Posts tagged ‘U.S. Budget’

03/19/2012

Coast Guard Stations Could Close

Of the 173 active U.S. Coast Guard stations, approximately 85 are redundant, and could be closed to help reduce the National Debt. The Guard has 74 bases on the Atlantic, spanning 2,069 miles, 23 in the Gulf of Mexico, spread over 1,631 miles, 28 on the Pacific, from San Diego to Seattle, and 42 in the Great Lakes.

The original purpose of the Coast Guard, in 1790, was to help stamp out piracy. Their duties expanded in the 1800s, as shipping by sea grew to be the primary carrier for commerce and business. At one time, 350 lighthouses were manned by the Guard.

During the second half of the 20th Century, technology made the existence of a large number of coastal stations obsolete. Advanced communications and helicopters changed the nature of rescue at sea operations, and reduced the need for as many ships and ports.

Most Coast Guard facilities however, built in the mid to late 1800s, still remain open, thanks to pork-barrel politics. Proof that a great number of bases are no longer needed can be found in our newest states. Alaska, which has a general coastline of 5,580 miles, has only 3 stations. Hawaii, with 750 miles of shore to patrol, has just two ports. Puerto Rico, our territory in the hurricane belt, gets by using just a single outpost.

The Guard could continue to serve their purposes with roughly one facility for every 100 miles of coastline. If this rule was implemented, facilities could be closed in nearly every area:

15 could be decommissioned in New England:
Maine, with 230 miles of shore, could close 4 of 6 stations.
New Hampshire (13 miles) doesn’t have a base, or need one.
Vermont (landlocked) should shut down the one they have.
Massachusetts (192 miles) could shed 8 of 10 facilities.
Rhode Island (40 miles) may retain one, but terminate 2 others.
Connecticut (166 miles) could preserve the training station at Groton as well as the Coast Guard Academy at New London.

19 could be eliminated along the Northeastern Atlantic:
New York (127 miles) could cancel 6 of 8, sparing the Staten Island base, and the Brooklyn Air Station.
New Jersey (130 miles) should unload 8 of 10.
Pennsylvania (not on ocean) could close their Philly area base.
Delaware (28 miles) could maintain the one they have.
Maryland (31 miles) could keep Baltimore’s, while vacating four.
The DC Coast Guard Headquarters would remain.

11 on the South could be boarded up:
Virginia (112 miles) could get by with 1 of the 3 they have.
North Carolina (301 miles) should close 7 of 10.
South Carolina (187 miles) could maintain the two they have.
Georgia (100 miles) should give up 2 of 3.
Florida (580 Atlantic miles) can keep their 6 on the east coast.

6 bases in the Gulf of Mexico could be closed.
Florida (770 miles) could function with 8, including the facility at St. Petersburg, while closing down 4 others.
Alabama (53 miles) could keep the one base they have.
Mississippi (44 miles), doesn’t need 2; one has to go.
Louisiana (397 miles), with only 3 stations, can maintain theirs.
Texas (367 miles) should terminate 1 of their 5.

14 on the West Coast can be vacated:
California (840 miles) can eliminate five, and continue with 8, including the San Diego Air Station, and the Alameda base.
Oregon (296 miles) closes 4, while covering 296 miles with just 3.
Washington (157 miles) doesn’t need eight; five should get the ax.

20 bases could be shut down on the Great Lakes:
New York could retain the 3 they have on Lake Ontario, to patrol a 331-mile Canadian border.
New York on Lake Eire (77 miles) would have to unload 1 of 2.
Pennsylvania on Lake Eire (51 miles) could maintain their base.
Ohio on Lake Eire (312 miles) needs to board up 6 of 9 stations.
Michigan on Lake Huron can keep 3 of 6 along roughly 300 miles of Canadian border.
Michigan on the east side of Lake Michigan (354 miles) doesn’t need 5 of 9 stations, as they have no international duties.
Indiana on Lake Michigan (43 miles) could keep their base.
Wisconsin on Lake Michigan’s west shore (245 miles) could get by with 3 of their 7 stations.
Illinois on Lake Michigan (63 miles) says good-bye to 1 of 2.
Michigan’s 2 stations on Lake Superior, covering 208 miles of U.S. Border, would both be spared
Wisconsin on Lake Superior (108 miles) could retain their base.
Minnesota keeps 1 on Superior to guard 150 miles of north shore.

