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I wrote earlier that this blog is not the go-to place for analysis on what last night's election results mean for defense policy, but it then occurred to me that my office is right next to that of Richard Fontaine, who until last year served as Sen. John McCain's principal advisor on defense and foreign policy issues. I walked approximately two meters from my desk and asked Rich what we should expect from the new Congress. His response:
My take on what the Republican takeover of the House means for U.S. defense policy: not a dramatic shift. Secretary Gates has pushed for real increases in the defense budget throughout the Obama years, and while he is not the sole determiner of that budget within the administration (see OMB, among others), you can expect him to work with Republicans in the House to build support for it. Some of the Republican leadership will support defense expenditures above the president’s request; incoming House Armed Services Committee chairman Buck McKeon said this morning that “one percent real growth in the base defense budget over the next five years is a net reduction for modernization efforts which are critical to protecting our nation’s homeland.” That’s not the only part of the budget story, however, as the wave of new Republicans includes a number of fiscal conservatives who will push for across the board cuts, including in defense. Look for a fight on that front, which I’d expect the Republican leadership to win. You’ll probably also see the Republicans push for full – or greater – funding of some of their key priorities, such as missile defense.
The Republican majority will support keeping U.S. troops in Afghanistan, but this can’t really be a determining factor. I’ve read news articles asserting that Republicans will “pressure” Obama not to withdraw troops. That may be, but there is no way they can force the President to keep troops in the field if he wants to withdraw them. During the debate over withdrawal from Iraq, the Democratic majority in the Congress couldn’t force President Bush to withdraw troops, which is easier to do as a legislative matter.
Finally, I’d note that there is an issue still on the table before the new Congress is seated. The National Defense Authorization Act has passed the Congress every year for more than four decades. It has run aground this year and whether it passes between now and December 31 is uncertain, to say the least.
Look for greater implications in other foreign policy spheres: trade, development assistance, etc. But not for great drama on the defense front.
Rich made me promise that I would not use "No Drama, Obama" as the title of this post. Too obvious, he felt.
Update: Rep. McKeon released a pretty unsurprising statement today with which I have only one big gripe. Rep. McKeon says he wants a defense budget "not weighed down by the current majority’s social agenda items." That's a pretty obvious dig at the administration's attempt to end the ban on gays in the military. But if Rep. McKeon supports the current Don't Ask Don't Tell policy, he should say so in less coded terms. Because the current policy also reflects a social agenda (in this case, a social agenda now out of step with the American people). In fact, everything about the defense budget reflects a social agenda: what kind of military we have and how we fund it says a lot about Americans as a society -- our norms, our values, our priorities.
I hope they listen to the
I hope they listen to the American people and prioritize Jobs over Int'l misadventures abroad.
Let China and India take Africa and Afghanistan (via the Shanghai-Coop).
Leave Iraq to the Iranians.
Let's concentrate on Mexico, and legalize marijuana, since that's the narco-state's cash crop.
Obama's 2012 Platform should be "Yes, We Can (Smoke Out)", and watch all the 18 yr olds vote Democrat!
I found this post
I found this post depressing.
Let's keep increasing that military budget because, you know, it just goes along with everything else we do that is asinine.
If you look at the phenomena called success, you will notice that a common trait is efficiency. Companies, systems, organisms... all the good ones increase efficiency over time.
In the case of US Defense, we continue to not meet our objectives at ever increasing costs, and everybody is fine with that.
Why do you guys do it? Why do you allow it?
A good start would be for one of you to raise your hand and point out that making war with Iran is an exceptionally stupid thing for America to do. If every house republican is for this, then of what possible good is a think tank? Shouldn't you inform them of the costs and implications, and point out that, based on comparable campaigns of the recent past and present, things will not go well?
Yeah, but the most awkward
Yeah, but the most awkward dynamic in American warfighting will reassert itself, too.
The more that the WH and Congress argue over who's the more totally awesome destroyer of terrorists and fight the political battle over credit for good defense policy, the more both will be tempted to punt/delegate responsibility for strategy and execution over to the Pentagon, and especially to the COIN-favoring crowd that's currently the sexiest in the rings. In a more perfect world that would be good thing. But at a time when our wars so basically need a political component and political engagement to be won, and when our CMR is so basically unstable, I can't help but see that all as a primrose path.
