Debt and Budget Compromise

The recent government shutdown was of course driven by a political attempt to keep poor people from having healthcare. But the architects of the shutdown had another agenda that they insisted was related: uncontrolled government spending. They claim we need to balance the budget and limit federal debt or our children will suffer.

As economist Mark Weisbrod points out when it comes to national debt, more important than the dollar amount is what percentage of our GDP is reflected in our interest payments on that debt. Currently that it's about 1% which is as low as it has been in 60 years. (http://www.theguardian.com/commentisfree/2013/oct/18/shutdown-takewaway-fair-society)

I have heard other economists make similar points about the irrelevance of the debt. And of course strategic government spending can pay for itself with economic growth. Perennial growth is an issue which I don't care to address in detail at the moment. Suffice it to say there are natural limits to growth, and we will have to come to terms with this eventually.

Weisbrod understands the economic implications of budget and debt far better than I ever well, but if the tea party and by extension the Republican party are so set on balancing the budget perhaps as a compromise that could be worked out. The Republicans have proposed a constitutional amendment, the so-called balanced budget amendment. I'd like to borrow their initial idea and modify it. How about the balanced equitable and just budget amendment.

Below are what could be the first 4 sections of that amendment. The first two borrow from the language of the Republicans proposal. I've added to section 1 the notion that spending could exceed receipts if a government surplus existed. Presumably if outlays never exceeded receipts a surplus would inevitably develop. Section 2 I have modified to reflect the fact that the economy as a whole grows. The next two sections are my additions. I think they speak for themselves. People might squabble about what an appropriate ratio between the top and the bottom should be. The main point is that it is currently out of control.

`Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless a surplus exists from previous years and then not exceeding that surplus or unless three-fifths of the whole number of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.

`Section 2. The debt of the United States held by the public as a percentage of the Gross Domestic Product shall not be increased unless three-fifths of the whole number of each House shall provide by law for such an increase by a rollcall vote

`Section 3. Any fiscal year where budget estimates for outlay exceed estimates for receipts shall result in automatic cuts to current military expenditures unless three-fifths of the whole number of each House of Congress shall provide by law for a reduction in other budgeted or approved  spending by a rollcall vote.

`Section 4. Income tax shall be structured so that the mean post-tax income of the 1% of the taxable population with the greatest income will average no more than 5 times the mean post-tax income of the 20% of the taxable population with the least income

I don't know if limits on the budget and the debt make economic sense but they say politics is about compromise so the left might want to put forward something like this.

understandign race

Our towns college, the University of Michigan, recently dedicated a semester to "Understanding Race" part of the semester program was an exhibit at the university's Natural History Museum  about "Understanding Race." This exhibit and the theme semester it is a part of are both commendable.  We need more conversations about race,  I recently saw the exhibit as part of a group I am involved with.  I was not able to make the follow up discussion so I put some of my thoughts in writing and  to make those thoughts public I am sharing  them here. If you haven't seen the exhibit these comments may be less relevant.

I would like to share my honest impression of the exhibit.

It was a nice exhibit covering a variety of relevant issues.  However I felt that it had some limitations. I wont claim that I read and watched everything in the exhibit, but I was there for an hour and a half and the subject is engaging to me so I was trying to take in as much as I could.

For me little of the information presented was novel or new, I know race is a biologically inaccurate construct.  I am familiar with the disgraceful history of discrimination and the bulk of the historical specifics were familiar. I appreciate that race identity issues get complex.

Beyond the lack of  new information or perspectives I felt that the exhibit really fell short on the politics of racism.  I did not see any portrale of the very real and ongoing racist attitudes that can span from out right race hatred to the almost universal race bias (for an experience of you own level of bias check out https://implicit.harvard.edu/implicit/demo/). Neither did I see much on institutional racism. I did not see the wall of statistics that should have been there about the discrimination of the criminal justice system.

Racism as I understand it is not just discrimination , but discrimination plus power. unless we can talk about racism we can't understand race, and racism is about power. There was a display about the 2008 elections, but no mention of how elements of the Tea Party were a backlash to a "bi-racial" president.

Education is good but it is best when it can inform action. Two displays that I felt were important to [our group] . . . . were: 1) the stacks of money representing assets of different racial groups. I want to point out it was assets, not income.  .  .  . and 2) the local exhibit pointed out that our neighbor Ypsilanti is a food desert.  I don't know what we can do about this but I think it is relevant to [us].

Morning-after pill rules are good for big pharma and rich kids.

Under court order the FDA is allowing and over the counter version of the morning-after pill. According to the public health science of the FDA it is clear that making emergency contraception available over-the-counter will help to prevent unwanted pregnancies, and the health risks associated with the morning-after pill are dwarfed in comparison to the health risks associated with unwanted pregnancies.

Unfortunately the Obama administration and Kathleen Sebelius rejected the FDA science and tried to prevent the morning-after pill from becoming over-the-counter. The courts disagreed and mandated the FDA to allow an over-the-counter version. The policymakers had one more trick up their sleeves. Instead of releasing all varieties of emergency contraception to over-the-counter sales, the FDA is only allowing the brand Plan B One Step to be over-the-counter. There is a generic version of the same medication available for half the price, but the generic is required to be kept behind the counter and customers must prove their age to purchase it.

Teva pharmaceuticals the Israeli based company that owns Plan B One Step is able to maintain its monopoly pricing as the only over-the-counter emergency contraception option. What this means is that the over-the-counter morning-after pill continues to be inaccessible to girls who can't afford it. If unwanted teen pregnancies contribute to the cycle of poverty then this FDA granted monopoly only contributes to an increasingly rigid class structure. Rich kids won't be turned away by Plan B One Step's $60 cost. 