Once government opens facilities, politicians fight to keep them, whether they continue to serve any purpose or not. If conservatives are serious about reducing the National Debt, they should take the lead and close roughly 85 unnecessary Coast Guard stations.

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10/12/2011

Republican Debate New Hamp (10-11-11)

The Republican candidates met in New Hampshire on Oct. 11, 2011 to debate economic issues.

INTERNATIONAL TRADE: Romney said we have been run over by China for 20 years, and he would issue an Executive Order identifying them as a currency manipulator, and then prosecute them in the WTO.  He did not want a trade war, but did not want to let them use us either. Huntsman worried if we apply penalties, we will get the same in return, because we also manipulate our currency, and a trade war would hurt our agricultural exporters.

EURO CRISIS: Gingrich said the Greek economy should not be using the Euro-Zone Currency. Ron Paul uncovered the Federal Reserve sent 5 billion overseas to bail out foreign banks.

DEFENSE SPENDING: Romney will not cut defense spending.

BANKING: If the economies of the entire world were collapsing, Romney would take action. He said we need to prevent a contagion from affecting U.S. banks. President Bush had to take action to keep all banks from closing. Santorum opposed the bailout of the Wall Street banks, and the creation of the Troubled Asset Relief Program (TARP), which Romney, Huntsman, Perry, and Cain supported. Bachmann said the banks cannot grow, because they are being required to comply with new rules. Cain thought the Wall Street protesters should target the government.

FEDERAL RESERVE: Gingrich said the fix has been in since the Bush Administration. Newt said Paulsen, Bernanke, and Geithner are not smart, and he would fire Bernanke and Geithner over the crisis. He singled out Bernanke for spending billions bailing out one group, over another. He said it is wrong for one man to have that kind of secret power. He wants all Fed documents released, so we can better prepare for the next crisis. Romney would also discharge Bernanke. Cain had no objection to a Fed audit. Paul called the Fed the engine of inflation and the source of recessions.

INTEREST RATES: Paul said Greenspan kept interest rates too low for too long. Easy credit caused a bubble and then it burst and now we need a correction. We should not have someone at the Fed deciding what interest rates should be, or how much money we should have. We should go back to the gold standard, Paul said. Because the Fed is setting artificially low interest rates, Bachmann blamed the financial meltdown on the government.

HOUSING: We built too many houses, Paul said, and then the Wall Street speculators got bailed out, but the Middle Class lost homes. Freddie Mac and Fannie Mae caused overbuilding and distortions, and the government must get out of housing. Bachmann said the government pushed housing goals, as Freddie and Fannie put mortgages in a difficult place. Gingrich said the easy ability to buy homes is where we went wrong the last decade. He blamed the Countryside deal on the lobbyists for Freddie Mac.

JOBS: Romney said funds should not have been used to bail out GM and Chrysler. The NLRB should not be telling Boeing it cannot build in a non-union state. He said we borrowed 800 billion for a job stimulus, but didn’t see any jobs. Huntsman would regain our industrial base by lowering taxes and lessening regulations. Santorum said we are uncompetitive, and must reduce corporate taxes from 35% to zero on those who invest in plant and equipment in this country. Perry wants our manufacturing back.

ENERGY: Perry would repeal regulations that interfere with the energy industry. He would put 1.2 million people to work in the industry, so the U.S. can become energy independent. It was wrong, he said, for Obama to invest in Solyndra, a solar energy firm. When asked about doing the same in Texas, he said his legislature had oversight and created 54,000 jobs. Santorum would drill in Pennsylvania, saying it is a gas capital.

HEALTH CARE: Romney said Americans are not satisfied with the status quo. Although he would repeal Obamacare, he asked, what are we going to replace it with? In Mass, he dealt with the 8% who were uninsured. He said Perry has one million uninsured kids in Texas, while Mass has less than 1%. Romney said Obama’s plan raises taxes and spends trillions. Huntsman wants a health care solution that works in the market. He warned the IRS is already gearing up with 19,500 employees to administer the insurance mandate. Santorum would repeal Obamacare, but not by waivers. He would repeal the taxes and spending for it, so the insurance mandate would have no teeth.