The name Petraeus will become shibboleth again.
Visitor 2:35, defense ain't
Visitor 2:35, defense ain't the reason the budget's broke.
Where do you get the idea the House Republicans want war with Iran? Who among them has said that?
This is about the mid-term
This is about the mid-term elections and changing members of committees. Repubicans will support the troops and security, but they are tired of the spending as well. The Repubicans know America can not wage a war it can not afford. It was a Republican that ended the Vietnam war and a Democrat that escalated it.
Just watched President Obama address the nation. The speech was pretty much what I expected we have heard it before from Reagan and Clinton. It is a rehash of government for as long as I can remember with different players.
Speech reminds me of what I use to tell my mother when I got caught with my hand in the cookie jar. Think we have all said the words. I would have more respect for what Obama said if he took ownership for his policy being the root of 11/2.
Obama explained 11/2 away as people being unhappy with the “outcome”. Think he is in denial, the outcome is the equal and opposite reaction to his policy action. At least he agreed that Obamacare needs health care. All Americans know Obamacare did not lower the cost of health care it only changed how people paid for health care. Nothing has been done to change the escalating costs of health care that continues to increase much faster than wages. There is as much linkage to Obamacare and 11/2 as there is to the economy and joblessness. The mid-term election was a reaction to Obama’s policy as a whole.
Obama does not want to spend the next two years discussing the last two years. This is the same guy who spent the last two years blaming all his problems on Bush’s previous four years. Getting lost in the process of governing is not an excuse, both Obama and Pelosi are professional politicians fully aware of what processes they were using to implement their policy. The last two years was more than just about the economy stupid. I think Mr. Obama is concerned about Congressional investigations.
I would believe that Obama really cared about all Americans if he had not spent the last six months in a full court press campaigning for the Democrats. America is red, white and blue; he just spent the last two years giving attention to only the blue part of the American population. Obama is America’s president and it is wrong for him to campaign for one party when he himself is not running for office. Now all of a sudden, we are all important and Obama has the blues.
Obama’s plan to move forward sounds like the same the agenda of the last two years. This is the same person that just spent the last two years painting the Republicans as the party of “NO”. After 11/2, Obama wants to listen to all the alternatives. He listened to the Republicans before; he just did not change his policy. Now he wants to take the Pelosi government into the sunlight. Why should I believe Obama?
Obama mentioned that good civil servants would not be able to govern as a result of 11/2. These civil servants can get in the unemployment line like every other American. I have a funny feeling that these servants will not be unemployed for long; their buddies will take care of them. Obama will not be saddened by their demise for long. The rest of the American unemployed will have to wait, the same as they have been waiting for the past two years.
With the Obama administration it is always “you don’t understand”, “they did not like the outcome”, ”it is about more education”, or “I need to explain it better” but never the policy. It is always the sales job.
The real question is, will the master of change, change.
Obama likes the analogy of driving a car to differentiate the “D”emocrats from the “R”epublicans. All I have to say to Obama is sometimes you have to get out of the car to see which way the car is pointing. Sometimes “R” is for forward. Direction is relative.
Here is the real story of
Here is the real story of the day....Fed QE.
http://www.reuters.com/article/idUSTRE6A12IA20101103
This is not old, but now it is real. My heating bill just jumped cause the dollar will drop.
Just in time for winter. Is it getting cold in here?
Speech reminds me of what I
Speech reminds me of what I use to tell my mother when I got caught with my hand in the cookie jar.
By "cookie jar", do you mean your little pee-pee? LOL!
Vistor....@ 4:13 maybe this
Vistor....@ 4:13
maybe this will help with the concept....
http://www.youtube.com/watch?v=Eu0fTTWGtf0
Zak - your post had nothing
Zak - your post had nothing to do with the midterms and the changing members of committees?
Politics is full of codes.
Politics is full of codes. :).....V 5:21.
