Sobering op-ed from Friedman

Tom Friedman had a sobering and, as usual, pretty on target op-ed on the structural problems the US is facing in the coming years.

Our political leaders are not likely to forge the "grand bargain" Friedman calls for, so who will?  Or who will demand it?  The Tea Party is a ridiculous anti-tax, conservative movement.  But it has proven that it is possible to get the country's attention with some grassroots activism.

Time for people who care about our country's future and want to really make America strong and prosperous in the 21st century to organize and demand:

- a new stimulus bill that invests in infrastructure, education, new energy technologies, and tax breaks for new businesses
- an end to the Bush tax cuts once unemployment drops below 7 or 8 percent
- a plan that will make Social Security and Medicare sustainable for the foreseeable future while preserving their support for those Americans who most need it.  That means Bill Gates and Warren Buffett may get less...

Reply to an important comment - why should the wealthy pay more?

Someone posted the following comment in response to an earlier post:

I don't think many would disagree that we should be paying taxes. The real debate (in my opinion) is not should we pay taxes but why should those who earn the most be supporting those who contribute the least. I certainly expect to "pay for what (I) get" however my question is why should others "get" what I am paying for? 

I hear this a lot and it is an important and common point of view.  I'd love to take a crack at replying...

First, I think a lot of people don't like paying taxes think they are "Taxed Enough Already" (the TEA Party people), and would like to see their taxes cut further.  Unfortunately, no one really forces them to acknowledge that we pay little in federal taxes compared to other developed nations and, because we cut taxes almost a decade ago, we end up borrowing from our kids' future earnings to finance much of what our government does.

Also, in my experience, most people who are reluctant to pay more in taxes can't come up with a credible plan for spending less so we don't have to borrow.  And most of the ones that I know have at least one or two major budget items they fervently want to protect (defense spending, Social Security, Medicare for their elderly parent, etc.).  In general, we Americans want more from the government but refuse to pay for it.  That is fiscally irresponsible and morally wrong.

Now, as to the main point in the comment, about "paying for what I get" but not wanting to have others "get" what the wealthy in America pay for, it's a fundamental question of what is fair and sensible in American tax policy.

The fundamental reason for a progressive tax system, in which those who make more pay a higher percentage of their income in taxes, is that those who earn more can afford more (the poor and middle classes spend most or all of their income on necessities - the rich have more discretionary income and can afford to pay a higher percentage of income in taxes).  In addition, the theory goes, wealthy Americans benefit more, overall, from having a government that protects us, makes sure the financial system functions well (um, that is, most of the time?), and insures a healthy level of economic competition and the rule of law.  I agree that, in general, a progressive system of taxation makes sense and is "fair" for those reasons.  So does Warren Buffett.  In fact, he has argued that our tax system offers so many loopholes and deductions for the wealthy that in many cases they pay less than middle class Americans.

But I also think it is ok to think selfishly.  The reality is that wealthy people in this country generally do better when the middle class is growing and prospering.  A healthy middle class buys more goods and services from businesses that the wealthy class owns and invests in.  So if we make sure that the middle and poor classes pay less in taxes and have more money to spend, that's good for everybody.  Just look at the 90s - the wealthy paid more in taxes than they do now, but the middle class did better and so did the overall economy - and the rich got richer!

There's one final point I'd like to make:  we are in this together as a country.  We choose to live here and participate in a social contract that tasks the government with providing for the general welfare of the country and its citizens.  That means that, sometimes, those of us who have more provide aid and support to those who have less.  It is one of our greatest traits as a people, I would argue.  We are, generally, a kind and generous people.  That's why we have had a social safety net for seven decades.  And, while it does not work perfectly and there are those who take advantage of it, in general it serves us well and I am proud that we have one.  

Thanks for the important comment and the chance to respond.

Some things should be sacred

The insane debate over the proposed Mulsim community center and mosque near - not at - Ground Zero in Manhattan is incredibly frustrating and disappointing for me.  I fully understand and, sadly, accept the current state of politics in this country, in which every issue is partisan and where politicians carefully couch their statements in response to the current winds of public opinion or the latest statements of pundits on FOX News or MSNBC.

