The impossible turns out to have been possible
Some people told us that the dreams of environmentalists and conservationists (two separate groups, by the way) were insane: that Americans could slash their energy dependence, move to smaller cars, and drive less.
Others told us that Americans were born to be spendthrifts, that we could never get our consumerist greed under control.
Both turned out to be wrong.
Our oil consumption plummeted as high gas prices pushed people to discover alternatives. Gas prices continue to fall because of falling demand. Businesses and individuals alike turned to solar power to cut their use of heating oil and electricity, to car-pooling and mass transit and simple planned routing, to smaller cars, to different driving habits, insulation and double-paned windows.
I remember people saying that a carbon tax would be a terrible thing because people would not be able to save energy, but would just be punished for using it. On the contrary, it seems that, as the free-market economists would have predicted, higher energy prices push people into losing less energy — and it’s not that hard (despite a strange article in the Detroit News, which contrasted a $12,000 Aveo, apparently standing in for all small cars, with an expensive Buick, and slammed it for not having standard power windows. “Cheap” and “small” were apparently conflated, and the buyer apparently failed to read the price sheet.)
Americans are also putting more money into their savings - pushing the country from a net personal deficit to a net personal savings in just two months. The recession has spooked a lot of people into cutting back.
The down-side has been the repercussions of weaning people off of bad habits like spending more than they have. Satellite radio is going to continue to lose money, I suspect; sales of the more expensive luxuries may fall. Perhaps cell phone companies will start to make less obsene profits off of people who are realizing that a hundred dollars a month adds up; perhaps cable TV will sell fewer fully loaded packages and more family or (gasp!) basic plans. BMW is starting to see problems; the domestics have been slammed as their high profit trucks and SUVs have begun to sell at a loss. The big problem for two of three of the domestics has also been perception - the perception that they have no high-mileage vehicles at all, though they do. For Chrysler, the perception seems to be that because they have no high-mileage vehicles, none of their other vehicles is fuel efficient. That runs counter to the facts, but since when have facts mattered?
I personally hope both these trends continue. I’d like to see us using less oil, and only partly because I don’t want to see so much money going to terrorist-supporting nations and ExxonMobil. I’d like to see us saving more and spending less as a nation, partly because of the toxic effects of our borrow-and-spend mentality and partly because it hurts so many individuals. If we all consume less, we’ll spend less on garbage dumps and such, and those who can’t afford to be spending as much can cut back without social stigma. If people have more savings, in the long run the economy will benefit by having more investment capital available; and by having fewer people needing welfare or other support.
I’m also hoping that President Obama can do what President Clinton did - reverse the trend of increasing deficits and create an operational surplus. I truly miss the days when, instead of talking about record setting deficits, economists were besides themselves wondering how the government could operate without debt, where the Social Security Administration would put its surplus, and what a post-debt economy would look like. Because that’s sure better than wondering what forms of extortion the holders of our debt are coming up with, and how we’re going to create enough wealth as a society to pay off the excess borrowing of irresponsible leaders.
Each citizen’s share of the national debt is currently $34,879. I’m very conservative, fiscally speaking. I don’t believe in national debt except in times of emergency. We’ve managed to cut our fuel use; we’ve managed to start saving money; I wonder if we have the discipline as a nation to accommodate temporary tax hikes on those who can afford to pay a bit more, and to give up some government spending, in return for paying much less in the long term. (It’s like making advance mortgage payments.) We’ll see.
The tag for the debt at $34,879 is just plain obscene. It is also scary because, even now, there doesn’t seem to be a settling of the conditions, despite what appears to be a rather short term trend in savings. I say short term, because the major players are still volatile, and show no signs of real abatement for those of us that have to figure out how to spend extremely wisely as we kibitz around the kitchen table, and our rather severely impacted household budgets.
This post was going OK, until the mention of former President W J Clinton. Granted, we believe he did good things for the economy, HOWEVER…. (always one of those, right?) he did not inherit the fragility of the current sort of situation we now face, when, whether you deny it or not, President Reagan left him with an economy that expanded, grew, and poured millions into the U S Treasury for a sustained 69 months. Unprecedented in U S history. Least we forget, Mr. Clinton promised to continue on the course while campaigning for office. That he would not seek a tax increase, but continue on in the vein of the proven track of Mr. Reagan. Remember that Mr. Reagan inherited a really rotten economy from his predecessor, Mr. Carter. It took Mr. Reagan about two years to effect his plan, after he took office, and it did work, despite the pundits labeling it “trickle down” or worse, “voo-doo” economics. It took Mr. Clinton about two MONTHS to change back to the “usual suspects” and get the LARGEST tax increase in HISTORY passed. He also managed to look the other way in allowing the Internet “dot.bombs” to go unfettered, which eventually blew up, and spun the economy out of control.
