, whether measures are taken to help them survive or not. Problem solved?
Infant mortality highlights the underlying question of the health care reform debate: How can individuals deal with unpredictable, unaffordable expenses? Neither the regulated, privately managed care approach we have today nor the government-run managed care proposals being debated in Congress provide an acceptable answer. A free market system where patients control the money, health care providers set prices for services, and private insurers are free to develop policies that convert unpredictable and unaffordable events into affordable and predictable premiums, could well be the best way to optimize (not perfect) health care resources.
Unfortunately, in the progressive rush to birth a government-run solution, the free-market solution is designated “stillborn.”
This commentary originally appeared in the St. Paul Pioneer Press, Friday August 28.
Photo Caption: Neonatalogist Jonathan Muraskas places his hand next to Rumaisa Rahman, known to be the smallest baby in the world to survive birth (8.6 ounces). Rumaisa was born at Loyola University Medical Centre in Chicago. Photo: Reuters
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