Tuesday, April 30, 2013

If Only it Were Just Air Traffic

Last week Congress did something truly extraordinary. They listened to the will of the American people and undid one of their narrow-minded mistakes, allowing federal funds to once again flow to air traffic controllers so that furloughs didn't delay air travel. I myself was a victim of delays caused by the sequester just over a week ago, and let me tell you, it was maddening to sit around for four hours because our politicians are vapid.

Nonetheless, the delays in air travel are now a thing of the past. Someway, somehow, our elected officials listened to the American people and fixed the problem. Granted, it was a problem they created, and it never should have happened in the first place, but let's focus on the good; they fixed it! America spoke, and politicians listened. Democracy!

If only air travel delays were the only problem our nation faced. There really isn't a silver lining here. The truth is, our politicians were so woefully shortsighted that they created a deal so bad that they weren't supposed to be able to stomach it, and then much to the nation's detriment, they stomached it. Delays at the airport were only going to be one consequence from the get go, things are probably going to get worse. What America needs is thoughtful stimulus and investment now coupled with serious cuts and changes to entitlement reforms later. What we got were delays at the airport.

The misinformation circulating about our fiscal situation is making real work nearly impossible to do. As long as we continue to live in a fantasy world where the deficit is an issue now and unemployment and recovery are not to be addressed, we will ultimately only be digging ourselves a deeper and deeper hole. Delays at the airport may be frustrating, but we're now in year five of a pitifully slow economic recovery that could and should have gained momentum years ago if only we had done what we know we must do. The frustration among Americans is no doubt reaching a boiling point, but we are shackled by lies, misinformation, and a severe allergy to facts and data.

If only our nation's problems were confined to air traffic delays, we'd be sitting pretty. Alas, air traffic delays were a self-imposed two week nuisance. Do we have what it takes to solve our real problems?

Wednesday, April 24, 2013

A Permanent Problem

America's financial crisis may be over, the recession behind us, but we're not out of the woods, and the problem that lies unaddressed before us is a staggering one - long term and persistent unemployment. Many of our countrymen are still out of jobs, and the longer that stays true the more likely it is to become permanent, to the detriment of us all.

This could have been avoided. Economies are hungry, and they feed on cash. When times are good that cash flows from the private sector, which is all well and good until the private sector tanks. Macroeconomics 101 tells us that when the private sector cannot spend the government should, but apparently Republicans were skipping class that day because they have been vehemently opposed to the idea of stimulus since day one, seeing opposition as political opportunity. Now that they've lost the election, they've doubled down on this bad idea as the only way to save face, and as a result, we have a big problem: millions of unemployed Americans.

It's easy to make a moral case for why this is problematic - of course as I've said before the current mob posing as the Republican party is both morally and intellectually bankrupt, so a moral case hardly carries any more weight with them than an intellectual one would. Jobless people have no income and therefore the basic necessities of life may be beyond their reach. Homes, food, and healthcare are expensive after all.

But aside from the moral argument, we can make a very practical financial one for why unemployment is a bad. Unless you think it is acceptable to allow people to live in squalor - they think they are entitled to food! - then you must recognize that it is more economical to invest in people proactively than to spend on them retroactively. If Republicans actually believed this rather than just pretending to, I would be one! So when people lose their jobs and we do nothing to alleviate the problem of long term unemployment we essentially create an ethical and financial burden, especially when we have the knowledge and the ability to help rectify the problem. Furthermore, the problems associated with poverty are cyclical; it is hard to break out of poverty. So we can proactively invest in job-training and infrastructure (and schools, and research and development, etc) now, or we can pay for food stamps and Medicaid and welfare later.

Failing now to address the problem of unemployment and the poverty that will follow it will result in permanent issues that will affect us years down the road, for which we will be paying years down the road. It is the moral and financially responsible thing to do to start fixing these problems now, if it isn't already too late.

Monday, April 22, 2013

We Couldn't Even Do This

It's somewhat unbelievable that some of the gun control measures in the Senate last week were not passed. That the Senate was unable to pass measures that would have required background checks for people purchasing guns online and at guns shows is especially unnerving.

The Senate couldn't find the guts to pass a common sense law that something like EVERYONE in America supports. Someway, somehow, our politics have become so polluted and convoluted, that we can't do things that are a slap in the face to obvious.

The failure of the Senate to pass the bill is all the more ironic given that the bill itself is the very crux of the argument FOR guns. The pro-gun argument, I believe, goes something like this: Law abiding citizens should be allowed to own guns in order to protect themselves and other against criminals. It therefore follows of course, that steps to make sure criminals don't obtain guns are more or less aligned with this argument. It doesn't do anything to impede the rights of "law abiding" citizens to own guns by asking them to pass a background check. Anyone who maintains that only law abiding citizens should have guns and that the need for those guns is self-defense, would willingly submit to this argument and the background check that comes with it! The failure to see this line of thinking reflects either severe cognitive dissonance or something much worse.

