Monday, December 19, 2011

The Way Things Are, or The Death of a Liberal

Over the past few days, I've had some communications that have made me realize just how unaware and uninformed people are.  It's political silly season again, and people are once again throwing out sound-bite ideas as though a three word phrase, or a one-sentence idea is all we need to come back from the abyss we're staring into.  Interestingly,  the phrase or idea is always deceptively simple and appealing to people who don't want to face the complex and behemoth problems of a system gone terribly wrong.  They're all ideas parroted from TV ads or think tank talking points like 'tax the rich' or 'end foreign aid' or 'cut waste fraud and abuse.'  My one-word response:  hooey.  Believe me, I don't like where I've wound up in this little research project.   I'm pretty liberal in my thinking--I like a government that helps people, and my conclusion is oddly conservative, in the old-fashioned meaning of conservatism.  But facts don't lie, and politicians do.   So here goes:

We have gotten here--and here is a whole lot worse than where we were when I voted in my first Presidential election--through a whole bunch of Congresses (some controlled by Ds, some controlled by Rs), lots of different Presidents (some Ds, some Rs), and a lot of changing conditions (my first cell phone was the size and weight of a brick and my first computer didn't have a hard drive), so the decline is not due to who's in office, who controls Congress, or any housing/financial/whatever bubble. It's a systemic problem.

After the facts, I will offer my not terribly humble opinion about what that problem is.


48 percent of all Americans are either considered to be "low income" or are living in poverty.

Approximately 57 percent of all children in the United States are living in homes that are either considered to be "low income" or impoverished.

There are fewer payroll jobs in the United States today than there were back in 2000 , but we have added 30 million extra people to the population since then.

About  20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

In 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

The total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.

48.5% of all Americans live in a household that receives some form of government benefits. Back in 1983, that number was below 30 percent.

According to a study that was just released, CEO pay at America's biggest companies rose by 36.5% in one recent 12 month period.

The "too big to fail" banks have grown larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

Between 1979 and 2007, net income for the top 1% income earners in the U.S. grew by about 275%, while net income of the bottom 20% of earners grew by only 18%.

The six heirs of Wal-Mart founder Sam Walton have a net worth about equal to the bottom 30 percent of all Americans combined.

Right now, spending by the federal government accounts for about 24 percent of GDP. Even in 2001, it accounted for just 18 percent.

For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars. That was the third year in a row that our budget deficit has topped one trillion dollars.

Bill Gates' entire fortune would only cover the U.S. budget deficit (not the whole budget, just the shortfall) for about 15 days.

The U.S. government has now accumulated a total debt of 15 trillion dollars. This amounts to about $48,850 for every man, woman, and child in America, and a little more than $195,000 for a family of four. That's more than most people's house is worth.

If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.  But of course, we're not beginning to repay it--we're incurring more at a rate of  over $41,000 per second.

Out of a total 2011 budget of about $3.7 trillion, the U.S. spent $738 billion (almost 3/4 of a trillion)on the military, almost 19.4% of the total budget, and slightly more than half of all discretionary, non-entitlement spending. By contrast, the combined amount spent concerning natural resources, agriculture, education, and energy is less than $196 billion. Social Security and Medicare combined total about $1.24 trillion. Interest on the debt is about $251 billion, all by itself.

Notice that to eliminate the annual budget deficit (balance the budget) and pay interest on the debt, without raising taxes or affecting military spending would require complete 100% elimination of Social Security and Medicare, plus another $60 billion of cuts in discretionary spending.   Or, you could cut around 88% of all non-military spending except interest on the debt, Social Security, and Medicare--that's every federal agency from the FDA to the EPA to the FBI, and all the other letters of the alphabet.  88% 



Over the last couple of decades, regular people have been taking it in the shorts. There are fewer jobs available and more people competing for them; the jobs that are available are increasingly insufficient to live on; and regular people are losing net worth (wealth).   Meanwhile, big banks, big business, and the rich are doing just great, thanks.

The reason is that the system is rigged.  The government has, for a long, long time expanded its power so that it can enact policies that benefit the high end at the expense of the low end.    When we have unending wars for 'security,' who dies?  Regular people.  Who makes a lot of money?  Big military contractors and the banks who own the Fed, who manufacture the money for the war and charge us interest on it.   When we offer tax breaks to oil companies, who pays in the form of decreased revenue?  Regular people.  Who benefits?  Oil companies with record profits and the banks who manufacture the money for the deficit spending and charge us interest to use the fruits of our own labor.

