No the sequester won’t be a major national disaster and that’s why no one in Washington is really sweating it. But it will be a disaster for those who lose their jobs because of it and it will probably mean some problems for the military unless someone in the Pentagon has the brains and the balls, qualities they haven’t displayed yet, to stand up on their hind legs and scrap the F-35, the $400 billion weapon system that doesn’t work now, hasn’t for the last 12 years and doesn’t profess to in the foreseeable future when it is scheduled to add another $500 billion to the tab. This is a weapon for a war we are no longer fighting, a weapon that doesn’t work now and doesn’t promise to in the future. The only people who still believe in it are Lockheed/Martin and their lobbyists.
I have seen many argue that the military cuts are out of balance with the rest of the cuts and that’s probably true but even the generals will admit that the mismanagement of the military dollar for the last fifty years has left more places to cut in the military budget than elsewhere. The main problem with the sequester is that it leaves no wiggle room for those in the know to make the proper cuts where they are most needed and will hurt the least. If we can adjust the sequester rules, however, it will give Obama a chance to whittle down the military without cutting into our real defense capabilities.
There has been a lot of finger pointing and accusations flying about over responsibility for this sequester. I think a fair estimation of the situation is that Obama, looking for a way to get the recalcitrant Right to help avoid the Fiscal Cliff, devised a vehicle so monstrous that no sane person would allow it to come into effect. It seemed like a good idea at the time but in a fit of childlike naïveté, he assumed that the Tea Party people were sane enough to see things as good and bad for the nation, not just as it applied to their own selfish goals. Turns out he was wrong, so here it is.
As time was running out the President went on the bully pulpit, raving about all the horrors of the sequester that he had created, hoping that no one would call his bluff. Of course he oversold it and now that it is a reality he doesn’t look so good trying to tell us that we will, after all, survive. Unless of course we’re one of those unlucky people who will lose their job.
The President was hoping that the nation would see the intransigence of the Right and blame them and that’s in fact, pretty much what has happened but surprisingly enough, neither the nation not the Right seem to care.
So it comes down to what we can do from here to fix our fractured fiscal policy. If we can get past posturing and grandstanding we might possibly be able to get some small group of congressmen to get together and try one of those old bipartisan deals that used to, in the far distant past, work rather well for the country.
So, approaching the problem from that point of view we find that there are really only two major obstacles to be overcome. Not enough money and too much spending. If you think that’s over simplifying it, you are dead right but those are still the problems. The Right wants to cut spending, principally what they call entitlements and the Left wants to add more taxes, principally on the rich. So how do we get together to make those two points of view converge?
The politicians on the Right claim that they have already given in on taxes, allowing Obama to raise the rates on the rich to a tune of $600 billion but they forget that before they did that Obama had already put into effect spending cuts that amounted to $1.2 trillion. So in the interest of fair-play and balance it seems that the right has to scrape up another $600 billion in taxes to match the spending cuts already in place. This makes the Right’s hair stand up on end but it and more can be added through the tax loopholes that everyone on the Right had been trumpeting when the deficit crisis was originally in the headlines.
But the Right insists that we have to cut more and they are probably correct. The place everyone points is to the entitlements and before we get into them let me debunk one statement that keeps coming up incorrectly in both sides rhetoric that drives me crazy. Social Security is not an entitlement, even under the current, incorrect definition of that word. Medicaid and Medicare are, because even though we pay something into Medicare, it is only about one third of the benefits we get from it.
Social Security is our money, not the governments, not the tax commissioners, not the banks, OURS. We have paid for every dollar that is being taken out. If there is some kind of shortage at this point it is because a succession of Presidents have acted feloniously, illegally taking money out of Social Security to pay for other programs and then have not repaid it. Right now if that money were repaid as the law states it should be, Social Security would be okay for a very long time.
So let’s get back to the problem programs, the ones that we don’t pay for and which cost us big bucks. Both Medicare and Medicaid are losing money, big time. What do we do about them? Well, if Steven Brill is to be believed we don’t have to cut, all we have to do is manage them correctly. Brill, in his brilliant and thoroughly researched article in Time explains how hospitals ands medical supplies are trying to go one up on the military industrial complex. The $90 hammer, sold to the army, has been replaced by the $35 aspirin, given to a patient in a hospital. Yeah, that’s one aspirin. You think, maybe, this situation needs a little oversight? But that’s not even the biggest problem.
When Obama passed his healthcare program, he had to give up two very important parts of it to get his well bribed, (both parties) congress, to go along. He gave up single payer and he gave up tort reform. Most congressmen are, after all, lawyers and the old clichés are still true.
According to an article in PNHP, a health industry magazine,
private insurance companies cost Medicare $34 billion bucks in 2012. Our tax dollars had to cough up all that money. I don’t have figures for what we lose by not having tort reform but no one charges more than doctors except lawyers. I think it’s fair to say that a single payer system with Tort reform would save a minimum of $50 billion in doctors mal-practice insurance, before we even got to lawyers fees or made any cuts in patient care.
Brill, in his article, explains a couple of hundred billion dollars worth of Medicare savings, again, without cutting patient care. That’s why the sequester cuts, if they can be allocated with vision instead of the way they are now laid out, won’t hurt our military at all. If there is any area of government with more waste than the healthcare system it is certainly the military.
It’s obvious that I haven’t laid out all the cuts in entitlements that must be made but I’ve just been able to touch the surface in a short blog. The area of additional taxes is much simpler. Close the loopholes, end the subsidies. If congress had the guts and were willing to forego their own personal lobbyist supplied subsidies they would get rid of all business deductions except direct costs, all subsidies, any tax break for any company that banks overseas or that sends its manufacturing facilities overseas and all foreign manufacturing tax credits.
On the personal tax side we should eliminate all personal deductions except for charity and for first time mortgages for couples that make under $250,000 per year and possibly some kind of medical deduction like the one that now exists.
Political deductions would not be considered charity because they are not really charitable. We give them to get the party we want elected. When it works, we get the opportunity to enforce our will on the rest of the country.
Most of the business taxes would affect only the already rich. Some of the personal tax changes would affect us all but that’s where balance comes in. My favorite conversation is the one with the guy sitting in $5000 seats at the political fund raising dinner who tells me about how outraged he is about the significant percentage of the people in this country that don’t pay taxes.
In the first place, they do pay taxes on just about everything except taking a crap. In the second place they don’t pay federal income taxes because their incomes are not above the poverty line and under any kind of fair system they shouldn’t have to. This is where the guy I’m teaching usually calls me a communist or a socialist and where I am forced to inform him that we are living under a socialist form of government, where someone builds the highways, establishes the power grid, educates our kids, pays for the army and generally runs the country.
I then explain that democracy is about how we live, not how we pay for it and that if he doesn’t stop letting the oligarchs pay for our politicians we won’t have any democracy left.