But some things in this country should be sacred, like freedom of religion.  I know that separation of church and state can be murky, at times, but every American - especially our political leaders - should cast aside partisan agendas when it comes to our core freedoms.  If someone wants to build a mosque, or a church, or a synagogue near Ground Zero, that is their right (provided they meet whatever local zoning and building codes apply).  Period.  Politicians should not try to score political points - or capture votes - by suggesting one religious group should be treated differently than any other.

I also am disturbed by Newt Gingrich - who, in spite of his intelligence is a crass political opportunist primarily concerned with his own political future - suggesting that Islam is the equivalent of the Nazis.  So now Newt - and all too many Americans - would have us condemn all Muslims for the sins of a small number of crazy radicals.  Great.   That really is crazy.

No American who truly cares about the values millions of Americans have fought to defend should allow this line of reasoning to go unchallenged.

I know next to nothing about the group of imam behind the proposed community center and mosque.  But I do know Rabbi David Saperstein, head of the Religious Action Center of Reform Judaism and and one of the most honorable Americans I have had the pleasure of knowing and working with.  Rabbi Saperstein wrote eloquently and powerfully in support of the proposed community center/mosque.  That's just about the best endorsement you can get.

Where are the Millenials - and their parents?

There is a serious crisis looming for the Millenials (people in their teens and twenties), but most of them seem oblivious.

Our exploding federal debt and the financial woes of Social Security and Medicare (though the health care reform helped this a bit) threaten to doom my kids and others of their generation to a bleak economic future.  Left unchecked, current trends will leave them with much higher income taxes to merely pay the interest on our debt while at the same time having fewer jobs and lower wages because our country can't afford to fix/improve education and infrastructure.  Moreover, if waiting to fix Social Security and Medicare results in draconian benefit cuts down the road, our kids will have to spend more of their money taking care of us, their parents.  Yikes!  My generation is on course to be the first in over a century to leave our kids with fewer opportunities and a lower standard of living than we had.

Now, one of the problems in tackling this issue is that, right now, we actually need to spend and borrow more to make sure the fragile economic recovery takes hold.  If we don't, the deficit will soar even more as the economy tanks and tax revenues evaporate.  We need a solid economic recovery to create jobs, which will raise tax revenues and make it easier to get our fiscal house in order.

There are some Millenials who get it - like We Have POWER Now (http://wehavepowernow.org). But more need to join their cause - NOW!  And we, their parents, need to join forces, too, to force our elected leaders to have some guts and make the tough but smart choices.  It means having clear priorities and, ultimately, it means paying slightly higher taxes and, once the current economic crisis has passed,  reigning in spending so our kids won't face astronomically higher taxes for a crippled government in a stagnant economy.  It's called being the responsible adults.

Exit strategies and deadlines

As I have been working through my personal beliefs about the war in Afghanistan, it has reminded me of something Josh Muravchik said in the mid-1990s during the debate over the genocide in Bosnia.  When someone asked about what the US exit strategy might be if the US got involved militarily, Josh essentially said, "When we send troops into war, the other guys should be the ones looking for the exits!  I'm not interested in exit strategies, I'm interested in success strategies."  (Hope I did justice to Josh's quote...)

I think that's a great philosophy.  We need clear goals and a sensible plan for achieving them.  We leave when our goals have been achieved - not when an artificial deadline was passed.  I understand the rationale behind having deadlines, but they usually seem to be a counterproductive substitute for clear, achievable and observable goals and the will to achieve them.

Unless President Obama can provide those goals - and the ones we have right now do not meet those standards - we should not be wasting lives or money there.

My tipping point on Afghanistan

I guess the thing that finally led me to essentially give up on Afghanistan was the Wikileaks publication of US military documents on the war in July.  Based on what I have read about them so far, the documents don't offer much we didn't already know or suspect.  But, for me, the war in Afghanistan has really been about Pakistan for years.  Once the Taliban was routed and bin Laden escaped, I believed we needed to stabilize Afghanistan in order to help stabilize Pakistan.  I feared that if we abandoned Afghanistan - or looked like we were going to - the Pakistani government would hedge its bets by increasing its support for the Taliban.

