Mar. 1, 2016

unintended consequences

As an independent, I often rail about the shortcomings of both of our major political parties, even suggesting we start a new party, the "DIRT" party (what better name for a grassroots organization!) made up of disenchanted Democrats, Independents, Republicans, Tea Partiers. I've heard the arguments from "economists" regarding what plans will work in America, but a little digging shows that those economists lean right or left and their numbers reflect that!  No one has really addressed our $19 Trillion debt that is being fueled by many of the misguided social policies promoted by both parties. We all seem to forget that our social security system was established when the longevity of recipients was expected to be no more than 67 years of age. Does the system need revision? Logical thinking says yes. Welfare for the unemployed was designed to be a short-term, helping hand. A big heart is admirable, but un-intended consequences are producing generations of those who have become dependent on big governement.

Increased taxing of the top 1% seems to be a popular option, and one that within reason, may have merit. However, if this group of 3 million individuals each paid the top rate in Sweden (since Scandinavian tax rates are often mentioned) of 60%, that would raise about $1 Trillion, or about 5% of our debt! Even that is a stretch as much of the wealth is on paper with assets tied up in real property (that someone had to produce or build...which provided jobs), or real estate that generates other taxes. In reality, that "top 1%" doesn't make multi-millions in annual income unless you happen to be a sports or entertainment star (wonder why so few complain of their income) or a CEO (many complain of their income!). These number less than 10% of that 1%. Wealthy people seldom get wealthy without smart advice on taxes and investments, something that also generates jobs. Remember too, that tax dollars taken in are further reduced in real value to the public by bureaucratic red tape, waste, and fraud, the same dilemma that has infected our military for many years. No matter how altruistic the intentions, human nature dictates waste and fraud when using other people's money whether by a well-meaning social democracy, or the worst of dictatorships.

Free college sounds good but unintended consequences are the number of teenagers that would look at it as another 4-6 year 'free ride' for partying and staying under the parental umbrella, instead of facing the reality of the real world. Why not improve our already free high schools with vocational programs that would provide trained workers for the 80% of available jobs that don't require a college education? Plumbers in New York can make $200,000/yr ! Our country has been led to believe that the only road to success is a college education, this in spite of the fact that so many youngsters are not inclined to gain knowledge from books. One needs to realize that it is in the best interests of the college (and University profits) to promote the 'must have a degree' way of thinking. I doubt any college professors will be willing to take a cut in salary to help pay for 'free" educations once the 'tax the rich' plan fails. We need to rethink our education system, but another debt inducing program is not the way.

Universal healthcare is another hot topic, yet that is exactly how the military and VA hospitals operate and anyone familiar with them (I worked in one) knows the shortcomings of those bureacratic quagmires. I always say if you like the VA system, you'll love universal healthcare. There are ways to reduce the strain on our system AND provide indigent healthcare, something I have previously outlined in detail in another blog.

All of the above topics are frequently tied into what is done in Scandanavian countries. In order to consider this, one needs to understand the differences between a country of 8-10 million people with very specific major industries like forestry or chemical goods, and a country of 300 million people that is very diverse economically. The differences between subsistence gardens and the mass production of corn and wheat alone requires different ideologies to work efficiently. One needs to look no further than Zimbabwe to understand that. These differences make it much more difficult to promote a "one size fits all" tax system, healthcare system, or education system. If all things become equal, the incentive for innovation is lost to all but the most altruistic of individuals. Unfortunately, our world does not seem to be producing very many Albert Schweitzers. I can't think of a single, recent, advance for mankind that originated in a Scandanvian country. There may be something other than dynamite invented centuries ago, but none comes to mind and ABBA doesn't really count. Does one really think that middle class America would ever agree to a straight, graduated flat tax of 45%-70% where EVERYONE must pay into the system? The days of the government saying "trust me, I know how to spend your money" seem to be gone. Unless you pay no tax and are on the government payroll in some way, trust doesn't seem to be a popular word among most of the working class.

Immigration questions now seem to revolve around building a wall. Certainly the issues surrounding immigration and security have evolved dramatically in the last 15 years, but any solution must be realistic from a financial as well as physical standpoint.  With a $19 trillion debt hanging over our heads, building a wall AND deporting 11 million illegal immigrants is just not realistic or financially responsible. The laws for many of those immigrants were broken decades ago and all of us are to blame for participating in the cheap labor market, getting workers to do the jobs others refused or felt were beneath their dignity. Now we want to punish something we quietly promoted by our silence. Realistically there will have to be a path to legal residency, taxpaying, and benefit receipt without any short-term path to citizenship. Those things will not be realistically possible without secure borders from this time forward.

Rarely do we hear any candidate really address these issues in a way that provides answers on how any fixes can be economically implemented. Saying you are going to do something doesn't mean it is financially possible, much less that it could pass through a divided congress, a congress of the diversity we all demand. No candidate has even discussed term limits, something that must happen if there is EVER to be a real change.

It is time for all Americans to realize that they should vote for individuals that promote reasonable and responsible policies, not those with emotionally charged ideas. Unfortunately, as Mark Twain once said, "It is easier to fool people than to convince them that they have been fooled". We may be at the point where the words of Iain King are the norm for candidates, "Deceive only if you can change behaviour in a way worth more than the trust you would lose, were the deception discovered". Most candidates seem to hope they won't be discovered while voters accept deception to avoid researching on their own.