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Sunday, December 17, 2017

Patriotically Speaking

Credit: Center on Budget and Policy Priorities
The economic downturn, the Bush’s tax cuts and the unfunded wars explain virtually the entire deficit over the over the next ten years.
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Our country's situation is wretched. Our funds are exhausted; our credit is lost; our confidence in the federal government is destroyed.

The sub-head could be a reprint of a current headline, but it is not. This is the slightly paraphrased statement of a member of the Confederation Congress in 1786. These were also times that tried Ameicans' souls. Two hundred twenty-five years later the time of crisis visits us again. As with the original crisis and its second rendition a decade later, summer soldiers and sunshine patriiots once more shrink from the service of their country. We must remember, patriotism is much more than waving the flag, wearing a lapel pin, or insisting on one's rights and extolling freedom. Patriotism requires standing by one's country in dire circumstances, doing the deeds and paying the costs to ensure that the Republic stands, perhaps battered, but definitely unbowed. As the debt ceiling drop dead date comes ever closer, patriotism demands good faith efforts to reach a sensible solution that protects the full faith and credit of the United States and does not advance a partisan agenda.

As Ezra Klien states, "Today’s debt-ceiling debate is about more than the debt ceiling: It’s about how we’re going to handle our economy and our deficit going forward. And the weaker and more incapable our political system looks, the more some market participants will begin to wonder whether it’s really so unthinkable that the American political system could make some very bad decisions, or fail to make some very necessary decisions, over the next five or 10 years." This matter is not truly and fundamentally about finances. The central issue is - Does the Republic of the United States retain the political coherence to function effectively in the face of a genuine challenge, or has the spirit of faction so frayed the political bands which have connected us with one another, that the Republic is now an impotent and paralyzed husk of what it once was?

On June 25, 2011, Republicans demonstrated once again that they lack any serious intent of addressing the budget deficit. Bipartisan debt ceiling talks led by VP Biden collapsed Thursday when GOP negotiators Eric Cantor and Jon Kyl walked out because Democrats were pushing for a balanced approach that includes both budget cuts and revenue increases. President Obama has scheduled a meeting for Monday with Senate leaders Harry Reid and Mitch McConnell. Meanwhile House Speaker John Boehner warned again that House Republicans will not vote for a debt limit increase that includes higher taxes. August 2nd is the drop dead date by which a deal must be struck. It appears the GOP is planning to play chicken down to the wire, risking what Boehner himself has called “financial disaster.” While the debt limit and the deficit are not identical, Republicans have tied them together because they seek to use the pretext of the former to gain partisan advantage regarding the latter.

The very manner in which Republicans discuss or refer to the deficit reveals either their shallow understanding or their rigid factionalism. Properly understood deficits are the result of expenditures exceeding revenues. To reduce or eliminate deficits any entity - household, business, or government - has two avenues. One is to decrease expenditures and the other is to increase revenues. If one's goal is to reduce or eliminate a deficit, one should consider both avenues and proceed as far down each as seems most likely to achieve the goal with minimal hardship and disruption to all parties concerned. If one precludes either approach from thoughtful consideration, one undermines the credibility of one's concerns and proposals. As the St. Louis Post-Dispatch opines - "It's sad to see what has happened to the Party of Lincoln, and for that matter, the party of lesser mortals like George H.W. Bush of Texas, Bob Dole of Kansas and Jack Danforth of Missouri. No one ever would mistake them for liberals, but they were statesmen who put country before party."

[Read more: http://www.stltoday.com/news/opinion/columns/the-platform/article_b477e0fb-aab4-5d8e-90fe-c42826da31dd.html#ixzz1QlKt1Ow7]

How would patriots act in the face of a debt and deficit crisis? In 1783, George Washington called on the country to pay its bills as a matter of justice and honesty. He stressed that default on the country's obligations would undermine its ability to borrow and cast it into disrepute. According to Washington, "We [the United States] have it in our power to be one of the most respectable Nations upon Earth." He believed, "nobody could deny that our resources are ample and increasing, but denying government a share of that wealth gives the vital stab to our public credit and must sink it into contempt."