When we set up regulatory systems, regular people pay for them, both with their tax money to run the agency, and then with higher prices as big companies raise prices and blame it on increased regulation (e.g., the healthcare law has resulted in huge increases in health insurance premiums, and hasn't even gone into effect yet).  Then companies use some of  their increased profits to pay the regulators to look the other way as they screw the regular people  (did the massive regulatory system stop BP from using a broken blowout preventer?)  So basically, with regulation, we pay the government to help business screw us.

Even entitlement spending that is "for" regular people winds up going to the top.  When my mom and dad get their social security check, they're not putting it away getting rich--they're spending it at Walmart. When Medicare pays for their doctor visit or their prescriptions, that money goes to ensure the continued (record) profits of Big Insurance, Big Healthcare, and BigPharma.  And, we still get to pay interest to the big banks who own the Fed on the money they manufactured for those benefits to be paid.

So you see, it doesn't matter whether we buy warfare or welfare, R or D.  Like a casino, the odds are fixed in favor of the house--the people at the top always win.   As I opened my thinking to not just accept partisan accounts of what's going on, but really analyzing it, I've been becoming more aware that the system--financial, business, and political--isn't working for regular people because it's been hijacked by the powerful and carefully, slowly, intricately been designed, precisely NOT to work for regular people.


We only stop digging the hole we've been making by taking big cuts in the whole budget--the military, every agency, Social Security, Medicare, the whole shebang--cuts of 40% overall would be required to eliminate the deficit. And then we'd have to figure out where to come up with $50k each to pay the debt. But between you and I and the lamppost--as long as we have the current political and financial system, that's never going to happen.

The numbers make clear we can't fix this problem by raising the retirement age, cutting waste fraud and abuse of Medicare, ending welfare or foreign aid, or by taxing the rich (much as I'd like to), or any other goofy bumper sticker solution that most of the politicians are setting forth. To try to do so makes as much sense as saying, 'well, the roof is shot, the foundation's crumbling, the plumbing doesn't work, and it's a fire hazard, but otherwise, it's a good house.' The truth is that the house is a wreck from top to bottom. To fix it, you've got to build a new house, not install new curtains.

So, basically, we have to get a new political and financial system!

We've got to stop thinking in terms of Ds or Rs. The Ds and the Rs, with very few exceptions, work for the same people, and it isn't us. 

We've got to stop thinking of and listening to how to tweak the current system. The current system is set up to do one thing: no matter where the money goes first, to make sure it ends up the same place--at the top.

We've got to stop pretending that raising taxes on the wealthy, or taking little bites out of this budget or that budget is going to change anything.  The numbers make it clear that's like spitting in the ocean.   

In short, we've got to stop clinging to the very institutions that are robbing us and the world of prosperity by systematically funnelling resources to the most powerful, the most unscrupulous and the most ruthless. 

And so, a lifelong registered independent with liberal ideals has become, in less than a year's time, pretty much a libertarian, because the ONLY way out of this mess is a convergence of the following three things:

1) to end the system of banks printing money and charging us interest on their imaginations (see my series on Money if you don't understand this statement);

2) to stop the money in politics where the big money interests pay legislators to make policy that funnels money up; and

3) to cut entire swaths out of the federal government--BIG swaths, and then let people and state and local governments have back the authority to handle more of their own affairs, where the politicians are closer to the folks where we can keep an eye on them.

Then we have to get real.  We can't bomb our way to peace.  If we could, then war would have long ago ceased.   We can't borrow our way to prosperity.  If we could, wouldn't a $15 trillion debt mean our economy was booming?  We can't control every bad thing happening in the world with laws and regulations.  If we could, wouldn't drugs, child abuse and air pollution all be gone?

We can't fix the world when our own country is horribly broken, and as long as we think we need to fix the world, it's going to stay broken. We can't grab and scratch and claw for more, damn the consequences, and then lament that others grab and scratch and claw back. And we can't turn over our lives to other people, turn up the TV and ignore it for 40 or 50 years and expect that when we tune back in, it will all be as we want it to be. 

We must begin to engage.  We must think more deeply than liberal vs. conservative, black vs. white, D vs. R, rich vs. poor.  Those distinctions, like all others, are used merely to set up false conflicts that distract us from the real issues--and always have been (see my post called The Arch).  We must see that the world is not a series of bumper stickers, but a complicated and easily imbalanced system.  We must stop thinking that big problems have easy, painless answers.    We must see ourselves as we are--as parts of progressively larger entities--communities, countries, a world.

And finally, we have to start thinking and acting on the principle that what's good for all is good for us, because ultimately, the whole world will drop to the level of the lowest, and right now, that's pretty low.

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