A Compromise Solution For The Fiscal Cliff

9 11 2012

The United States desperately needs a temporary compromise in order to avoid falling off the fiscal cliff for which I propose a 4-stage plan and strategy to address their immediate fiscal issues. The thrust of this solution is founded on a problem solving approach that would meet the needs of a bipartisan strategy and would also resolve the impasse resulting from divergent political values and doctrines.

The 4-stage plan includes:

STAGE 1: An immediate agreement to temporarily extend the Bush tax cuts in exchange for temporary relief in the debt ceiling until more permanent measures can be obtained. This agreement would be contingent on a strict timeline for development of a comprehensive and detailed plan and strategy for resolving fiscal issues before the U.S. Federal Government. The timeline would not be allowed to exceed the period of the first two fiscal quarters of 2013 and would be managed in such a manner as to minimize additional debt load. The agreement would also be contingent on a consensus view of the basic means and criteria to be addressed in Stages 2 to 4 of the Strategy. These issues include the following:

(a) Exploration of measures to restructure the existing and projected Federal Government debt loads through means such as debt swapping of interest bearing instruments;

(b) A commitment to review and prioritize essential, preferred, and optional budgetary expenditures;

(c) Immediate restrictions on strictly non-essential overtime expenses provided in the exercise of government services;

(d) Immediate restrictions on contract-letting to non-government third party organizations for non-essential services;

(e) An agreement to develop and overhaul the U.S. Tax Code with a view to establishing tax fairness with minimal impact on the business community.

(f) A commitment to priority areas of government spending, including social security, health care, military, judicial, educational, infrastructure, etc., which should include exploration of viable options for improved means of funding as, for example, may be gained by access of the Federal Government to market-place investments.

STAGE 2: A commitment to provide a detailed Level 2 and 3 Plan to develop recommendations for Items (a) through (f) of Stage 1. This Plan would be developed by the bipartisan House and Senate Committees in close consultation with the Treasury Secretary of the Administration. A firm commitment is required to develop the Level 2 Plan and submit it to Congress before the end of the 2nd Quarter, Fiscal Year 2013. The detailed plan must specify and distinguish those actions that may be taken immediately to address pressing fiscal policy issues, and those actions needed to address long- term structural issues in the fiscal planning.

STAGE 3: A commitment to pass legislation by the 3rd Quarter to take the immediate actions identified in Stage 2. The timeline should be coincidental with the expiration of the extended Bush tax cuts, and the extended relief of the debt ceiling provided in Stage 1.

STAGE 4: The passage of a bill to overhaul the U.S. Tax Code to address the long-term structural fiscal issues optimizing for both the prioritized government services and investments, as well as to spur and secure continued health and robustness in the U.S. Business Sector.


Are Low Tax Rates and Government Deregulation Truly the Panacea for Economic Growth?

2 03 2011

A prevailing monetarist theory driving neo-conservative economic thinking is that low tax rates, in combination with deregulated economies, result in optimal economic performance.  By contrast, it should be noted that the longest period of sustained economic growth in the United States, and to a similar extent here at home, arose during the Truman and Eisenhower presidencies.  It was sustained until the Kennedy democrats brought in a tax cut, a fiscal policy feature that later became a fixture of G.O.P. economic theory.  As the neo-conservative doctrine on this matter became prevalent, North American markets were increasingly subjected to the boom-bust economies preceding the Great Depression.

The tax and fiscal structure of the Truman – Eisenhower period have been researched to determine why the fiscal and monetary policy of that period resulted in such large and sustained growth in the U.S. economies.  The study shows that those policies were not just geared towards more equitable sharing of the tax burdens and the distribution of wealth generated by our economies.  The fiscal measures in place made sure that there was a sustained improvement in infrastructure works, and provided a bottom to economic downturns sustained as part of the normal function of the business cycle.

Further evidence to support Truman-Eisenhower style fiscal and monetary practices may be found during the long sustained growth period of the Clinton administration which mirrored closely those of the 1940s and 1950s U.S. administration.  In policy options for U.S. and Canadian economic management, furthering the tax cuts and other fiscal policy approaches of the Bush administration would seem, in light of this evidence, to lock-in further periods of boom-bust cycles risking Depression scale downturns in economic activity as we have seen recently.

