The current talk on capital hill can be very hard to understand and all the double talk doesn’t make it any easier. EconTalk recently did a great podcast on this process and the situation we are facing. It does a great job at simplifying what is going on and helps us understand the situation we face. It is important to keep in mind that the President and congress as well as the financial world has seen this issue coming, yet the President and congress have not acted to resolve the issue before we were put up against the wall like this.

The talk in Washington makes it hard for citizens to understand what the government is trying to do and who is playing games. Without a better understanding can we know how to deal with our government over their lack of action? It is very important to understand the debt ceiling is a big part of this conversation, but losing our triple A credit rating (which means our treasure bonds are the most secure bonds in the world) is because our nations debt is raising so quickly and out of control. We have to get our debt under control to keep our rating. At this stage in the game, raising the debt ceiling is required so we can still barrow money while we get our debt under control.

In the podcast they do throw some numbers around that take a few minutes to get your head around. Each year the President is required to submit a budget proposal, which he did. That budget is 46 trillion dollars over 10 years, or roughly 4.6 trillion each year. Currently the government runs on about 3.5 trillion a year. The President’s budget would raise government  yearly spending about 1.1 trilling. In order to help deal with the concern over government spending the President revised his budget to, in his words, reduce government spending by 2 trillion over 10 years. That means a 200 billion reduction in his budget each year. This means yearly government spending would be 4.4 trillion. That is a reduction in government spending based on his proposal. Based on current government spending (3.5 trillion a year) it is still a 900 billion dollar spending increase (it is about a 4% cut in spending from his first proposal). 

That is where the President stands. Now as part of the budgeting process the House and Senate are suppose to pass budget proposals as well. The revised budget both the House and Senate can agree to is voted on and becomes the budget. The house created a budget proposal many call the “Ryan Plan.” What I found interesting was the fact the Senate has yet to create a proposal. This is where the frustration of the Republicans is coming from, since the Republican dominated House has created a plan, yet the Democratic dominated Senate has not. In the last few days a flurry of plans have started to show up but why did the Senate not act months ago the same time the House did? 

Keith Hennessey from Stanford University goes on in the podcast to explain why some people in congress call things a tax hike and some call it a cut. It is all about budget baseline comparison and rather you are comparing against what the tax law is or what the tax policy is. Are you comparing against the current law that they will expire in 2013 or the current policy of extension of those tax rates?

Russ and Keith in their podcast do a great job in explaining the government budget process. I recommend you listen to it. The political posturing makes it almost impossible to understand who is trying to do what. While many like to use the threat of default on our credit to invoke fear and anger towards people, it is clear we will not default on our credit obligations. This does not mean the situation is not serious. These continued threats and uncertainty is holding our economic recovery back. Lets be honest with ourselves and agree the trend in the above graph cannot keep going. Republicans can blame Obama and Democrats can blame Bush. Both presidents have contributed to this trend that is only getting worse. The government has to come up with a plan on how to stop spending money.

 

Mitch McConnell’s proposal to give away congress’s authority to raise the debt limit to the President is childish, and at a minimum borderline unconstitutional if not outright so. The founding fathers setup a divided federal government to enforce checks and balances and to slow down the process by which the government gets things done. They feared unilateral power in one branch of government. One branch of government cannot and should not delegate away their power to another branch – it is blatantly un-American according to the constitution.

The federal budget is loaded with wasteful spending. Anyone who denies this reality is simply not serious or honest. Just like every American family that has to sit down at the table and figure out where their money is going and cancel the Xbox Live subscription, or the Netflix subscription, or sell the ATVs in order to pay for the mortgage and purchase groceries when the paycheck simply doesn’t cover everything, our elected officials should be serious about doing the same. Where are the grownups willing to go through the budget and cut? Who is willing to reform or disband programs that cannot continue without jeopardizing our solvency? Yes, some people will be impacted negatively but that is the price we have to pay to get healthy again.

When it was discovered that my new born daughter was sick in a way that threatened her life and it would required a bone marrow biopsy, a liver biopsy, countless pin pricks to take blood samples, and ultimately chemotherapy to get her well we didn’t hesitate. It took 9 months of struggle but now at age 6 she has been healthy and a light in our life for over 5 years.

America is ours to lose. If we don’t demand our politicians act like adults then as the country gets sicker we have no one to blame but ourselves. Toss out the professional politicians who are blinded by their re-election fund raising and replace them with normal Americans that know how to do the hard work of fixing real problems.

 

The most armed states have the most firearm murders. Most people in the United States would think this statement to be true. A few articles I read recently seem to say other wise. As you can see in the chart to the left DC, Louisiana and Alabama lead the nation in murders by firearms. If the logic of our earlier statement was true, you would expect those same states to have the highest level of gun ownership. Washington D.C. actually ranks last with only 155 gun ownership background checks per 100k people. Louisiana is about half way up the list at #21 with 13,329 background checks per 100k residents.  The state with the highest background checks per 100k residents is Kentucky. Where does Kentucky sit in the average murders by firearm list though? Kentucky is actually below the nation average! Kentucky though is a bit of an outlier because it handles background checks differently then most others. So what is the next state on the list of background checks? Utah. Where does Utah sit in the chart of firearm deaths? 10th from the bottom, again, below the nation average. Ok, 3rd time is the charm right? How about #3 on the list, Montana? Ranks 3rd for background checks, but again it is below the nation average. So the three states which have the most people applying for gun ownership actually have firearm murder rates below the nation average. 

How does all this make sense with what we are told? Doesn’t more guns equal more gun violence? To keep this totally honest the background check numbers are a little speculative because not all states do it the same way. However, the correlation between the two charts is all over the place.  This information also does not take into account illegal gun ownership (people that don’t go through background checks). Isn’t this really the point though? If we want gun regulation to help control if not stop firearm deaths, don’t we want to see a high level of correlation between those two things?