MEDICARE: Gingrich was asked: Are the last two years of life under Medicare wasteful spending? He did not want death panels. Bachmann warned Part B for hospitals will be broke in nine years. She thinks Obama would push people out of Medicare into Obamacare, and 15 political appointees will make major decisions for 300 million Americans. Perry says Medicare needs to be block-granted to the states.

BUDGET & DEBT: Cain wants revenues to equal spending. Perry would propose a Balanced Budget Amendment, because we raise taxes, but never get spending reductions. Paul said the debt is a burden on the economy. Bachmann opposed increases in the Debt Ceiling, because she did not want to give Obama another 2.4 trillion. We spend 40% more than we take in, she said, and cut backs on spending would be only part of the answer. Romney said we cannot have more tax revenues, because that would kill jobs.

TAXES: Romney would not raise taxes. We don’t need Cain’s 999 tax plan, said Perry. The last thing Bachmann would do is let Congress impose a national sales tax, a suggested by Cain. Santorum said Cain’s plan would not pass, because no one supports a national sales tax. Huntsman would not do Cain’s tax plan, but instead something doable, like eliminating loopholes and deductions for individuals, as recommended by the bipartisan Simpson-Bowles Commission. Huntsman would also phase out corporate welfare and subsidies. He said he had a flat tax in Utah.

9-9-9 PLAN: Cain would throw out the entire tax code, including the progressive income tax, the capital gains tax, death taxes, and payroll taxes, and he would replace it with a 9-9-9 plan: 9% corporate business flat tax, 9% federal income tax, and 9% national sales tax. He was asked why Americans would be willing to pay more for bread and milk, under his new 9% national sales tax. He gave an incorrect answer, suggesting ordinary people are now paying 15.3%, when in fact they pay only 7.65%. He tried to suggest they would be save 6%. He thought people would have more for sales taxes, since they would pay less in payroll taxes. Cain also appeared ignorant of how Congress works, when he said he would ask them to require a 2/3rds vote before increasing any of his 999 taxes. He would need a Constitutional Amendment.

09/27/2011

Republican Debate Orlando (9-22-11)

The Republicans had another debate on Sep. 22, 2011 in Orlando.

FOREIGN POLICY: After 10 years of war, Huntsman said it is time to bring troops home and to project America’s goodness. He said only Afghanistan can save Afghanistan, and only Pakistan can save Pakistan. Romney believes it is wrong to criticize Israel for illegally constructing settlements in occupied Palestine. He thought it is unacceptable for Iran to become a nuclear power. Santorum, also pandered to the Israeli Lobby, saying he would not remove any troops from the Iraqi region, as he wants to fight to win, and would stay until we succeed. He wants better relations with Pakistan to ensure nuclear weapons do not fall into the wrong hands. Perry would use India as an ally to deal with Pakistan. Gingrich predicted Pakistan will become more dangerous in near future. He would eliminate government to government foreign aid, and would deny money to any state that does not vote with the U.S. in the UN. Cain was against the Palestinians, but did not explain why. He said if you mess with Israel, you mess with the U.S. While Johnson would promote trade by allowing direct flights to Cuba, Bachmann opposes them, because she thinks Cuba is still a state sponsor of terror.

GAYS IN MILITARY: Santorum would reinstitute don’t ask don’t tell in the military, saying they should keep it to themselves, and sexual activity has no place in the service.

JOBS: Ron Paul said jobs are created by people, not governments. Santorum’s job solution is to abolish public sector unions. Perry would create jobs through energy independence and the repeal of regulations. Huntsman said the 15 million unemployed need tax, regulatory, and energy reforms. Bachmann thought employers are not hiring because of Obamacare. Johnson neighbors’ two dogs created more shovel-ready jobs than Obama. Cain said we just need leadership. Romney, a conservative businessman, quipped: to create jobs, you have to have had one. Gingrich said the economy will turn around when Obama loses. He would require unemployment recipients to go through state training programs to qualify for benefits, saying it is wrong to give money for nothing.