During this interval of American history, repeated incidents had shown the government's sad financial condition and left America at the mercy of other nations. All the while, the national Congress remained in a state of powerless paralysis. In the late eighteenth century, Congress and the federal government lacked the power to act. In the early twenty-first centrury, any impotence and inaction results from factional strife in Congress, not from a lack of just powers.

The term faction is used here as it was used at the time of the Founding and the Framing. By faction James Madison meant, "a group of citizens, either a majority or a minority, united and actuated by some common passion or interest adverse to the rights of other citizens or to the aggregate interests of the community." [Federalist Paper #10] I mean the same thing. A group of people united by a common passion or interest that works against the common good. For most of the last thirty years, this faction has been the core of the Republican Party. The passions uniting this group of citizens are generally known [1] The Laffer Proposition, [2] The Starve the Beast Hypothesis, and [3] The Drown in a Bathtub Objective. None of these arises from the principles, purposes, and promises of the Founders and the Framers, but the proponents of all frequently masquerade as patriotic Americans.

The Laffer Proposition says cuts in tax rates will pay for themselves due to higher economic activity. The Starve the Beast Hypothesis says tax cuts will increase budget deficits and put downward pressure on public spending. Proponents of these two ideas [usually the same people] fail to notice or refuse to acknowledge that the ideas are inconsistent with one another. Tax revenues cannot concurrently increase enough to pay for lower rates and decrease enough to increase deficits and depress spending. Both these ideas cannot be true, but they can be and are both wrong. Cutting tax rates does exactly what common sense predicts it would do. It lowers revenues. Lower revenues do increase deficits, but they do not decrease spending.

Both the twelve years of Reagan-Bush and the eight years of Bush-Cheney show that Starve the Beast is an utter failure. The deficit that Republicans now use as a pretext for insisting on Draconian spending cuts and pushing continued low or even lower tax rates resulted from precisely the policy priorities they have imposed on the Republic. Republicans want to use the problem their policies created as an excuse to persist in these failed and harmful ppolicies. In this context, it must be remembered that the idea of starving the beast is essentially a bait and switch tactic. As Paul Krugman explained, "Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit." This was initiated thiry years ago and it continues to the present day. Now the deficits have come as the starve the beast tactic intended. Republicans are now forced to explain how they will deal with the deficit if they refuse to seek new revenues. The problem is the Republicans had no plan except to obstruct the Democrats and strive to regain power. Because depriving the government did not force Democrats to abandon programs Americans need and love, the Republicans walked out of negotiations and seem prepared to let the crisis become a catastrophe. Now Republicans who as a party opposed Social Security and Medicare at their inception are arguing that cuts [ aka reforms] to entitlements are essential because the fiscal situation is so bad. This is remarkable in itself because these are called entitlements because the solemn promise of the Republic and the regular payment of the beneficiaries has created "rights to benefits as specified by law." The known adverse effects of Republican policies are used to justify depriving Americans of benefits they have earned over fifty years or more while protecting subsidies and priviliges for other Americans who have not earned them, but rather bought them. This does nothing to promote a more perfect union, establish justice, and promote domestic tranquility. Check out the situation in Greece for a glimpse of things to come if the rich keep getting richer while the Republic is impoverished. [http://www.guardian.co.uk/world/blog/2011/jun/29/greece-austerity-vote-demonstrations]

When as children, these people made the Pledge to the Flag, what did they think the Republic was if not the government they now ridicule as the Beast and seek to starve? When they swore their oath of office, what did they think transformed the Constitution they vowed to preserve, protect, and defend from an historical document to a functioning entity if not the government they want to starve? Why did they take such an oath knowing that they had signed a "Taxpayer Protection Pledge" that would encumber their freedom to make responsible decisions while in office? An elected poliitcian who cannot carry out the sworn duty to preserve, protect, and defend the Constitution is holding office as an agent of some other power. If this other power is a foreign nation, the office holder is a traitor. If the other power is some private organization, the office holder is a virtual Manchurian Candidate, a sleeper. Again one must ask, how can a person claim to be an American patriot while serving either a foreign interest or a private interest at the expense of the common interest embodied by the Republic?