I've made my opinions on the gun debate abundantly clear in earlier posts, so I won't launch into another tirade about how our gun laws and our gun culture are out of control, but I do want to lament the fact that if we can't even take simple steps that almost all Americans support, and that are in fact the centerpiece of the argument FOR guns, then we are truly a society in trouble. The failure to mandate background checks for online and gun show purchases is just the latest sign in an increasingly troubling trend of our collective failure to take even the most basic and obvious steps to fix the problems our nation faces.

Perhaps as usual, the news source with the best coverage of this is "The Onion," a remarkable publication whose humor is often harrowingly accurate.

Tuesday, April 16, 2013

Time to Pay Up

I blogged about our mammothly incomprehensible tax code last week, but as Monday was tax day, and as offshore tax havens have been all the rage lately, I decided one more post on taxes was appropriate.

It's well documented that most Americans think the tax code is unfair if they even understand it at all. The tax code itself is well documented, consisting of some 73,000 pages of who-knows-what. Just check out the IRS's website and see if the word intuitive isn't the furthest thing from your mind. So rather than launching into another tirade against why this whole thing is so complicated, I'd rather spend some time reflecting on the value of taxes - pun somewhat intended.

Politically speaking, taxes are anathema to success. One generally doesn't become popular by asking people for more of their money. Republicans in particular have taken the value of low tax rates to nationally suicidal extremes, but they have profited politically so they keep pushing the limits of taxation to the extreme, and it resonates as long as we think of taxes only in terms of what is good for us. Would I like to keep more of my money? Of course! And I should keep most of my money. After all, I worked hard to earn it, and I can put it to good use.

But without my hard-earned money, the government can't do anything. Some people would say this is a good thing, but I argue that those people live in a fantasy world. The government is inefficient, politicians can be corrupt, and certainly there is need for streamlining and reform, but the government is an important driver of economic growth as well as the protector of the freedoms we hold so dear. The government's money is our money, a fact that is not lost on Americans, but which we seem to quibble with too frequently. It's easy to attack government spending in the abstract - and it's actually not very hard to find areas where we should curb spending - but many people struggle to identify where they would actually ask the government to cut back, an indication that much of government spending isn't as wasteful as it is often made out to be. In fact, all of us benefit greatly from government spending.

Even Republican worship at the altar of the Pentagon is tacit acknowledgement of the good of government spending. In fact, in the recent sequester debacle, moderate Republicans lamented the cuts to military spending both out of fidelity to the Armed Forces and because cuts in military spending would lead to job losses...imagine that...The government keeps us safe, but they also spend money that leads to private sector job growth, and not just on the military.

I would also argue, that taxes contribute at least somewhat to national unity, something that we clearly need more of, as it shouldn't take tragedies like the bombing of a marathon to unite us. If everyone chips in a little bit, we all have a stake in our society. Far from the cries of class warfare that we hear from both the left and the right, the idea that everyone pitches in what he or she can should remind us that we are in this together. That what hampers those who need most drags us all down, and that what has benefited those who have most is a product of our combined efforts to build a better society.

So it's time to pay up, and though I can only get so excited about tax day - in fact I'm not excited about it at all - I do hope that we can use today to remember the good that public expenditures can bring and to become so frustrated with the process of giving Uncle Sam our money that we force our elected officials to do something to make the process easier and more equitable.

Being Bostonian

I am from Mississippi. I live in New York. I have lived in New Hampshire, Ohio, Missouri, and Tennessee, but today I am from Boston.

Yesterday's mindless and horrible attacks remind us that regardless of our political stripes, we are one nation, indivisible, with liberty and justice for all. Those who committed this awful deed will be brought to justice, and those of us not affected will stand with Boston, and any of our countrymen, when times are hard.

Boston is in our thoughts and prayers. America stands united. We will overcome tragedy and be stronger for it.

Monday, April 8, 2013

Lumbering through Loopholes

Last night I did my taxes. I looked like a fool sifting through the various forms for my handful of investments and having Turbo Tax ask me roughly 40 questions about whether or not I received income from agricultural pursuits. What? According to Turbo Tax, I owed the federal government $67, but the state of New York owed me $138, so after I paid the Turbo Tax fees, I pretty much broke even. So for a net transfer of roughly zero dollars, I spent a few agonizing hours wondering why the whole process needed to be so downright awful. Furthermore, I'm at a complete loss to determine how Turbo Tax figured I owed or was owed strange sums like $67 and $138 respectively. Perhaps, as in the past, I will receive a check from the IRS telling me I overpaid. Maybe the guys down at the IRS don't know any better than the guys at Turbo Tax. Maybe this whole process is byzantine and ridiculous. Corporations have to employee armies of lawyers to figure out how to pay - or rather, not pay - their taxes. We're not just feeding onerous levels of federal bureaucracies, we've created an entire sector of private business around supporting that bureaucracy.

And for what? Not to make my life easier, that's for sure. I have no idea whether I'm paying "my fair share" or not. Certainly all the loopholes and layers of regulation don't exist so that GE can find a way to pay no taxes, right? Perhaps the tax code is so esoteric because we want to encourage wealthy people to stash their money elsewhere. Regardless of the reason, the current state of the American tax code is just silly, and that's coming from someone who doesn't understand it. I wonder what the people who actually know what is going on think the whole process. I wonder if there is anyone who knows what is going on...I'll say it, I'm skeptical such a person exists.