The Wikileaks dump of Pentagon documents was a wake up call for me - the Pakistani government has continued to support the Taliban in Afghanistan and will continue to do so.  they believe we won't stay in Afghanistan forever.  In addition, they see the Taliban as a counterweight to increasing Indian influence in Afghanistan.  Obama's deadline of next summer for beginning a US withdrawal just reenforced Pakistan's conclusion that we will inevitably pack up our troops and leave.

In terms of stabilizing Pakistan, it seems that what we do now in Afghanistan will make little or no difference.  Indeed, one could make the argument that, if anything, our involvement in Afghanistan increases anti-American sentiment in Pakistan.

In the end, if what we really care about is the stability of Pakistan - and its nuclear weapons - and trying to go after Al Qaeda and extremists who seek to destabilize Pakistan's government, then we should focus on what we can reasonably do inside Pakistan and reducing tensions between Pakistan and India.

Time is up in Afghanistan

While the New York Times reported this week that Gen. Petraeus and other US military officials in Afghanistan are arguing for more time to implement their counter-insurgency strategy in Afghanistan, it seems pretty clear that it is actually time to hasten our withdrawal and scale back our goals.

When we first invaded Afghanistan in 2001, our goals were clear and sensible: Attack and destroy Al Qaeda camps, kill or capture Al Qaeda members and leaders, and remove from power the Taliban leadership that had provided Al Qaeda with a safe haven from which to operate. While we allowed Osama bin Laden and some of the Al Qaeda leadership to escape to Pakistan, we otherwise accomplished these clear and achievable goals.

After that, our goals became increasingly unclear and less achievable. According to the same NYT article this week, President Obama's goals include:

"securing Afghan population centers so that Al Qaeda could not use the country again as a launching pad for attacks on the United States, promoting good government, anticorruption and rule-of-law measures..."

Al Qaeda is now using Pakistan, Yemen, and other countries as bases of operations. Permanently preventing it from returning to Afghanistan is not necessary - Afghanistan is not indispensable to bin Laden.

I am all in favor of "good government," fighting corruption, and promoting the rule of law, but those are not clear goals that are observable and achievable. How would one know when we've achieved them? Do we keep tens of thousands of US soldiers there until we are sure we have? And should we spend billions of dollars and risk countless more US (and Afghani) lives while we ignore violence and horrors in Darfur, Congo, and elsewhere?

Moreover, we really can't afford this war anymore. Sure, if it were a battle to the death between us and bin Laden, I'd want us to sell as many Treasury bonds as we could to finance it. But I am not willing to mortgage our country's future (my daughters' futures) to pursue Obama's vague goals. It is time to invest in our future, rebuild our infrastructure, develop new energy technologies, and fix our schools. As Tom Friedman says, the nation-building we most urgently need is right here at home.

I really don't like the overdrawn Vietnam War analogies, but it is starting to feel like Obama is acting like LBJ - he knows we can't "win," but he is determined to not be the president who "loses."

Some thoughts on the federal debt...

I guess my beliefs on the federal government's debt are pretty straightforward - and, at least I'd like to believe, fairly reasonable, logical, and sound from an economics point of view:

• The government owing money is not a bad thing.  Governments need to borrow money, and at times it is the best way to pay for something, especially a short-term, unexpected expense (stimulus spending during a recession, a sudden military buildup at the stat of a war, etc.)
• In normal times - decent economic growth, low unemployment, and relative peace - the federal government should not borrow much, if any, money.  That's the time to pay down existing debt (so you have room to borrow in future crises, plus it frees up capital for private borrowing/investment) and invest in the future:  improve education, fund more research in medicine and new technologies, repair old roads and bridges and build new ones, add new infrastructure (nationwide wifi, for example), etc.
• Government debt can be a bad thing when it becomes too big a percentage of GDP (the tipping point is probably somewhere around 90 or 100% of GDP).  Just ask Japan.  It can suck up too much of the available capital, stifling private investment.  Interest rates go up, making all borrowing more expensive and suffocating economic growth.  And taxes need to be raised during what is likely a period of economic stagnation, because the government can't borrow as freely (or cheaply) and just making the interest payments becomes a huge part of the government's budget.  Other budget items need to be cut - defense, education, care for the poor and elderly - because the debt payments squeeze them out.