The mistake of Mr. Reagan was he sought less regulation, and DID NOT rope in deficient spending, in that unbridled capitalists used his economics to increase their own situations, instead of using it to invest in ordinary people, which is where he meant his plan to go to. He should have called them into account, and used his office to directly influence those corporate entities to either make jobs, using more of their profits to enhance workers, and make people their first priority, rather than profits. He could have, but did not. He probably didn’t want to risk the wrath of the big business members of his party. However, he would have really cemented his place, as a true “man of the people”, if he had reined in the capitalists, and not so heavily bought into the “deregulation” syndrome.
Even in the face of an obvious worsening economy, with the potential failure of American auto manufacturers looming large, some are screeching that we need a “tax increase.” No. We do not. Not now. We are observing a change in government direction, which will result in a change of policy. What we are yet to see is an actual change of government. If we, as Dave espouses, the people have found ways, (and I know I have) of conserving, changing to conditions, making do with what we have, then it is behooving, indeed, IMPERATIVE, that GOVERNMENT change to live within its means as well. I am allowing Mr. Obama time to face the economic challenges squarely, as he has promised. If he does not go through this over bloated, bureaucratic, corrupt system of bureaus, agencies, administrations, services, and management related organizations created by Federal Government, and accordingly seek to incrementally change them by trimming them, eliminating them, or cleaning them up to address more in the immediate application of fulfillment of their design in aiding people, then, he will have severely disappointed me. That does not mean, that we gouge the military, ala Mr. Clinton, to pay for other services, while the major operating bureaucracy went blithely on!
Need a good example? Check out California. The “Arnold”, the “Governator” doesn’t seem to get it. He professes to be Republican, but in actuality he is a “Bush” which means tax and spend programs which USED to be largely championed by liberal leaning Democrats. Since Mr. Bush largely has really “reached across the aisle” it has been difficult up to 2006, to tell who was who. Anyway, “Arnie” wants 4 MORE Billion dollars in NEW taxes for California. He is an item to watch…….
If Mr. Obama reverts goes to “the usual suspects” and increases taxes, despite his promise of this so called “tax cut” for 95% of (name your own price) tax payers, (which is a fraudulent premise) he will have immediately violated the trust he received from his election in that he rode in on concepts of being better to ably handle the current economic stress. A tax increase, without appropriate actions to cut the current Federal budget, by cleaning up the bureaucracy, and NOT solely gutting the military appropriations ala Mr. Clinton will, in all likely hood, will bind the wounds temporarily, but will not stave off complete collapse somewhere else down this rocky slope we are now on. It does not bode well in any event. And by no means do I hope he follows Mr. Clinton in ANY respect. OR, Mr. Reagan either, for that matter.
It’s easy to get a better economy by going into debt. That was Reagan’s true secret along with Christie Whitman’s and Tom Kean’s. They spent and spent and spent and spent. Debt doesn’t really take effect until the next president, or the one afterwards.
Clinton did not gut military appropriations willy-nilly; he shut down operations that were no longer needed, cancelled insane spending proposed by Reagan (in some cases over the objections of naval officers), etc.
At this point our taxes have stopped being progressive, if you include payroll taxes. You can pay roughly the same 30% tax as a self-employed person making sustenance wages, or as a six-figure-salary guy, including payroll tax; less, in fact, if all your money comes from capital gains (no longer so easy to do!).
I think we both agree on Reagan’s predilection for unwise deregulation. In some cases deregulation was called for, but the very idea that industry will observe “voluntary regulations” with no teeth is absurd. Ending surprise inspections and slashing inspectors made OSHA largely a waste of time (Republican Richard Nixon has been credited with being the first to fully fund OSHA.) A company I worked at had several drills for surprise inspections by OSHA and the fire inspector… which meant that in a real fire, it would have taken around five minutes to get the doors open. Without surprise inspections and strict rules, the doors could have been blocked permanently. (Which is why we HAVE surprise inspections and strict rules; before that, numerous people died unnecessarily. Though I’m sure some guy somewhere is whining about the cost of fire escapes and fire doors and how that awful fascist-socialist dictatorship is making him spend HIS OWN PERSONAL MONEY when his employees have a choice and could work elsewhere.)