I'll be the first to admit I can't name most of the specifics that would be needed to simplify the tax code, but certainly simplification is the key word. If it takes someone with my annual salary and meager investments three hours to determine - somehow - that I owe an extra $67, surely the process can be streamlined. And no, I didn't have any income from my rental properties in 2012.

When Rick Perry wanted to be rid of all of the federal agencies he couldn't remember, this is probably the kind of thing he had in mind - if, in fact, he had anything in mind. But again, the mysteries within the tax code have spawned entire private industries as well. There is no such as a tax lawyer if there is a simple tax code. Or at least there are fewer of them. Is this why people pay $150,000 for law school, so they can become tax lawyers? This is not an effective use of anyone's money, especially not that extra $67 I owe.

I've been ranting, but not without reason. For all the useless discourse about taxing and spending coming out of our nation's capitol, reforming and streamlining the tax code would be smart way to start addressing both. I don't know if it would be easy, I can't imagine anything about the tax code is easy, but we could certainly raise revenue by getting rid of really silly thing like corn subsidies. We could also probably trim federal payroll a tiny bit by slimming down the IRS and possibly other regulatory agencies as well.

Put simply, our tax code is archaic and complex and dominated by special interest loopholes that serve no purpose except to the small handfuls of people influential and wealthy enough to lobby for them, in other words, the people who don't need them. I owed $67 more; GE paid nothing. Hold up. As long as we go along lumbering through tax loopholes, we will deny ourselves revenue and encourage irresponsible fiscal behavior. A simpler tax code could help curtail spending by streamlining the process for tax collection and giving the government a clear picture of what annual revenue intake would be. We could also make the tax code more progressive by eliminating loopholes, and probably lower overall tax rates and still raise revenue as suggested by Paul Ryan and Mitt Romney - who, of course, neglected to specify which loopholes they would close.

There are dozens, maybe hundreds of reasons to do this, each loophole representing one good reason to reform the tax code. The complexity of the system is unsustainable and purposeless. Let's find a way to make next April easier on everyone.

Friday, April 5, 2013

A Not-So-Looming Crisis

For year now, literally for four years, we have been hearing about the impending debt crisis facing America. The crisis that would send interest rates skyrocketing and bring the economy to its knees. We were baptized in the gospel of austerity despite the fact that we could see how miserably austerity was failing just across the pond; that response to the economic downturn being the very reason Europe's economy continued to sink while ours began to recover. Evidence, data, and historical fact were cast aside and ideology took its place atop the altar of American politics. Fortunately there were enough reasonable people to prevent austerity from taking hold in America, but there were and continue to be enough fools so that smart policies were never enacted.

Recently the fools have been on a little bit of a retreat, but only just a little bit of one. The rhetoric has changed slightly. Given its absence to materialize over the last four years, it would make sense to shelve the idea of the debt crisis, but no. Not unlike the rapture, the failure of the debt crisis to materialize reflects a failure of timing, not a failure of analysis, a 'we had it right all along, we just flubbed the date," kind of explanation. Just two weeks ago, good ole John Boehner, a man whose heart - I believe - is in the right place, but who has the intellect of an infant, concluded that the debt crisis is not in fact immediate, but looming. This represents a complete 180 in Boehner's thinking, but makes perfect sense given that something that has been immediate for four years but never materialized is, by definition, not immediate.

The real question, then, is whether or not this epiphany will lead the Republican party to come to some sensible conclusions about how to balance short-term spending on infrastructure and job creation with long-term curbs on entitlement spending. In fact we do need to find ways to balance smart spending cuts with revenue hikes that will neither diminish purchasing power nor stunt job creation. If there is a looming debt crisis, it is way down the road, but we need to address it now with measures that will put Americans back to work and lay the foundation for future success by helping us create a 21st century infrastructure. So are we going to get some sort of bargain on taxes and spending that will achieve these ends? Unlikely. Though the president has not unveiled his budget yet, he is already under attack, and both sides of the political spectrum deserve criticism for their criticism. Republicans are unsurprisingly unwavering in their opposition to any kind of new revenue, sticking to their misguided, outdated mantra about taxes being antithetical to economic growth. It's an intellectually trite position, but Republicans have spent too much time owning it to bother reevaluating. Democrats for their part attacked the President's plan to cut spending on entitlement programs even though such cuts are as yet unspecified and necessary for the future of the programs. The Democratic argument is also intellectually boring, but at least it's not cruel. If given the binary option of Robin Hood vs. Robin-Hood-in-Reverse, I'd choose Robin Hood, but of course neither plan is a good one; both fail to acknowledge a changing world. We should take away all of Congress's technology and force them to work with quill and ink since apparently they still live in days gone by.

If four years worth of evidence isn't enough for us to self-correct failed policy and this month's stagnant jobs report isn't evidence that we need to try something new, I don't know what it will take to force our Byzantine political machinery to begin operating properly. Americans deserve intelligent, proactive politicians, the kind who can acknowledge that when they forecast rain and it doesn't come that they should probably stop yelling for umbrellas.