So what does that mean about current fiscal policy?  Well, it means Bush got it wrong - he cut taxes and borrowed heavily during "normal" times, then added to the borrowing during two wars, never raising taxes to help finance them as they dragged on endlessly.  He also added a historic unfunded entitlement - medicare prescription drug benefits for the elderly - which compounded our fiscal woes.

As for Obama, he seems to be trying to hit the mark.  Short-term additional borrowing to prevent the Great Depression II and spark a sustainable recovery.  If anything, we might need more stimulus borrowing in the short-term.  But he says he wants to start looking toward getting our fiscal house in order as soon as it is feasible - and has commissioned a bipartisan task force to come up with recommendations by December.  We'll see if that bears fruit.  He also has Defense Secretary Gates proposing cost-cutting measures to responsibly shrink the defense budget.  The devil is in the details, but that is something that has to happen.  Obama also wants to, eventually, end the Bush tax cuts for the wealthy.  That's a no-brainer.

So Obama may be on a sensible course.  But the politics of fiscal policy in the US have been crazy ever since Reagan and the GOP made paying taxes almost seem unpatriotic.  We pay less in income taxes than most, if not all, developed countries.  Most of us pay less than we did two years ago.  And many Americans pay little or no income taxes.  It's time we all grew up and acknowledged that we need to pay for what we get - not just expect to get what we pay for.  Time to pay our bills, not borrow from our children's future earnings.

An initial draft of the "vision"

While my list of issues is a bit daunting, I thought I'd take a first crack at the vision piece.  Not sure how many of the issues it will encompass, but here's a first draft.  Again, feedback/comments are welcome.

A Vision for America's 21st Century


The first priority is making sure that we have a sustainable economic recovery that includes investments in our long-term prosperity and competitiveness.  If we don't do that, we won't be able to afford to address any of the other problems.  That means additional short-term borrowing (fortunately, at close to zero percent interest!) to provide more federal spending on infrastructure repair and upgrades (roads, bridges, electrical grid) and new technology (nationwide broadband/wifi), education, and new energy (expanding the investments in last year's stimulus package).

Even before the recovery is assured, we should commit to putting our fiscal house in order, so we don't bankrupt the country and have our kids paying half their income in taxes to pay the interest on our debt.  The actual steps in this direction might have to wait until the recovery is assured, but then it means a combination of reforming Social Security and Medicare so they are sustainable for the long-term, plus raising taxes some (eliminate Bush's tax cut on wealthy and add a value-added tax; this combo might allow us to eliminate or at least reduce income taxes on those making less than 10k/year).  And we need to reduce spending - phase out subsidies for corn (and reduce obesity as an added benefit) and oil companies, end the wars in Iraq and Afghanistan, reconfigure our military (beyond what Gates has proposed) so we can address the threats of the 21st century more cost effectively, etc.  This must include reduced dependence on military and intelligence contractors.  We can neither afford to pay a premium for those services, nor can we feel comfortable financing the creation of private armies and intelligence services.

Our long-term focus then turns to:

• Fixing education so it offers a real path out of poverty and encourages creativity and innovation, not rote memorization and regurgitation.
• Reforming campaign finance and the role of the government so the focus is on government protecting us (from unsafe water, chemicals in our consumer products, food, etc.), not protecting the companies and donors.
• Creation of new private sector jobs in new energy and other 21st century technologies.
• Preparation for the long-term effects of climate change that may no longer be reversible.
• Making America the true beacon of human rights, again, by making the fight against human trafficking and for empowerment of women a global priority.
• Reforming our military and intelligences services to focus on the specific threats to America's security (loose nukes, leaders and training centers for terrorists, etc.) and joining with our NATO allies to combat mass murder and genocide (Congo, Darfur, etc.).