Clinton did little to stop the tide of deregulation and the conversion of financial institutions to voluntary or self regulation. That famous White House meeting of 2004 saw the banks rewrite the law themselves, just as Dick Cheney led the energy industry to help rewrite the rules (and then refused to cough up records of the meetings for years).
Obama is only human and he has been faced with a crisis of, as you say, unprecedented proportions. Borrow-and-spend policies won’t work. I only hope he has someone who is willing to help make government more effective, without getting one iota of credit for it, so, like Clinton, he can clash spending without many ill effects.
A real part of a “clean up” would be to “deregulate” the IRS in its entirety! The system in place is total insanity, and NO ONE understands all of it. Impossible. Country needs to go to a flat tax system or the fair tax plan, but something needs to be done to take the confiscation of wealth through police powers of the government, and put it back in the sort of mentality that while you may not like taxes, at least you understand why you are paying them. AND IT IS FAIR for all.
Nixon was a sort of “frustrated” cop IMHO. He really liked cops. He had the guts to challenge J. Edgar Hoover, and was about the first President that sought Hoover removal, after way too many years in office at the FBI. His LEAP program was back then, and continues to this day, as one of the largest assistance to line cops that ever came down the pike. That should more point to the true meaning of this government, in making assistance readily available without a huge monolith of bureaucracy that makes you “prove” your eligibility, along with tons of needless documentation to get through.
OSHA has its place. A good one. My particular goal, when we had our business (s) all up and running, was to always try to EXCEED expectations of OSHA, the State Fire Marshal, police and local fire agencies. I would not hesitate to put a call in to get someone out to take a look. It certainly went a long way, and I never complained about an issue that was pointed out. Just corrected it, and ALL were minor. I believe it is a duty that we have to do.
Not gonna happen.com
The only reason we had surplus in the 90’s was because the Whithouse and the Congress belonged to two differnt parties. Until the election of ‘94 the Clinton Whitehouse predicted and planned for deficits for as far as the eye could see. They also benefited from an expanding economy. None of this describes our current situation. The Dems in congress want to spend, spend, spend. The new President will quickly forget his promise to lower taxes on “95%” of Americans (the AP just recently released a “poll” that said a majority of Americans would forego their promised tax cut to “help” the government do something for the economy - how convenient). He will raise taxes on those making more than 250k (early in the campaign)/ 200k (later in the campaign)/ 150k (Joe Biden late in the campaign). He will want to regulate, perhaps reasonably, but the Congress will take it too far, swinging the pendulum too much in the other direction. Add to that the rediculous bailout bill and the STILL ongoing earmarks (the big ‘O’ had a billion dollars of them himself in his short time in the Senate) and a balanced budget (forget a surplus) will become ancient history as time marches on. Be very watchful of plans to convert private 401k’s, IRA’s, and pension plans to some form of government backed plan to shore up the deficit/social security/the latest pet project/bailout/wealth redistribution. In other words for what ever the hell they want to spend on next.
Yes, that’s the line I always hear. Tax and spend Democrats. Then I look at the actual budgets and budget requests for a dose of reality.
Yes, Clinton was not deficit-oriented during the campaign. However, he sure changed his mind when he got to the White House.
Being President affects some people - turns corrupt jerks into statesmen - Nixon and LBJ come to mind with certain decisions they made. Jefferson himself acted against his own principles as president because he put the good of the nation before his own ideologies.
Four years from now one of us can tell the other, “I told you so.”
Being President WILL affect that individual. It HAS to with the shear depth of the realization of the power that has been transferred to him by the people (used to mean something anyway) along with the terrible burden of the weight of everything he says and everything he does being mulled over by the media, whether true or NOT, over and over and over.
Becoming irritated at the line “Tax and Spend Democrats” is unfortunately part of the business of politics. Do you become equally upset at the tag that Republicans are the party of “Big Business?” Or that they are seen as ALWAYS against social programs? It is part and parcel of the fallacy that one party is better than the other party, and an individual chooses to drink the kool-aid of that particular party. The bigger picture is that they truly, actually DO NOT represent the “people.” They conspire against the tax payers, make shows out of so called “debate” and continue to perpetuate government, always, ALWAYS expanding it, whether needed or not, sucking the life out of your taxes to pay for more and more of government. All of it in a conspiracy to inflict the “New World Order” upon us, and the rest of the world.