It will be a while before we understand which way the winds take us or how the committees change. I am not sure the people involved have figured it out.
AM...Saw your update. Obama mentioned DADT in his press statement. It was in the Q & A. His reply was coded too. Obama implied that Gays could not serve in today's military which is not true. Any gay can serve in the military they just can not advertise it.
BTW....the court cases are not about being gay, they are about due process. Obama talked in codes there too.
http://www.martialartsplanet.
http://www.martialartsplanet.com/forums/showpost.php?p=1074356062&postco...
Those were the videos I mentioned.
DADT=On the Down Low...
DADT=On the Down Low... (Afro-American parlance="on the DL")
Visitor 3:38... To answer
Visitor 3:38... To answer your question, here is an article talking about the little-publicized house vote last July in which every republican voted in favor of a resolution that would greenlight the bombing of Iran.
The Republicans will make
The Republicans will make sure START does not get approved.
Steve
I'm terribly sorry... I
I'm terribly sorry... I forgot the link.
http://edition.presstv.ir/detail/136016.html
I have to stop sniffing so much glue.
Good discussion going on
Good discussion going on here--Gordon Adam has his analysis of the election's implications for defense and foreign affairs budgets up on The Will and the Wallet, would love to hear what you all think! http://bit.ly/d1Y5YB
Mr President, If your policy
Mr President,
If your policy had nothing to do with the firing of Democrats and booting Pelosi..........
Then why did your policy do this.
Think I heard the Republicans mention something about tax burdens a year ago, DID YOU LISTEN??? Maybe you were just to involved in the process of making law.....
Even you Mr. President consider the 1099 filings to be a burden on business, WHY THE FUCK DID YOU DO IT? HELLO!!!! That is a middle class tax increase.
"The 1099 provision in the healthcare bill appears to be too burdensome for small businesses. It just involves too much paperwork, too much filing. It's probably counterproductive," Obama said.
PS:
How many Presidents does it take to talk to the PM of India ?
.................ANSWER: Two thousand (that is how many people are going with the President on his coming trip). One to talk and 1999 to fill up FIVE STAR HOTELS.
Obama, have you heard about technology? Stuff like TWITTER?....VIDEO CONFERENCE....USE IT.
Time to cut the travel budget. Obama is America's president, he should not have spent six months campaigning for 50% of the American public.
In a interview with Diane
In a interview with Diane Sawyer.
Pelosi was talking about her career as Madam Speaker.
Pelosi's reply was, "Job well done".
............She just got 10% of Congress FIRED.......I about fell off my chair................ LOL........
PS.....Pelosi must have screwed a lot of people to get the Madam title....... good riddens.
.....................that is diversity!..........10% of America is unemployed and now about 10% of Congress is unemployed......I like that.
It has only begun....... You
It has only begun.......
You policy wonks that want your agenda funded might be interested in this...
http://www.reuters.com/news/video/story?videoId=164009160&videoChannel=5
Looks like the new WEASEL words in American politics are ECONOMY AND JOBS. The American public will not stand to be lied to. I think that the mid-terms proved that.
Obama going to India to save my US job is BULLSHIT. If he and Hillary open up the CHECK BOOK and write money out to INDIA cause PAKISTAN got some will just about light the fuse at home.......
Something to consider.....So what was Hillary doing in the Philippines?.
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10...
"The USAID hub will begin with a budget of $27.5 million specifically for climate change mitigation."
God my asshole has been fucked so many times by this administration, I don't know who is behind me anymore...
Stop the spending!!!!
"everything about the
"everything about the defense budget reflects a social agenda: what kind of military we have and how we fund it says a lot about Americans as a society -- our norms, our values, our priorities."
Oh Gawd, can't the military just kill people and break things, like it's supposed to, without being lumbered with all this crazy baggage?
I want my Military to do the
I want my Military to do the Hokey-Pokey all day long, so my tax dollars don't have to go to them.
In response to New Weasel
In response to New Weasel Word...