Another aspect of the failure of low-tax rate policies is that business growth and development relies heavily on infrastructure works, worker health and well-being, and economic sustenance to those workers who lose employment during downturns arising from the business cycle.  The result is that governments are not able to reduce spending in line with equivalent tax reductions, and could not do so without impacting the health of the private sector.  That means that when politicians argue for a lower tax rate to corporation and their citizen without a feasible means to cut spending, then higher government deficits result which must then be financed by increasing money supply, which in combination with the stimulus from tax decreases, puts upward inflationary pressures on the economy.  In order to respond to the inflationary effects, central bankers must increase interest rates and tighten money supply.  The end result is that, in exchange for tax breaks, higher interest charges result and become an effective “monetary tax” on all sectors of the economy.  This effect would be delayed in an economic downturn as governments try to stoke economic growth, but as economies recover, low tax rates become a significant hindrance to economic growth.

Harper Harps on the Bandwagon at Last!

29 11 2009

Canadians can rest easy now! Woot! Our leader, Mr. Harper, is leading again. Er…that is…he is leading by following, which he excels at and is want to do on most international issues. Climate change, global warming, the end of the world as we know it – whatever your taxonomical preference – has once again niggled its way into Stephen Harper’s agenda by dint of Barack Obama’s attendance at the Copenhagen summit. Phew! I think???

Poor old Stevie must be mightily pissed with the Big “O” south of the border now… Scene: Stevie stomping his shiny shoes in a pique, screeching to get more of those Ignatieff hate ads on the air, scraping his fingers through his starched hair barely able to find a path of any surmountable resistance…

What a nice, comfy niche he had eked out for himself, our fearless un-leader, hiding behind the Ozified, wizard’s curtain of U.S. and Chinese inaction. After all, if the big players don’t play then is there really a ball game? Sheesh, you’d think after having caved to Obama on the Buy American issue, vacillating on what the future role of Canada in Afghanistan will be after 2011 and, with teeth grinding reluctance, contributing proportionate stimulus dollars to the car industry in Canada as the new U.S. administration had done in their country, Obama would have given Harpie some breathing room. But nooo! Mr Barack stick-to-your-word Obama stuck it to the Canadian un-leader by agreeing to attend the climate change conference in Copenhagen. If I played poker I’d probably have a word for a move that brilliant other than “Woot! Obama!”

Harper’s reasoning for not attending in the first place; if the biggest emitters, namely China and the United States, aren’t doing anything then what is the point in the small players taking any action? A reasoning which has stuck in my craw since its early platitudinous naissance. But having had much time to munch on it, run it through the digestive system, I now see an upside to it.

The next time Revenue Canada comes after me for a few dollars in late filing charges I will retort; “What difference can my few dollars make to the overall grinding of the big cogs and humming of the omniscient engine?” I will back up my assertion by relying on Harpie’s logic; there’s no point in me contributing because it really won’t make any difference. How can they dispute me? He is their boss. As the adage goes; a group’s culture always stems from the top. Trickle down crap etc.

When the Red Cross wants my blood or Feed the Children wants my dollar I will use the exact same remonstrance. Surely my piddly little contribution will not make a gnat’s piss worth of difference? I will instruct my children to adopt this new shibboleth. We will all become ego-centric, self-serving, inward-looking moles and the world will implode around us. But we’ll be safe in our silent, dark holes in the ground. Until the very ground disappears beneath us.

O Damcanada Obamacare

13 08 2009

I just saw someone in an anti-Obama healthcare protest carrying a placard that read “If socialist medicine is best why didn’t Ted Kennedy go to Canada?” Clearly the answer – too obvious for someone whose views are skewed by political hysteria – lies in the fact that Ted Kennedy is not one of the millions of Americans who don’t have equal access to healthcare due to lack of financial means. The hordes of people ranting against the bill seem to be saying that they don’t want the less well-off to have the same opportunity to receive the medical care that they have. (Do you suppose that any of the protesters don’t have medical coverage?) And this, a shining example of democracy,  equal opportunity! Ludicrous!