U.S. BUDGET & TAXES: Huntsman said this is the worst time to raise taxes, and would instead eliminate corporate welfare and phase out loopholes. Johnson would stop spending $10 for every $6 we raise, and would balance the budget. He would cut 43% of the federal budget, including 43% of military spending. Romney, clearly out of touch, thought he would help the Middle Class by eliminating taxes on interest, dividends, and capital gains. The unrealistic Bachmann first said we should get to keep every dollar we earn, but later said money is needed to run the government. The untested Cain would throw out the entire tax code, including employer matching Social Security, and would create a 9-9-9 plan, including a new regressive 9% federal sales tax, a 9% corporate tax, and flat 9% income tax.

ENERGY: Huntsman wants to develop natural gas, because we cannot use wind or sun right now. Cain claimed the EPA is regulating dust and so he would eliminate the agency.

IMMIGRATION: Perry spent more time on immigration than anyone, he said, as Texas has a 1,200 mile border. He wants to stop illegal immigration, but said a 1,200 mile wall is not going to work. He joined the AZ lawsuit, but gave in-state tuition to illegal aliens. Fellow Texan Ron Paul would give illegal aliens nothing. Santorum said Perry is soft on immigration, and illegals should be treated like any other out-of-state person. Romney criticized Perry for giving in-state tuition to illegals, saying it draws them into the country. He would crack down on employers who hire illegals. Gingrich wants secure borders, English language education, and a modernization of visas. He wants to know what employers object to regarding the verification of Social Security numbers.

SOCIAL SECURITY: Romney said Perry does not want Social Security to be federal. Romney would make the current system sound. Cain wants to fix SS by using the Chilean model.

HEALTH CARE: Romney adopted the Mass. health care mandate to deal with the 8% in his state who were uninsured. He said the federal law is not the same, and wants states to have waivers. Huntsman said the health care approach is wrong, since we need affordable health insurance to reduce the number of uninsured. He would let the states experiment. Perry was asked why 25% are uninsured in Texas and it ranked 49th in Medicaid. Each state, Perry said, should deliver their own health care. He disagreed with President Bush for establishing Medicare Part D and called Romney’s state plan the same as Obama’s. Bachmann attacked Perry for surrendering parental rights to the drug companies and mandating injections to 12-year-olds. Cain thinks he survived cancer, because he was not on a bureaucrat timetable.

CHURCH & STATE: Bachmann correctly said Jefferson valued religious liberty and we should not have a state or national church. This does not mean we are not people of faith. She said we should be able to exercise our faith, but failed to say who was denying it.

STATES RIGHTS: Ron Paul said the federal government has no authority to run schools, the economy, or our personal lives, and he would veto all bills that violate the 10th Amendment.

EDUCATION: Ron Paul wants the feds out of education, saying nobody likes No Child Left Behind. Johnson said 11% of federal spending goes to education with strings attached, which he would cut. Huntsman thinks early childhood literacy is important, but wants education local, with no unfunded mandates. Bachmann and Cain want local control, and would get the Feds out. Perry supports school choice, a local issue. Romney would stand up to teacher unions, another local issue. Gingrich would add Pell grants for K-12, but would get rid of federal regulations.

ABORTION: Ron Paul said abortion is a state, not a national issue. He asked how they could police the day-after pill, since such laws are not going to solve the problem.

TORT REFORM: Perry raised another state issue by warning trial lawyers not to file frivolous lawsuits in his state.

VICE PRESIDENT: When asked who on stage would be their Vice-President, Romney was typically vague, saying anyone could serve. Bachmann wanted a strong constitutional conservative. Gingrich would pick someone capable. Ron Paul would choose once he reaches the top tier. Johnson would pick Ron Paul due to monetary issues. Huntsman surprised reasonable people by picking Cain, who has no government experience. Perry wants a cross between Cain and Gingrich. Cain would pick Romney or Gingrich. Santorum would choose Gingrich.

09/08/2011

Republican Debate California (9-7-11)

One year and two months before the 2012 election, Republicans gathered to attack President Obama again in yet another debate.