Well, that's a first draft.  Comments/thoughts/suggestions?

The issues...

So here is an initial list of the issues that I think are important/critical and in dire need of attention.  Part of my goal in blogging is to come up with a more focused list of priorities and some way of forging my thoughts about them into some kind of coherent vision.  I eagerly welcome comments/feedback on the list and my thinking about it as it evolves.  I started this list as part of an email exchange with a friend, who added to it.

The Issues That Concern or Scare Me Most

• Exploding federal debt
• Systemic poverty in the US
• The growing gap between the rich and everyone else; this includes the stagnation and decline of the middle class
• Dependence on fossil fuels, especially foreign oil
• Nuclear proliferation and loose nukes
• Our inefficient and costly healthcare system (we'll see how well the recent healthcare reform fixes this.  It is at least a first step...)
• Human/sex trafficking
• Campaign finance reform
• The future of the media (Fox News, decline of newspapers, etc.)
• Climate change
• Decline of infrastructure
• Water quality in US
• Water shortages worldwide
• Lack of public faith in government/politics
• Outsourcing of military and intelligence work to contractors (Blackwater, etc.)

Moving forward on the blogging...

This blog has been an afterthought for the most part.  I have other things that have been more "urgent" or important, or I just wondered whether anyone else would even be interested in what I have to say on a regular basis.

I guess from here on out my philosophy is this:  I will blog when it moves me or when it is useful to get some thoughts or reactions down in writing.  Making it "public" rather than a private journal is useful because it forces me to be a bit more thoughtful and take ait a bit more seriously, because someone might actually read it.

But I also hope to blog from time to time because my voice does matter.  Everyone's does, and I mean that. I have seen how one person can make a difference, how an "average American" can affect the course of history.  But I also believe my voice matters because I have a unique perspective as a teacher and former diplomat and activist.  And I care about some issues that are critical to our country's future and my views tend to be pretty well-informed.  So maybe, just maybe, someone will read this and it will make them think a bit more about something important.  And that's a start.

My first order of business is to try to use this space to flesh out a vision for America in the 21st century.  A modest goal, I know.  ;-)  But I have a huge number of issues I care about and that all seem "urgent," so I need a place to think through the priorities and see if I can construct an overall vision that seems to address the big ones.  We'll see if I succeed on any level.

ipadio: Steve Walker's phlog - 1st phonecast

Zakaria: How to Solve America's Debt Problem - Fareed Zakaria - Newsweek.com

Zakaria: How to Solve America's Debt Problem - Fareed Zakaria - Newsweek.com

Fareed, as always, is right. Time to start paying the bills while continuing to invest in our future.

Today's youth - 18-30 year olds, the people with the most to gain and lose in this struggle - need to speak up and demand to be heard. Here's a starting point for them to demand of our leaders:

1. Fix entitlements. Raise the age of retirement and link it to life expectancy. Tax benefits of the wealthy or have some kind of needs testing - Bill Gates shouldn't get Social Security, or he should at least pay taxes on it. Crack down on Medicare fraud (I think it's about $60 billion a year!).

2. Restore "PayGo," or "Pay As You Go," effective in the FY 2012 budget. If Congress wants to cut taxes or raise spending, it must find a tax to increase or spending to cut to offset it.

3. Abolish the Bush tax cuts on the wealthy ASAP.

4. Commit the country to energy independence from foreign oil by 2020. Invest in truly green energy and offer tax credits to businesses and homeowners who go green.

5. Eliminate agricultural subsidies that are making big agribusinesses richer and America's kids fatter. Kill the corn subsidies and you start to save lives - and make balancing the budget easier.

6. Eliminate the homeowner's tax deduction. I love it as a homeowner, but it makes no fiscal or policy sense. Phase it out over the next 5 years.

7. Phase in a Value Added Tax (VAT). While it is regressive - it hurts the poor and middle class disproportionally - it could help balance the budget and still allow for lowering income taxes on the working poor and many in the middle class. That might work out ok. Worth a closer look, at least.