Government does NOT give one good “DAMN” about the people. Ever heard of the United States of America Office of the Comptroller of the Currency? You should, but betcha never, ever will. I say you should because yesterday they determined that Consumer Unions and (IMAGINE THIS) BANKS, Can NOT forgive debts, in particular credit card debt! Banks, claiming to be bleeding at BILLIONS of dollars a month, worked with Consumer Advocate Groups to keep people in the loop. Good Credit people, who are now having trouble meeting their obligations. By forgiving up to 40% of their card debt, the banks would be able to keep them in the “loop” still receiving some of the payments, while allowing the consumer to maintain a good, clean credit profile. If this would have been allowed, it would stave off bankruptcy for thousands of consumers, who NOW face NO OTHER possibility other than damaged credit, either though outright bankruptcy or some sort of credit counseling debt repayment plan that remains on your credit report like “almost forever!” Meaningfully….. WHAT PURPOSE does Government serve in defeating this sort of action? In this instance, who or WHAT is the government doing, and WHY? What people are served by this? According to a letter, written by the ASSISTANT Comptroller of the Currency, “the agency does not consider any plan that defers the timely recognition of loss as prudent, and any such proposal cannot be viewed favorably by us.” HUH??? And if you think that this is an exception, you need to be revived, because government is NOT, definitely NOT working for you, OTHER than hijacking your tax money. Going back to the DEREGULATION of the housing parameters tied to FANNIE MAE and FREDDIE MAC, in 1999, someone should have been SCREAMING. THIS IS WRONG. YOU ARE LYING to the PEOPLE. Oh, sure some token political resistance was raised, but hey, its good to get people in houses that can not afford them, and can NEVER afford them,………… right?
You could not write the plot to a novel better than what we are witnessing politically from GOVERNMENT right now. A change of personnel, the election of another President, the retention of the same old double dealers in Congress will not make one iota of difference because the fundamentals of this government, all gone corrupt, disenfranchising the people, across the political spectrum, HAS NOT CHANGED. And the new guys can not do a thing about it. So, I prefer not to wait until 2012. I can say it now: “I told ya so!”
Here’s what’s likely to happen:
Either
1. The painfully sweating Not-So-Big three are going to get enough to stay on life support for the next three years while shedding jobs the whole time. They will come up with a few newer wrong cars for the market (I have nothing against the Volt but I live in a Condo - no place to plug in). Things will be much as they are now.
2. The economy will self-regulate to some extent and the problems, while still there, will be less than they were.
3. The other bailout will only work to a point. Healthy businesses will thrive but the rest will fail in greater and greater numbers.
Or
1. Congress grows a few brain cells among themselves and begin to realize that the sum wealth of our nation is in the manufacturing and engineering of great products. Only though product and creation of *something* is there any true wealth and power. Software, hardware, business doing business… Just because they don’t have any new ideas in DC…
2. Congress begins to set aside dollars for real companies making real things that pay real wages in the real world rather than hoping the incentives they have given companies to leave the US go away.
3. Forget a flat tax. No taxes other than what they call VAT in the UK. If you buy, it you pay tax on it. Nobody gets away free for anything other than food, medicine, dentistry or other health-care. Spend less, pay less tax.
4. Nobody pays capitol gains on anything. Tax free until you spend it. Let’s give some incentive to keep savings in the bank or the 401K. If you pull it out and spend it you pay what everyone else pays for stuff including taxes.
I’m a Democrat from Maryland. This would work. Everybody pays. There are no loopholes. Putting loopholes in something like this just makes it like what we have now.
Bob
There’s a definite attraction to your plan, not least of which is the elimination of tax breaks that bring about waste. While it’s environmentally and socially better for society if people live in smaller houses or apartments, on smaller plots of land, we’ve been subsidizing home loans for many decades. While it’s better for society if people take mass transit or walk, we’re now talking about tax breaks for cars (and already those exist for businesses, especially those buying SUVs). Many tax breaks are very unfair to say the least; capital gains comes to mind. VAT without income tax would solve a lot of problems and eliminate a lot of bureaucracy, though the wealthiest would end up with a huge tax cut (since they can’t spend all they have). On the other hand, I could also argue that their wealth will EVENTUALLY be spent…