FOREIGN POLICY: Huntsman said bring the troops home so we can do nation-building here. Perry complimented Obama for keeping Guantanamo open and executing Bin Laden. Bachmann felt it was wrong for Obama to tell Israel to return to the 1967 borders. She opposed the Libyan operation, saying no American interest was involved, and we did not know the rebels. She wanted to disarm a potential Iranian nuclear threat. Santorum opposed isolationism and wants the U.S. to become a force for good.

JOBS: Although Republicans usually say the private sector and not the government creates them, Perry took credit for 1 million new ones in Texas. Romney also claimed he made new jobs, by understanding how the economy works in the private sector.

IMMIGRATION: Perry said the El Paso border was unsafe and federal border security support was needed. Romney wanted no amnesty, a fence, agents to secure it, and an elimination of the magnet caused by employers who hire illegal aliens. Gingrich wanted everyone, including Americans, to learn English and U.S. History. Bachmann said immigration worked through the 1950s, before the rules changed. Cain wants the federal immigration issue to be given to the states. Huntsman said two of his seven children were from India and China, and he saw the issue through their eyes. He wants legal immigration fixed. Paul said states should not be forced to provide benefits for illegal aliens.

BUDGET & FEDERAL RESERVE: Perry wants a Balanced Budget Amendment, saying the Keynesian approach is dead.  Romney said the Fed pumped too much money into the economy. Gingrich would fire Fed chair tomorrow and audit the agency.

TAXES: Cain came up with a wild proposal to increase sales taxes to 9%, even though it’s regressive and disproportionate as to the poor. He was questioned about a corporation that earned 14 billion, but paid no taxes. Hunstman would make no tax pledge Romney said all should pay taxes and wanted dividends tax free.

RETIREMENT: Romney said we must save Social Security, not abolish it. Perry said it was a Ponzi Scheme, wrong from the very beginning, and it needed change. It’s a lie, he said, to tell young people they will receive benefits some day. Cain wanted to set up private accounts with personal names on them.

HEALTH CARE: Romney said those without insurance simply went to emergency rooms, forcing taxpayers to pay. He promised waivers from the new law to states who wanted them. Perry was asked why 25% in Texas had no health insurance and ranked dead last. People don’t want mandates, he said, as he suggested Medicare block grants for the states. Bachmann claimed “Obamacare” regulations (which haven’t taken effect yet), are “killing jobs.” She said the law took over one-sixth of the economy and hard work is needed to repeal it. Cain said insurance mandates are unconstitutional. Gingrinch said they all want to repeal the law. Huntsman, out in front of the curve, asked how they would solve the issue once the existing law was repealed.

ENERGY POLICY: Romney suggested developing oil, gas and nuclear power. Huntsman said gas prices are determined in the market and government cannot dictate them. The true cost of gas, he said, includes government spending to keep the Persian Gulf sea lanes open. Bachmann said a gallon of gas was $1.79 when Obama took office and we needed energy jobs in America. She was asked to explain her suggestion to drill in the Everglades. Gingrich would drill in Alaska. Perry thought climate change was not science.

FEMA: Paul said it didn’t exist before 1979. He would let private airlines take over the TSA.

EDUCATION: Gingrich would give Pell Grants to kindergarten through 12th grade. Huntsman said Republicans cannot be anti-science. On poverty, Santorum said he reduced it through welfare reform, and wanted to eliminate the dependency culture.

DEATH PENALTY: Perry received great applause from the partisan audience as he said Americans support capital punishment, and he slept well after executing more prisoners than any other state.

As to their fitness to serve, Huntsman, a former governor and ambassador, said he served 4 presidents: Reagan, Bush I, Bush II and Obama, and only he would be able to attract independents.

08/22/2011

Military Waste: Spending Taxes on Golf

When a friend showed me an ad placed by the U.S. Army seeking a “Professional Golf Management Trainee,” it reminded me of how much waste there is in the military budget.

This is no joke. The Army has a full-time permanent position for a golf trainee. The starting salary is up to $38,000, but the cost to us is much higher, as the position includes full benefits such as: health and life insurance, 401-K retirement, paid holidays, sick leave, vacation time, and possible student loan repayments. Many vacancies exist in the U.S., and relocation bonuses are possible.