"The American public will not stand to be lied to" - you are kidding, right? Do you think the republicans will improve your lot, and do what is best for you? It anything, they are worse than the democrats. The republicans want to cut spending at a time that spending wants to increase. It's because of the deficit, they say. At the same time, they want to make permanent the tax breaks for the wealthiest Americans - this at a time when the top 2% own 40% of all the wealth.
Let me demonstrate a good lie to you: The Fed is embarking on $600b of qualitative easing, and they are doing it through the banks in the hope of inducing a wealth effect. The government has to pay interest on the bonds the Fed purchases.
Given that the Fed simply prints the money to purchase the bonds, woudn't it make more sense for the Fed to simply provide zero-interest loans to the government for infrastructure projects? We could get unemployment down to zero and have a shiny new infrastructure by borrowing at zero percent and spending where it is effective. Then taxes can be raised on the weathliest Americans to pay for it. If they complain, then I say fuck you! That's the price you have to pay for the privilege of being allowed to get wealthy and live in this great country.
As it stands, the $600b will go into asset bubbles because people are not borrowing, and the banks aren't lending. The money will be borrowed by hedge funds to chase bubbles. In the mean time, the American people will have to pay for all of this through the resuling higher gas and food prices brought about by inflation.
Don't direct your anger at politics. Direct it at policy.
Visitor 409. You're correct
Visitor 409.
You're correct on all accounts.
Lot of Democrats ran on mid-term platforms to stop off-shoring which was local politics. Obama is going to India to talk developing business relations. We already have business relations with India (how many American companies have their shingle up in India already, there are Billions being made and never coming to the US for the IRS to collect taxes on ). Obama is telling me to save my job and create more in America, he has to take 2000 government employees to India to stay in five star hotels. That is a joke. After an election like the mid-terms, it is a joke I can not laugh at. That is a mixture of politics and policy, Yin-Yang.
What the Fed is doing, I think is a mistake. The spending that the Obama is doing is a mistake. Obama can wave off the spending as an "emergency", but I can not respect that when he and the Speaker of the House has done nothing except to waste ( their is a list of examples in the news of the past couple years). If Obama showed some measure of austerity, I could get behind some of his ideas. The way that he has spent beyond what was needed to stimulate the economy I think is a abuse of power and priviledge of the Presidental Office. Because of the way he handles his office I have absolutely no respect for the man, I do respect the office.
Both the Democrats and the Republicans have lost their way. Both parties are hopelessly corrupt. Americans do not like the lies from either parties. They really are not lies, they are mis-leading and not completely disclosed policy details. It is how the sound bites of the policy are sold to the American public. Americans are guility of not doing due diligence. In the case of Obamacare due diligence was almost impossible, I had draft copies of the law in my hands. That was the problem, they were draft copies and the American public had no way to understand what the law ment. The Democrats kept the release of detail on a short schedule and behind closed doors. There is some truth in the Democrats telling the American public that they did not understand the law. I know from due diligence that there are no cost controls and the monkey is now on the public's back. In other words, Obama and Pelosi got the American public pregnant then told them to deal with it. The sales pitch in the law that impacts the fewest people are ment to go into action first like getting rid of pre-existing conditions. The worst of it like the 1099 IRS filing was not ment to come until after the 2012 elections during Obama's second term. That was both a mixture of politics and policy at work. I thank the Republicans for saying NO. The Democrats duped the American public badly and that was pure politics in the way they got the heath care law passed. For Obama to tell me after the mid-terms that he regreted the process in which Obamacare was passed is really an insult to all of America's intellegence. Obama is a professional politician, he knew exactly what he was doing through out the entire process. Obama could have asked that the process be changed at any time. He knew that Pelosi was there to take the heat. That is they way Obama operates, delegation of blame (Chicago politics BTW).
I am focusing on Obamacare as an example, there are more examples. In hindsight, I think Pelosi was duped by Obama. Pelosi got to be the first woman speaker of the house. That is a historical event that will be read by school children for years to come. I think that agrees with Pelosi's personality. Pelosi is also far left, health care was an easy flag for her to carry. She is up in age and that allowed any negative baggage, which the Democrats knew was coming, to not damage her career which was near an end. I do not think that Obama and Pelosi ever anticipated the electorate response in the days after the law passed. There were too many bad emotions and broken windows in district offices. Those emotions ran deep and that is what made up some of the anger at mid-terms. Obama and Pelosi did not count on losing 60 Conservative Democrat votes out of Congress. That is going to hurt the Democrats going forward cause their party just moved further away from mainstream America.