As Publius asserts in Federalist #30, "Money, property, is vital to the government. It sustains its life and enables it to perform its most essential functions. Therefore, the complete power to procure a regular and adequate supply of revenue, as far as community resources will permit, is an indispensible ingredient in every constitution." This is the responsible, patriotic perspective. While nobody likes taxes, no genuinely patriotic citizen can deny that the Constitution gives Congress the power to tax, and that sabotaging this power for whatever reason does not preserve, protect and defend the Constitution. For the moment at least, we do live in a Republic. As we clamor for our rights, we must shoulder our responsibilities. The fact is more than $1 trillion in tax expenditures infest the tax code. These are foregone revenues which are more valuable the more affluent one is or subsidies to corporations many of which pursue deliberate strategies to evade payment of taxes. In other words, the government could gain $1 trillion in revenues without a single rate increase. Because the budget deficit is projected at $1.4 trillion, an action on tax expenditures is a reasonable approach to addressing it if those who complain the loudest are serious. Unfortunately, House Speaker John Boehner, R-Ohio, says, "The president is sorely mistaken if he believes a bill to raise the debt ceiling and raise taxes would pass the House. With this statement, Mr. Boehner confess his party lacks any serious intent to behave in a responsible manner. A factor in this, is that virtually every House Republican is bound by the Taxpayer Protection Pledge. In effect, House Republicans are not free to fulfill their oath and make sound judgments because they are in thrall to a private organization. They put this role before that of sworn defenders of the Constitution. Incidentally, the head of the organization, to which Taxpayer Protectors are bound, wants to "shrink the federal government so it is small enough to drown in a bathtub." What sort of responsible citizen let alone a patriotic citizen talks this way about the Republic? None worthy of the name.

The final irony of this entire saga from an informed patriot's perspective is that the Constitution seems to provide the the resolution to the looming crisis as it has so often before in America's history. A little cited section of the Fourteenth Amendment states, "The validity of the public debt of the United States, authorized by law, . . . shall not be questioned. This is in conformity to a fundamental principle and "applying as well to bonds issued after, as to those issued before, the adoption of the Amendment, and the expression "validity of the public debt " embraces whatever concerns the integrity of the public obligations." The Supreme Court cited this provision in the 1935 case of Perry versus United States. This mainly concerned redemption of gold certificates in gold rather than dollars, but it did touch on the public debt of the United States.

As a final demonstration of their frivolous posturing, Senate Republicans proposed a Balanced Budget Amendment [again]. This is the ultimate in tales told by idiots full of sound of fury and signifying nothing. "For any constitutional amendment to make the grade, two-thirds of the House and the Senate must vote in favor; and then at least 38 states need to ratify it. No wonder only 27 amendments have been added to the Constitution since it was ratified in 1788." Quite apart from the fact that the Balanced Budget Amendments in any incarnations are profouncly impractical, this current version bordres on either lunacy or idiocy. As Bruce Bartlett explains - "The gross domestic product is not a concept defined in law and is revised constantly; from time to time, the Bureau of Economic Analysis revises the GDP data all the way back to 1929. And of course, the 18 percent figure is totally arbitrary; the proposal effectively assumes that all federal outlays consist of funds that are appropriated annually, rather than consisting primarily of mandatory programs such as Social Security, Medicare and interest on the debt. Even if Congress was willing to cut mandatory spending, it is practically impossible to do so quickly unless it is willing to reduce the monthly checks going to current retirees and other actions difficult to contemplate.

In short, this is quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin. Every senator cosponsoring this POS should be ashamed of themselves."

