Tuesday, August 16, 2011

News Flash: Obama Has Switched To The GOP

     Not officially, of course, but the recent actions of the Great Comproloser certainly mirror those of his “loyal opposition.” In spite of Dick Cheney's remark that “deficits don't matter,” the Republican strategy for insuring that Obama is a one term president consists of carping about, what else? The deficit. (Cheney would probably not be conservative enough to run for office as a Republican in 2011.) And it might work, but Obama should know better than to join them.
     But the problem is not the deficit, it's jobs, jobs, jobs.
     On August 5, 2011, Standard and Poors lowered the Federal Credit Rating from AAA to AA+, a rating that most businesses would love to have. Expectations were that the government would have to pay a higher rate of interest in order to borrow money through T-bills, Treasury Bonds, etc. One week later, August 12, interest rates on government securities were at an all time low. Lenders still consider Uncle Sam the worlds safest debtor.
     The reason given for S & P's action was that the bickering between Congress and the President over cutting expenditures gave the impression that the government was incapable of controlling costs. So a compromise was fashioned which guaranteed that if the various branches could not come to some sort of agreement, costs would be cut using an ax rather than a scalpel. I predict that they are going to need the ax.
     Now I will let you in on a secret, or more likely a subliminally known fact, which no one wants to acknowledge: just as there is no free lunch, there is no free government funding cut. Someone always, always pays. If education is cut, kids pay immediately through a smaller number of available courses and larger class sizes, and eventually everyone pays because of an under-educated work force. If fire and police and air traffic personnel are axed, everyone is less safe at home, in the streets and in the air. If highway construction and maintenance are reduced, expect more potholes and other dangerous conditions. (In Pennsylvania alone, of the 25,000 state-owned bridges, 6,000 are considered structurally deficient. Some day soon someone is going to drop into the river.) If health care expenditures are cut, a smaller number of people have access to medical attention and more people die due to untreated conditions. I could go on, but you get the idea.
     The government should be taking advantage of today's historically low interest rates to create jobs by upgrading and building highways, power grids and other public utilities, airports, railroads, national parks and conservation projects. It does not take a huge stretch of the imagination to understand that working people buy products, which creates more demand, which leads to more working people.
     Recessions are not cured by cost cutting – they are cured by prosperity. The great depression of the 1930s might still be with us if that greatest of all stimuli, WWII, had not come along.
     This does not mean that prudent cost cutting is out of order. Here are a few possibilities:
     The tax code should be rewritten to set fair rates, and to eliminate loopholes and credits for businesses that send jobs overseas. Profits should be taxed where they are earned instead of where “corporate headquarters,” in some cases only a post office box, is located.
     Megafarms, those with annual profits in the millions of dollars, should not receive subsidies.
     Stock traders should pay a small tax per share traded, say, a quarter of a cent, in order to correct the artificially high stock market value, which today is set by high frequency traders. It would cost the trader of 10,000 shares a mere $25, but the HFT who trades ten million shares per day would pay $25,000. At a profit of .02 per share, such a trader would be forced to compete instead of running rough-shod over the market.
     Cutting the Pentagon budget is also under consideration in the Congress. As to be expected, the Secretary of Defense, Leon Panetta, is claiming that we would not be able to adequately defend the country with less resources. That would be more believable if we were not already spending as much on defense as are the next twenty countries of the world combined. In addition, considerable money could be saved if we were to limit our wars to countries which present a danger to the U.S.
     The so-called entitlements need to be tweaked to provide for future recipients. (I don't understand why “entitlements” are a bone of contention – it's not as if the people receiving them had not paid for them.)
     The suggestions listed here are only a beginning – I am sure that many more projects and savings can be found. In any case, we need a real leader who can bring them to fruition. I cannot think of a single such person in either party.
     Not so in English. Obviously, the wrong word order can completely change the meaning of a sentence.
This characteristic of the language is a source of jokes for Category 5, Distortion of construction.
     Distortion of Construction – There Are Only Seven Jokes.

      “There Are Only Seven Jokes” and “The Spirit Runs Through It” are available in paperback, or at the Kindle Store.

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