Saturday, September 28, 2013

My Debt Ceiling Demands - A Deficit of Fairness

The federal debt is something which both parties contributed in creating in nearly equal measure.  Think not, go look at the debt levels under Ronald Reagan.  Go find out that Reagan quadrupled the debt, George W. Bush doubled it.  Both parties own it.  One party seeks to spend on social programs and is more prone to raising taxes to pay for further spending (and then spend) than the other, while the other seeks to spend profligately on defense but won't raise taxes to pay for that.  Both own it, period.

So, it's no more realistic for Republicans to claim fiscal responsibility than it is for Democrats, arguably less so.  The debt levels during the Clinton years were certainly lower and not solely because of Republican demands.  No, each has a claim, each equally valid. 

Consequently, if we are going to start making demands before we agree to vote to pay bills already incurred, to pay our debts, in short, to be the "responsible" people who pay the bills they've charged up, well, then each party gets to make those demands.

So, my demands are below.  Just like the demands of the Republicans, there is NO chance any of these could otherwise be passed into law/make it through the Senate (or House) on their own.  If, though, we're going to start waging economic terrorism, if we're going to declare bankruptcy as a nation and fail to be financially responsible for and pay our debts, then I have no problem making up a list of demands the Senate Democrats should insist upon before voting to raise the debt limit.  Here they are:

1. We should demand lowering the Medicare eligibility age to 50.  People over 50 are far more likely to have serious health expenses and using the leverage of Medicare's ability to reduce payments to force cost savings into the health care system is not only fiscally prudent, it's a very good first step toward a health care system which can operate at a much lower per capita cost with generally better health outcomes (like say, what the REST of the industrialized/western world has been able to do).   Taking this ONE step alone would both eliminate our national debt AND resolve our long term fiscal challenge in Medicare.

2.  I demand that we slash $100 Billion per year from defense.  We certainly don't need the bloated, wasteful, pork-barrel filled defense system we have today.  It's time to start gutting that pig.  It's time the privatization meme' be held accountable for the vast cost increases we've seen since 1992 (rather than savings).  It's time we stop paying $1500/day for contractors in Iraq to hire a local worker for $15/day and pocket the rest.

3.  I demand that we pass a law that CEO's cannot make more than 40 times what their average worker makes.  This will have NO impact on small business who do not have any issue paying their employees at least 1/40th of their salary.  It WILL, however, cause big corporate CEO's to start looking to compensate the staff that actually makes the company work at least slightly as well as they compensate themselves.

4. I further demand a 90% tax on any income over $20 Million/year.  It won't raise much revenue, but that's not the point.  No one is worth so much they deserve to be obscenely rich while others work hard to make them so (my personal opinion on that one), but even more importantly, it will provide a disincentive to offshoring and incentivize companies to pay their employees and maybe even invest in infrastructure on-shore.

5.  I think we should demand that companies which chose to offshore jobs must pay income tax (straight) on the average difference between labor expense in the country where the job was moved as compared to the average salary for the job they moved overseas.  It's pure profit to them, it's time they were taxed on it.

6.  We should demand the re-adoption of Glass-Stegal and the fairness doctrines.  As well, any news outlet which reported a story without concrete double-sourcing and which later turned out to be untrue, even if it were simply allowing a "commentator" to offer such "facts", would be fined $1m per incident.

7.  Lastly, and seriously, we should demand that mortgage lenders have to establish a review panel to draft rules for loans, overseen by the Office of the Comptroller of the Currency.  Such rules must requiring mortgages can only be given to people with net income OR investible assets which can be promised against the debt (e.g. what used to be and should still be an income to debt ratio means test which banks USED to use in all cases before writing out a mortgage).  Such rules will also require that loans cannot exceed the estimated value of the property (no more 125% loan to value loans), and lastly, that mortgage backed securities must assume a default rate of 1.5 times the historic average since 1930, rather than simply using the default average of the last 5 years (or some similar measure).  This would prohibit the creation of highly optimistic derivatives and the inherent risk which exists in the essentially unregulated bond market would, at least as regards MBS', would be eliminated.

And even more seriously, since WHEN do Republicans get to threaten the economy, make their demands SOLELY, as if they were the only people "watching the shop?"  Nothing could be further from the truth.  They spend profligately on their own projects, and unlike Democrats, fail to tax sufficiently to pay for those projects, exploding the debt.  No, these obviously can't pass, but they should be demanded, and when the Republicans balk, the Democrats should simply say, "I'll drop my demands ONLY when you drop yours.  I don't mean to hold the country hostage, but neither will I let things be passed into law which cannot otherwise pass muster unless I get some of my own.  It's time you children (Republicans) stop stamping your feet and acting like only your ideas haven't been given full treatment, we have ours too but unlike you, we won't demand they be met or wreck the economy.  If you insist on it, we'll demand things too, and you won't get anything at all without giving up something you very much don't want to do. Because THAT's actual negotiation.  Passing the debt ceiling is not doing something we want and you don't, it's paying bills we are responsible to pay, bills we promised we'd pay, and not doing so is breaking our word and the height of personal and professional irresponsibility."

These are my demands.  Meet them or the economy gets it.

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