A bit more on the GOP

The GOP is severely lacking in vision and leadership.  How else can you explain Sarah Palin?  What would I like to see from the GOP?  Serious solutions to our big challenges:

Job Creation - We need to get businesses hiring quickly and help foster new enterprises with new, higher paying jobs for the future.
New Energy - We need to develop new energy technologies to accomplish ALL of these goals:  reduce/eliminate dependence on foreign energy supplies; reduce carbon emissions; AND create new jobs and new intellectual property here, not in China or India.
Healthcare - We need to do all of these:  provide safe, reliable healthcare to everyone; reduce costs for large and small US companies, the US Government, and the consumer; AND make all fields of medicine more appealing as a career choice (address tort reform, for one).
Education - We need to provide a good education to all Americans (black, white, rich, middle class, poor, urban, suburban, rural, etc.) and an excellent education for as many as possible.  We need to make college more affordable and accessible to all.  We need to entice more kids to go into engineering, math, and medicine. We can't compete with China and India, or provide more and better healthcare here at home, without more kids studying math, science, medicine, engineering, etc.

At least the Democrats have some ideas about some of these challenges.  The GOP really has little to offer on few of them.  I get it.  Their leadership is weak and fractured.  The ruled the White House for 8 years and both the WH and Congress for 6 of those years and really screwed things up while allowing the problems to fester.  So they need to reinvent themselves.  But they need to do so quickly.  There are some core Republican principles they could rely upon to craft a new vision, including:

Fiscal responsibility - this may be tough given the need to spend more money on these challenges, but the GOP could lead the way on eliminating real waste, setting priorities, and reforming Medicare and Social Security  not by privatizing them but by embracing higher taxes for them in return for reduced benefits for the wealthiest recipients.
Individual empowerment - Rather than seeking more tax cuts for the wealthy, how about being creative about using the tax code to encourage private investment in solving the above-mentioned challenges?
American competitiveness - An honest appraisal of what it would take to make America more competitive in the 21st Century would inevitably lead the GOP to focus its efforts - and the hearts and minds of Americans - on these challenges.

Some things that concern me...

Just a list of some things that are bothering me lately.  No particular order:

• Obama's failure to present a clear vision to the American people and to get the word out about what he has already accomplished and why.  He is gifted in so many ways as a communicator.  But he and his staff suck at this.  How hard would it be in this day and age to get people to buy into:  "New Jobs, New Energy, and New Schools"?   Link healthcare to jobs.  Tell people we need new energy for new jobs and to stop fighting wars in the Middle East.  Then get a new Education Secretary and offer real education reforms.  Change the way schools are funded and encourage ad reward new teaching methods, not standardized tests.
• The privatization of the US military.  We have as many contractors in Iraq and Afghanistan as we have GIs.  The contractors operate without direct congressional oversight or civilian chain of command - and often without being held accountable under local or US laws.  This allows the USG to carry out wars with no clear goals and weak public support.  We need a draft for national service.  Pick 2 years in military or 4 years of either Peace Corps or AmericaCorps.
• Cyberterrorism.
• Exploding federal debt at a time when we need to spend more money to rescue the economy, create jobs, and invest in our crumbling infrastructure, education, and new technologies (energy, especially).
• The lack of a loyal opposition party with real ideas.  The GOP is a joke, and we are all paying for it.
• The Democrats' lack of strong leaders.  
• Our ignorance of the impact of chemicals in our water and homes.  Are we poisoning ourselves and our kids?

Initially, I was not so discouraged by Scott Brown's victory in the MA Senate special election this week.  I figured Obama would get the House to pass the Senate's version of health care reform - a flawed bill, for sure, but far better than nothing.  The President would sign it in the coming weeks and attention could turn to financial reform and jobs creation.

Instead, the President and House Speaker Pelosi are indicating that the House will not pass the Senate version.  Obama is talking about a more modest bill, which would probably have to be quite limited in its scope and impact to pass the Senate.  But Senate Majority Leader Reid seems to be more interested in jobs legislation than more battles on health care.

This is starting to feel like deja vu.

I had hoped we'd see a little fight from Obama.