 

House Resolution 140, the Birthright Citizenship Act of 2011, has created some interesting dialogue. The bill amends the Constitution's 14th Amendment, which states, "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." This bill would change this amendment a bit so at least one of the person’s parents must be a citizen of the country or serving in the military.

Most people in this country agree we have an immigration issue. Regardless which side of the argument you are on the amount of dialogue going on about this topic is a good thing. Bills like this and others force us to think through possible solutions to the issue.

In reading about this bill I came across an article online that concerned me. The first part of the article is well thought out and the author has a good argument. The author stumbles a little though. The author says “you'd be hard-pressed to find many aliens in the army.” Hard-pressed is of course a relative statement, but I don’t think its true. In 2009 the military started recruiting immigrates with temporary visa’s and green cards. The pentagon reports that about 29,000 people serving in the armed forces are not American citizens.

I agree this bill has issues and I cannot support it in its current state. The idea of sending a person back to a country they have never been to and may not even know the language is a concern to me. We also need to think through how the other country views the person’s citizenship since they were born out of country.

These are all great questions and conversations to have. However, the author goes on to make arguments that no longer make sense. The author makes the following statement.

“Do not tell me affirmative action is unfair because it excludes white people from college programs and then institute immigration and naturalization laws that exclude people of color from the work sector and the country.”

This statement is so loaded with unrelated and misguided statements it is hard to untangle. These statements just confuse the issue instead of helping to clarify and refine the issue. First, immigration laws are not created to exclude people of color. They are created to control the flow of people, regardless of color, between nations. Second, the concern with affirmative action is not that it excludes white people. It doesn’t. It sets different criteria for people. A white male needs a 3.9 GPA to get into a program but an American of Japanese dissent only needs a 2.8 GPA. The discussion about affirmative action is not the point here so I will stop there.

If we hope to clarify and solve these problems we must not muddy up the conversation with disconnected thoughts and arguments. We need to clarify and refine the issue and it’s problems. Only be doing this can we identify solutions for the problem. Like the author, I agree this bill has some issues, but we need to stop at the first half of the article which calls out those concerns, and refine possible solutions from there.

 

I really like history. When I was in high school I may not have said the same thing, but as I have grown older history and the lessons we can learn from it have become really interesting to me. I recently watched a show on the History Channel called “The Rise of the Third Reich.” It is important we as a people understand what the world and political system was like in Germany which allowed Hitler's Reich to rise to power.

Politics are complicated, that is one thing everyone can agree on. There are always people taking sides with arguments, normally pretty compelling arguments, on how they can solve a problem. Time Magazine’s man of the year once said ”the task of politics is not to represent just one faction. Rather the task of politics must be to overcome these divisions for a greater good.” That statement resonates with a lot of people, in a hope to overcome the endless struggle between political parties.

The quote noted above given by Time Magazine’s man of the year was actually given by Adolf Hitler! How does a man go from being Time Magazine’s man of the year to one of the most evil leaders in the history of the world? Maybe the detour in those roads is not as drastic or easy to see as we think.

Adolf Hitler started his raise to power in the wake of WWI and during the great depression that hit the world in the years leading up to WWII. Germany was hit as hard by the depression as any where else in the world. Hitler only ran for public office once. He ran for president of Germany and received 11 million votes. He lost. Within one year of losing he would be elected chancellor of Germany.

Nazi’s never captured more then 37% of a popular vote in Germany, yet they were the largest political party in Germany. Hitler gave the quote above in a speech to 20 million people after he was installed as chancellor. The speech roused so much emotion in people the Nazi party had such a huge level of membership requests it had to suspend admissions. This moment in history teaches us that words and popularity of a person or group don’t always reflect intensions for a greater good.

When Hitler gave his speech he did not control Germany, but in two weeks he would.  On February 28th, 1933 someone set fire to Germany’s parliament. To this day no one knows who started the fire. This was Hitler’s opportunity. He quickly blamed the communists ,even though there was no proof. He sold the people on a common enemy and within weeks the freedom of press, expression and public assembly were suspended. Within days thousands of communists were arrested. With the communists in jail there was no one left to stop the Nazi party. The party then voted to consolidate all power in Hitler. He had been chancellor for 52 days! Germany had more changes coming.

In 1934 Leni Reifenstahl would make the movie “Triumph of the Will” which chronicles the Nazi party’s yearly gathering in Nuremberg and Hitler as the one great leader of Germany. This rally was attended by 700,000 supporters The film was acclaimed and won awards around the world.

Meanwhile in Germany you could not speak against Hitler or the Nazi party or you would be arrested. If you were a Jew you were boycotted and eventually your  citizenship as a German was removed. It was mandatory for all youth to belong to the Hitler youth program.  If you had any type of genetic imperfection you were forcibly sterilized. Those deemed pure were encouraged to have lots of babies. Hitler was going to need them. Young girls while at Hitler youth camps where encouraged to get pregnant by the boys. Thousands came home pregnant.

One mom, who dared tell her daughter not to get pregnant, was to be turned in by her daughter and arrested. If you think a good parent can get their child to overcome or resist social pressure if they are a “good parent”, try telling this mom. While nothing can replace a parent, history has many examples of how parents need the support of the society around them.

The people in Germany gave way to the mentality that “It is better to howl with the wolves than be eaten by them.” Years later the entire world and millions of sons, daughters, moms and fathers would pay the price of removing the Nazis, or die waiting for that moment of freedom to arrive. 

It is imperative we know our history. In the words of George Santayana’s Reason for Common Sense, “Those who cannot remember the past are condemned to repeat it.”