More than that, since I don’t profess to know what is best for another country, let alone my own, I am perturbed by the temptation of so many of the anti Obamacare crusaders to indulge in attacking the Canadian healthcare system. There are a number of reasons this disturbs me deeply. Primarily, their attacks are based on dredging up a few negative articles and opinion pieces which may highlight some of the shortcomings of universal care. (I don’t pretend our system is perfect – what human political-economic system is?) These types of articles, unfortunately, far outnumber the positive ones because the smooth functioning of a decades old system isn’t newsworthy. It doesn’t garner attention simply because we, as Canadians who have had the privilege of having been served by this system, know that it is healthy, beneficial and above-all universal.  There is not one citizen in Canada ever denied quality medical treatment based on ability to pay. If a patient needs a heart transplant, a family doctor, an emergency room visit, they get in line behind everyone else regardless of income.  And these lines are not as long as our American critics would have the rest of the world believe.

My father recently needed knee replacement surgery and his operation was scheduled within a month of the assessment by the specialist. One month!  Two weeks ago my daughter was bitten by a raccoon and needed rabies shots – she began the course of treatment the same day. My sister died two years ago before which she was in palliative care (compassionate, caring palliative care) for 9 months. My son has ADHD and he has had top quality care since he was 5 years old. I had cancer 15 years ago and was treated immediately and I’m still here to tell the tale.  I could never imagine complaining about our healthcare anymore than I could look a gift horse in the mouth.

Our detractors in the U.S. don’t dare peek behind the curtain for fear of seeing the reality, namely, that we have an outstanding, compassionate system that treats everyone equally and removes the fear of not being able to pay for treatment. It offers comfort in a difficult world. Comfort which should be available to everyone equally since we are all, equally, citizens of our country.  We may not all be able to contribute equally on an economic level but that is a mere function of capitalism and not of human worth and value.

According to American detractors there are hordes of Canadians dying due to unacceptable wait times. Scores of Canadians trip easily across the border for treatment there that they, ostensibly, cannot receive at home – a fallacy which has gained second wind by the one Canadian woman willing to pour shame on her country through U.S. Republican ads because she wasn’t willing to wait for treatment here, (although the direness of her diagnosis and length of her wait still reside somewhere in that nebulous neighbourhood of right wing media scuffing and prevarication). Is it possible that these American pundits believe that Canadians would allow this unbelievable death rate due to exponential wait times continue were it true?  Do they imagine that we have no political will, awareness or power such that we would allow the continuance of these death rates? What level of apathy must they attribute to the Canadian public!

In any case, all of this is just my very grateful reaction in defence of our wonderful universal healthcare. The bottom line is that our system should have little if any relevance to the current American debate since Obama’s bill is about as close to our own system as the Andromeda Galaxy is to the Milky Way.  Obama’s bill would allow for a mix of private and public funding. Ours doesn’t.  Obama’s bill isn’t universal, ours is. The list goes on. It strikes me that in their effort to tear down anything Obama is trying to build, these people are willing to attack their friends and neighbours. A better friend and neighbour Americans couldn’t have than Canada. We have an innate love and admiration for their country. They are our biggest trading partner as we are theirs. Our cultures are intermeshed, our friendship deep and our history rich and lengthy. Our border is, indeed, the longest undefended border in the world. That, in and of itself, speaks volumes.

I love the healthcare we have in Canada. It gives me untold comfort. With three children this is a very vital part of my security. Americans, rightly, worry about national security. It may be that we all have different perceptions of the meaning of national security, but surely, at its most fundamental level, it can mean no more than the protection of each citizen’s right to live. Given this context what could afflict a nation’s people more, threaten its security more profoundly, than the inability to receive medical care? Just look around you at third world countries where malaria, polio and other illnesses are still the scourge.

Codicil: After having posted this I realized that it did come across as overly strident. I neglected to say that I believe the overwhelming number of Americans do not hold the views of this vocal minority. I did not intend to portray that view at all. But the minority who are so stentorian manage to project an image that, at times, overwhelms the majority. Most Americans, I sincerely believe, want the best for every single individual within their borders and don’t agree that attacking the Canadian system is the way to cast dispersion on Obama’s plan.

In addition, I strongly urge everyone to read David’s letter to President Obama about his son Woody. I challenge anyone to read it and still argue against healthcare reform in the U.S. while retaining a modicum of humanity. There is a link to the letter on the sidebar. In addition, for the lighter side of anti-Obamacare protests, check this out; “The Funniest Protest Signs Of 2009” (PHOTOS) http://bit.ly/NGzhC