Despite their staged reading of the Constitution at the beginning of 2011, Republicans seemingly still do not understand it or feel the need to follow it if they want to do something different. For example, if they wish to extort spending cuts from their political opponents they evade or ignore the Constitution. Because raising the debt limit is essentially a decision to pay the bills. While refusing to raise the debt limit is essentially a decision to default on government past obligations -- refusing to pay the bills. Furthermore, paying the government's bills is necessary to maintain the full faith and credit of the United States. Defaulting on the commitments would sabotage Social Security, Medicare and veterans benefits, vendor payments, tax refunds, student loans and interest payments on outstanding debt. The consequences of not fulfilling these commitments would be dire. If Congressional paralysis or factional irresponsibility makes it necessary to do so, the President should simply direct the Treasury Secretary to disregard the debt limit and sell whatever securities are necessary to pay the public debt of the United States which shall not be questioned. Due to this oft ignored provision of the Fourteenth Amendment, he would be on both sound Constitutional footing and acting in a patriotic manner. As Lincoln was not elected to preside over the dissolution of the Union, so Obama was not elected to preside over an economic catastrophe. The debt limit is statutory. The Fourteenth Amendment is Constitutional. In this conflict, if it comes, the Amendment prevails.

Any politician or citizen who claims to be a patriot knows "Real Americans and True Patriots risk their fortunes their honor and their lives. They do so freely so their country thrives." Patriots are not primarily interested in their own fortune or fame. They know being an American is serious busines and not some trivial game. True patriots well understand that "Heaven knows how to put a proper price among its goods." As Paine rightly said, "What we obtain too cheap, we esteem too lightly it is dearness only that gives everything its value." Now is a time that tries our souls; now is a time for all of U S to ask - What can we do for our country?



About the Writer

Caballero_69 is a writer for BrooWaha. For more information, visit the writer's website.
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4 comments on Patriotically Speaking

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By Caballero_69 on June 30, 2011 at 01:26 pm

Cher,

Thanks as always.

As you say, patriotism before politicking. Does that seem like too much to ask?

The premise of my column and my book is we finally keep our words. It seems reasonable to me.

When I was a kid, keeping one's word was at least preached as the sin qua non of honorable adulthood. Have we, as a nation, really become so degraded that this is no longer the case?

I fervently hope not.

As ever, I cherish your comments.

Larry

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By Caballero_69 on June 30, 2011 at 01:29 pm

Firkroy,

Thank you. I truly am not seeking to score partisan points. I may seem to some to have a partisan perspective, but I am trying to look at things from a vantage point not based on current political controversaries.

This is especially the case in this column. America is not without a rich political tradition of political philosophy. We have often ignored or even betrayed this philosophy, but we have never repudiated it.

If we can remember who and what we are supposed to be, we can revive this philosophy and its practice for the betterment of all, not just the benefit of some.

Thanks again!

Larry

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By Lex on June 30, 2011 at 09:13 pm

Hey Larry,

Longtime reader, first-time writer.

Thank you for taking a complex situation and thoroughly explaining it. I must admit, some of the workings of the government seem beyond my understanding. Thanks for breaking it down and showing the proper path we should follow.

My guess is the greatest challenge in writing this article is to explain the problem without having the article devolve into a blame-laden tirade. I feel that's a major difficulty in trying to have a real political discussion these days; people are so quick to rush to the defense of 'their team' that the real issues never get the attention they need. I will echo the thoughts of other commentors - well done listing men who were willing to make unpopular decisions for the good of the country. Unfortunately, the public is sometimes too short-sighted, and political careers suffer for making ultimately right, yet unpopular, decisions. Let us hope that our current leaders will keep that sentiment in mind this summer as they face down this awesome challenge.

Or walk out of the meeting because they're not getting their way.

My hope is this article sparks important conversations - civil, productive conversations - about our country's financial future. Thanks for giving us a solid starting point.

Lex

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By Caballero_69 on June 30, 2011 at 10:22 pm

Lex,

Thanks for the positive comments. I completely agree. If "We, the People, do what we should do, we will think and discuss and insist that those we have elected act responsibly for the betterment of all and not just the benefit of the few.

Is it too much to ask that we follow the guidelines we were given and perhaps succeed where those before us fell short. After all, they did the heavy lifting. Can't we just pitich in and move things forward?

Thanks again!

Larry

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