The job is said to be “crucial to support military operations.”

Management trainees undergo 24 months of on-the-job training, and 12 months at an Army installation. The training varies by installation, but focuses on golf course and pro shop operations.

The trainee learns how golf courses operate. Training includes: 1) the conduct of play; 2) how to keep the facilities clean and safe; 3) how to make sure the course meets quality golf standards; 4) how the maintain relations with the grounds crew; 5) how to manage the golf cart fleet; and 6) how to oversee the food and beverage for outings and tournaments.

Along with college transcripts, a degree from a Professional Golf Association Management Program is required, along with three professional Letters of Recommendation.

The above is just one example of the waste in the military budget. Can you imagine what the right-wingers at Fox would say if the Environmental Protection Agency (EPA), Equal Employment Opportunity Commission (EEOC), or National Labor Relations Board (NLRB) considered golf “crucial” to their operations?

If the country is going to cut budgets, let’s not forget there are millions, and probably billions of dollars wasted each year by the military. Military budgets should never be off the table. The politicians should have the courage to examine their spending and eliminate wasteful expenditures not needed for national security.

08/17/2011

Republican Debate Economics (8-11-11)

As the Republicans debated economic issues in Iowa, including the recent increase in the Debt Ceiling, many demonstrated an intellectual dishonesty, as they again pledged not to raise taxes, but simultaneously supported costly military expeditions abroad, two positions that will certainly force the U.S. to borrow billions.

TAXES: Gingrich continued to shovel the idea that tax cuts will led to growth, while Santorum and Cain, respectively, want to reduce to zero the Corporate Income Tax, and Capital Gains Tax.

BORROW-SPEND: The Republican refusal to raise taxes has led to borrowing and spending, which has sunk the nation deep into debt, leaving only two choices: 1) increase the Debt Ceiling and borrow so creditors who lent the money can be paid, or 2) default.

DEBT CEILING: Congresswoman Michelle Bachmann demonstrated a stark ignorance regarding the economy, as she condemned her Republican colleagues for increasing the Debt Ceiling. She confused the issue by saying those who voted for an increase gave Obama money, when in fact all they did was prevent a default on loans already made. The new kid on the block, Herman Cain, also opposed an increase in the Debt Ceiling.

Former Utah Gov. Huntsmann, a voice of reason, said he would never let the U.S. default and called the National Debt a cancer. Former Sen. Santorum also said the Debt Ceiling had to be raised, but Romney just talked about upgrading the Mass. credit rating.

U.S. BUDGET: As to the Budget, Congressman Ron Paul wisely said if there are going to be any federal cuts, military budgets have got to be on the table. Former House leader Gingrich, criticized the Committee of 12, which was convened to resolve budget issues.

FEDERAL RESERVE: Paul’s weakest area is his distain for the Federal Reserve Board. As to monetary policies that have kept interest rates low, Paul was critical, saying they only distort the economy. Apparently, he does not think they will stimulate economic activity. At one point Paul said the U.S. owes the Federal Reserve 1.6 trillion, and the Fed should be audited. Paul’s comments were obviously popular with the partisan crowd, as they booed Santorum for attacking Paul. Gingrich joined Paul saying it is a scandal that the Fed deals with billions in secret, and does not explain who is bailed out, or why.

FREE TRADE & JOBS: On the issue of jobs and trade, Santorum, who consistently supported Free Trade while in the Senate, correctly pointed out the number of Americans employed in manufacturing dropped from 21% to 9%, but he offered no solutions. Romney said we need trade policies that work for us, but he also failed to give any details. When he was asked to explain why people were laid off from companies he owned, he had little to say.

ENVIRONMENTAL PROTECTION AGENCY: Regarding the regulation of the environment, Huntsman, who owns a global corporation, said the EPA does not let businesses expand, and accused them of running a “reign of terror.”

HEALTH INSURANCE: On the economics of health, all of the Republicans of course piled on against the law the Democrats passed in 2009. Pawlenty said the Obama health care plan was modeled after Romney’s in Mass. Romney said the Mass plan was for one state, and the President’s is a one-size-fits-all, for the entire nation. He promised to grant waivers to any state that requested one.