The scale of events in mid-terms are rare. It takes a lot of emotion for the electrate to behave in a unified mass. The emotions that are acitve are a combination of fear and anger directed at policy and politics.
Politics is how we change policy peacefully. I hope it stays that way America can not afford to remain split and the politics has to stop. I do not see either the Democrats or the Republican giving. If Pelosi becomes minority leader, I would take that as a symbol of inflexibility on the Democart's part. It would be a grave mistake.
Is Obama a Clinton or Reagan. He is no Reagan that is for sure, he is a wanabee. Obama has more morals than Clinton at least their have been no bimbo eruptions. Clinton is anyone's whore that is the train wreck about his personality.
Obama is a Jimmy Carter and he will play the Jimmy Carter role after his one and only term in office.
Obama has been a bitter
Obama has been a bitter disappointment to me, and you are right to point at health care.
I gave Obama the benefit over the way he coddled the banks because he was just coming onto the job, and he either had to blow up the system, or coddle the banks - or more specifically, the bondholders. The banks masterfully exploited their TBTF status and we've now locked in moral hazard.
It was over healthcare that I gave up on him and the system. He had a mandate for change, and healthcare costs are killing the nation. Someone told him that tackling the problem would be a feather in his cap, but he tried doing it without pushing back hard against entrenched interests - something that had to be done. Now the republicans want to repeal healthcare and go back to bankrupting the country.
Clinton was actually a very effective president, and he guided the country through a pretty smooth 8 years. I could give a rat's ass about his sex life. Al Gore never tried to hide between branches of the government to avoid accountability, nor did he out CIA agents, or tell giant lies to start wars that should never have been started.
Reagan was a very effective president, and, for the most part, a good man. Reagan loved the Grand Ol' Party, but he was not blinded by ideology - that's why he was good. He understood the pact with the people, and he would have been apalled with the way the neocons handled power. The neocons are dogshit on the shoes of America, and they still are given a voice in policy.
I agree with you about peaceful changes in policy. It sickens me when politicians actively promote hatred an divisiveness - when they single out groups and stereotype. The media does plenty enough of that already - the last thing we need are so-called leaders doing the same thing.
All our problems start at the intersection of money and politics, and that goes for both parties. The short term thinking by both parties is deplorable, and it's killing this nation. We can't get anything correct anymore.
"The republicans want to cut
"The republicans want to cut spending at a time that spending wants to increase."
ROFLMAO at the use of the passive voice here. "Spending wants to increase." Yeah, right, magically all by itself it wants to increase. There are no specific people who want it to increase because that redounds to their political advantage, i.e., they want to steal my money to bribe people to vote for them. Spending increases are a completely agentless and non-political event -- if you'll believe that, you'll believe anything.
That's right, spending wants
That's right, spending wants to increase. That's how the economy works. Money has to be spent. It's the velocity, stupid!
"Oh Gawd, can't the military
"Oh Gawd, can't the military just kill people and break things, like it's supposed to, without being lumbered with all this crazy baggage"!!
Exactly. I really give a fuck who's fucking who. But AM that is not our damn purpose - we're there to kill people and break things. Let someone else do the social engineering. BTW AM - you do know who originally put the Anti-Homosexual Laws on the Books, right?
PROTESTANT PROGRESSIVES. Who wanted to use government to remake society to "reflect" their OWN GODDAMN values. And yes they always had plenty of academics ready to certify that this was right, true and the will of the majority. Rather like Prohibition, World Wars I/II, the UN, our busted and bankrupt Social Security system, and for that matter the Federal Reserve. Which is making our money worthless so the Wall Street and DC latte family Mafia can keep their plush troublemaking lifestyles.