Since a generic version exists, why couldn't that be allowed for over-the-counter sales? Apparently there is an idea that the increased price will prevent very young girls from inappropriately using the morning-after pill. While it's true that the younger you are the less money you are likely to have access to it's also true that the poorer you are the less money you are likely to have access to. What's particularly interesting is that this monopoly privilege is only given for three years. Now you really have to ask why?

The Trans Pacific Partnership a blow to democracy.

It's time to get the word out on the Trans Pacific Partnership (TPP), a free trade agreement that is being negotiated by representative of 12 Pacific Rim countries including the United States.  But describing  it this way doesn't quite do justice to the anti-democratic nature of this type of trade agreement. The so-called representatives are not elected they are appointed, their meetings are secret and in addition to the government official involved representatives from more than 600 corporations are there to help write the rules of the new economy . Without public conversation about the potential trade agreement and its negotiations they become even more secretive.

Like a variety of trade agreements before it, again for  this one the negotiators are pushing for Congress to grant fast track authority to the Trans Pacific Partnership (TPP). This would mean that once an agreement was reached it would be brought to Congress for an up or down vote, no negotiations. When 11 other countries all agree to enter into a trade agreement the peer pressure on Congress gets intense. 

Trade watchdogs see the Trans Pacific Partnership (TPP) an attempt to take up where the World Trade Organization (WTO) failed. Just a reminder about why and how the World Trade Organization talks came to a stand still: In 1999 the WTO met in Seattle, and it encountered streets filled with demonstrations. Seemingly out of nowhere, but really built from long campaigns of hard work by small grassroots organizations across the country, thousands of labor, environmental and human rights activist took to the streets of Seattle to critique the process and the product that was being proposed. Things got heated up and cops with tear gas and nightsticks made it onto the news this gave smaller and poorer countries the courage to stand up to Bill Clinton and the rest of the corporate globalist. Although future talks tried to avoid American shores, the wind and the will had been taken out of the WTO sails.

After trade talks by the World Trade Organization stalled the United States government decided to pursue smaller trade agreements, a number of bilateral agreements were reached. The Trans Pacific Partnership (TPP) moves beyond bilateral agreements to a broader framework. What only two years ago was nine country now is 12. More countries are interested in joining. As a larger agreement, its impact promises to be more ominous than those of the smaller bilateral free trade accords. We would be right to be suspicious of the economic claims that advocates for such trade agreements make. The North American Free Trade Agreement NAFTA was supposed to create jobs, but evaluations of the economic effects of NAFTA showed that the trend was in the opposite, job loss in the United States and job loss in Mexico.

Beyond the economic concerns, the broader issue is that the Trans Pacific Partnership (TPP)poses tremendous threats to our already shakey democracy. Local laws can become subordinate to demands of international corporations through trade agreements such as the Trans Pacific Partnership (TPP). We saw this with NAFTA as Canada and Mexico had the opportunity to challenge any law that they found to be a barrier to free trade. The classic example was a case where California had band a particularly toxic fuel additive that was showing up in the environment, unfortunately the maker of the additive was a Canadian corporation, by the rules of NAFTA the Corporation was able to sue California and overturn this law as a barrier to free trade.

In Michigan progressives are well aware that emergency manager law usurps democratic power and we see the results of this amounting to the undermining of workers’ rights, and a sellout of public assets. So-called free trade agreements, are even more antidemocratic emergency manager law undermines democracy one town at a time, the Trans Pacific Partnership (TPP) promises to do that for 12 or more countries all at once. So far this agreement has mostly maintained secrecy and invisibility. It's time to bring it out of the shadows.  We need to see it, critique it, and prevent it.  The fact that it hasn't gotten more visibility is reflective of a media that is under strict corporate control. But that means it’s up to us to get the word out. It’s up to us to hold on to our democracy, to build it stronger.

snip-its of hope from my annual letter

Every year I write an annual letter. This year I was initially inclined to write a diatribe about global warming and other horrors and injustices. When it comes to addressing these problems we may not have the will, but it isn’t for lack of ways. Through human cooperation we have the greatest access to the ways that the world needs. So the bulk of my wide world words this year are a story of my most personal part in the cooperative project. (see here: http://communitiesa2.blogspot.com/2013/02/hei-wa-house.html )

To conclude my comments on the world, I want to toss out a hand full of facts and ideas that are rays of hope for me, perhaps they will be for you too.   

1) The world is ahead of schedule in meeting the 2015 millennial water goal http://www.bbc.co.uk/news/business-17270014 , 

2) last year saw only 222 cases of polio paralysis and so far this year none have been recorded http://www.polioeradication.org/Dataandmonitoring/Poliothisweek.aspx , 

3)  if you look at the statistics war is getting less common http://gaiaonpolitics.blogspot.com/2012/04/end-of-war-book-review.html. 

Any of these trends could reverse at any point, and there are certainly counter trends that might be sited, nonetheless they carry hope. 

4) Regarding non-violence I think the most valuable work that is being done is training for non-violent action and nonviolent speech,  groups like the Michigan Peace Team http://www.michiganpeaceteam.org/, and the Non- Violent Communication Center http://www.cnvc.org/ are a source of inspiration and hope for me. 

5)  Regarding the environment, I think that our relationship to food is very important. Building soil and the design science of permaculture show what is possible; I recently came across a 5 minute video about reclaiming a salt desert in the Middle East. "Greening the Desert", http://www.youtube.com/watch?feature=player_embedded&v=sohI6vnWZmk#   , shows an incredible project.