As to the mandate to make people buy health insurance, Romney argued all have a personal responsibility to buy it. Paul said the insurance and drug companies love the mandate, and thought only doctors and patients would suffer. Bachmann thinks the government has no authority to force people buy health insurance, a position her activist right-wing friends on the Supreme Court will likely endorse. Gingrich suggested repealing Obamacare, but like the others, offered no answer to the health insurance crisis.

07/28/2011

Ask Eisenhower Re Budget, Not Reagan

One of those free copies of the right-wing USA Today was laying around the hotel lobby, and since I had a minute, I glanced at the opinion page, where the editor asked “What Would Reagan Do?” regarding the Debt Limit. I kind of chuckled, because the borrow-and-spend policies of the past 30 years started under Reagan, and he would be the last person we should ask for advice.

If Republicans wanted a true fiscal model, they should instead ask: What Would Eisenhower Do?” The General was the last Republican to deal honestly with balanced budgets. He knew enough about military spending from his service to warn the nation, as he left office, against the Military-Industrial-Complex.

President Reagan on the other hand, raised the Debt Ceiling 18 times, and just used his Hollywood credit card to keep borrowing. He cut corporate income taxes, but increased Social Security taxes on ordinary workers. His misguided borrow-and-spend policies predictably increased the National Debt threefold over eight years.

Reagan’s apologists now re-write history, as they defend his borrow-and-spend military programs by suggesting they somehow ended the Cold War. The truth is one man ended the Cold War, and his name was not Reagan, it was Mikhail Gorbachev. After Gorbachev wisely withdrew from Afghanistan in 1988, he advocated reform by promoting glasnost (openness) and perestroika (rebuilding). Once Reagan was out of office, and no longer a threat to the Russian people, Gorbachev conducted open elections in 1989, for the first time in 70 years. Gorbachev’s policies allowed for a Soviet dissolution in 1991. Reagan’s out-of-control military spending had nothing to do with it.

The bottom line is for the past 30 years, the U.S. has been in a borrow-and-spend mode. Since major sources of tax revenues were given away by Reagan, Bush, and Bush Jr., the government does not have enough money. In the Eisenhower days of the 1950s, there had to be tax revenues, before any spending took place, and yes, that included military budgets for wars, like the ones Bush Jr. started in Afghanistan and Iraq. Eisenhower would have raised taxes to pay for those wars. The Republicans of today would be wise to use Ike’s approach as their model for governing.

07/18/2011

Income Tax: Intended For The Rich

For nearly 100 years, the progressive income tax has been the federal government’s major source of revenue, and it must now be strengthened, so more is collected from corporations and the rich.

The first federal income tax, used to finance the American Civil War, was imposed from 1861 through 1873.

When Congress implemented another income tax (1894), the issue went to the Supreme Court. Although the Constitution stated: “Congress shall have power to lay and collect taxes” (Art I, Sec. 8), the opponents of the tax argued the framers did not intend for them to be imposed on “income;” they only permitted “uniform” taxes “in proportion to the census.” Since income taxes could never be based on the census or be “uniform,”  the court declared the law unconstitutional (1895).

During the Progressive Era, after Wisconsin enacted the first state income tax (1911), the nation ratified the 16th Amendment (1913), which overruled the 1895 case, and allowed a federal income tax. The Constitutional Amendment provided: “Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”

The Revenue Act of 1913 imposed an income tax on individuals earning $3,000 or more, or couples making at least $4,000. The tax applied only the rich, since it reached just the top 1% of all households. The wealthy paid anywhere from 1% to 7% of their incomes in taxes, at rates that increased as their earnings went up. The income tax was never intended for the lower or middle classes.

Today, it is the middle class that pays the income tax, as wealthy corporations escape its grasp. Although the law treats corporations as persons and gives them constitutional rights, they evade the financial duties of citizenship. While they benefit from services for transportation, energy, education, commerce, justice, state, and defense, they fail to pay much, if any, income tax.

Corporate tax evasion must be prosecuted and avoidance through exemption and deductions must end. Corporations on the Fortune 500, doing business in the U.S., should pay taxes on a certain percent of their gross “revenues,” no matter what their source, and without exception, deduction, exclusion, adjustment, credit, prior loss, loophole, shelter, or excuse.

It’s time to get tough with big corporations and the rich. They are far better off now than they were when the income tax started a century ago. It’s time to return to the good old days of the Progressive Era, when the rich were disproportionately taxed.

07/15/2011

Taxation, Not Borrowing, Is Needed

The bottom line in the U.S. Budget and National Debt debate is America desperately needs some cash, much less from borrowing, and much more from taxes. There is no realistic alternative.

The total public debt has risen at a galloping rate recently. It quadrupled during the Reagan and Bush I presidencies (1980-92). Under George W. Bush (2001-09), it increased from 5.7 to 10.7 trillion. 1 trillion was added in 2008, 1.9 in 2009, and 1.7 trillion in 2010. The aggregate national debt is now 14.46 trillion.

The tax cuts made by George W. Bush seriously damaged federal revenues. Supplemental off-budget appropriations for his wars in Iraq and Afghanistan added to the debt. Bush’s failure to fund Medicare Part D made the annual deficit and debt even worse. All of these shortfalls caused increases in the interest expense.

Instead of imposing taxes to pay for these expenditures, the government borrowed 4.6 trillion from the Social Security Trust Fund, using sums pegged for later years, and has obtained another 9.6 trillion from the public, by selling Notes and Bonds.

The debt is now at risk of growing even more, if guarantees for TARP, the Troubled Assets Relief Program, have to be honored. If the government fails to regain control of the situation, the U.S. Dollar may be devalued, and if that happens, it would cost the government even more in the form of higher interest payments.

The government historically financed operations through taxes, not borrowing. Since Ronald Reagan, however, deficit spending has been the norm. We have to get back to raising enough revenue to cover spending. We need to return to balanced budgets.

The trend line of declining tax receipts must be reversed. 45 years ago, 22% of federal revenue came from the corporate income tax, with only 2.7% from borrowing. After Reagan completed his time in office, 23 years ago, only 11% was from corporate taxes, and borrowing increased to 11%. Now, only 9% is from corporate taxes, as many large companies pay nothing at all, and borrowing is out of control. Corporate deductions, exclusions, credits, exemptions and loopholes are costing the U.S. billions every year and these abuses must be corrected.

Republicans are principally at fault, since they advocate spending for their pet projects, but consistently refuse to implement taxes to pay for them. Democrats, who remain silent, because they know they will be ruthlessly attacked if they suggest taxes as a means of balancing the budget, are also to blame. The country needs mature leadership. If we don’t get serious soon, real trouble lies ahead.

07/14/2011

Debt Ceiling Plan is Unconstitutional

Since the federal government continues to spend more than it is receives in taxes, there is a serious U.S. Budget shortfall, which can only be corrected by raising taxes or by increasing the Debt Ceiling so more money can be borrowed.

Since the Republicans, who control the House, are refusing to raise any taxes, the only solution is to increase the Debt Ceiling. But they are promising not to do that either. They simply will not acknowledge that the wars President Bush started have cost the country vast sums of money, which must be paid through taxes.

Not wishing to accept responsibility for their irresponsible acts, Sen. Republican leader Mitch McConnell came up with a Debt Ceiling plan that would get the Republicans off the hook by allowing them to blame President Obama for the entire fiscal mess. Their plan is to delegate the ability to raise the Debt Ceiling to the President, so when the Debt Ceiling is raised, as it must be, the right-wingers will be able to blame it all on President Obama.

The plan is Karl Rove politics at its best. Unfortunately, the idea is unconstitutional. If the Republicans would read the U.S. Constitution, they would learn the power “to borrow money” is specifically delegated to the Congress (Art. I, Sec. 8). It is not a power assigned to the Executive. The Congress must approve of any measure to raise the debt. Any attempt to throw the hot potato to the President would violate the Constitution.

President Obama should veto any bill that attempts to shift from the Congress to the Executive the authority to raise taxes, or the power to borrow money. The debt ceiling hot potato must remain in the House, until they act like adults, take responsibility, and either significantly cut defense spending, or raise taxes to pay for the wars their party supported. Its time the House Republicans got serious about what must be done to avoid a national crisis.