There's plenty of wasted money in Defense folks - that's because it's a government operation. That and a Congressional Goody bag.
yes we can "end the wars" by letting them run amok here - which they already are. They want their GZ Mosque - The Victory Mosque - and it's within reach. And these nasty teenagers running our government will give it to them just to be snarky.
Bring em home, we need them here. To God knows what end, but we need them here....
New Weasel word... Well
New Weasel word... Well said. At least we're not whistling past each other.
I'm not against divisiveness in general. It's a great way to spawn debate. What I don't like is when things get personal. Here in Oregon we have a legal concept called Fighting Words (maybe other places too). It's a beautiful provision. It says that if someone verbally attacks me with insulting personal language, I can pound the crap out of him. When I heard that hack trying to get elected the other by demonizing simply Vitter because of his religion, then I get visions of baseball bats on kneecaps. Or when I hear a pastor wants to burn someone's holy books over and over on every news channel, well... there's no room for debate. That's just pissing on someone, and if you piss on enough people, something bad is going to happen.
I wonder how we'd react if someone goes into a packed nightclub and just before they pull the cord, they yell "Avenge Iraq!"
Yeah, globalization... it's funny how what sounded like a bad idea years ago, proved to be a bad idea. There are easy remedies, too. I actually like the idea of using the Big Mac index as a guide to tariffs. A Chinese Big Mac is the same as one in the US. If I go there and convert my money and end up paying 70% less for a Big Mac, then something is wrong somewhere, and I only need to look at the containers of cheap crap stacked up at Long Beach to figure out what it is.
Until we're working for a bowl of rice a day, the corporations won't be happy.
If they want access to our beautiful markets, then they can make the stuff here or feel the pain of 70% tariffs.
In Greece right now, their letters to congress explode.
In France recently, the people shut down the country.
We'll wake up one of these days.
Visitor 215, The pols are a
Visitor 215,
The pols are a bigger problem than the Corporations. The Corporations are simply doing their job of making money in the anti-Business climate in the USA. And depending on the industry it's been that way for decades.
We don't make anything in the USA anymore because it's painful and cost prohibitive.
We have a predatory, looting political class that wants to make themselves our masters, and knows it needed to impoverish us first. And we've been voting them into office to do just that, all the while swallowing Marxist swill about "the Evil Corporations". And semi racist innuendo about Mexicans, Yellow Peril, and before the Chinese the bugaboo was the Japanese.
Maybe the problem in America just might be: Americans.
Why the Hell would Business stay where they'll be extorted and abused, and not move to a place that wants them, and costs less?
I don't want Chinese wages or working conditions. But we should definitely look at their tax structure - or lack thereof.
And we should look at the other reasons Company's relocate to China, or Mexico, and why Americans are so damn eager to get the Hell out of America.
We need no or low Corporate taxes, low or no capital gains, sound money (STOP PRINTING), and a reduced and stable regulatory burden. What we've had for decades is an increasing burden and cost of regulation, increasing Health Care costs (that's our Buddy the govt again) and now an hostile and uncertain political environment.
You wanna live in the land of plenty or the land of foodstamps? You can't have both.
70% tariffs, harumph. Do people realize who finances our debt.
We the voters, we the citizens and who we elect, the one third of us that are basically living off the rest, and the crap we let the pols get away with are the problem.
Vistor 2:15 & It's the
Vistor 2:15 & It's the Guvner Enough said.
If you look at margins on "China product" Americans are paying the "American made" price ! That is how WalMart changed its business in the early 90's and got to be so profitable. It is how all those WM stores were built accross America. Now Walmart is buy stores in the Asian Rim.
We took healthcare and pensions off the spreadsheet, but never lowered the prices to American consumers. Why do think corporate profits did so well until the bank crash? CEO's pay skyrocket because thier bonuses are performanced based. CEO salaries are the highest ever.
We can cost effectively manufacture in America. It is a black swan.
"We can cost effectively
"We can cost effectively manufacture in America."
Kinda missing my point. I know Americans still have plenty of know how. I am saying that it isn't just slave wages that draw businesses to China, it's tax, tort, regulatory policy that make it really attractive. Since I'm in agreement on American wages not being lowered to sustenance levels, then we do something about what we do want to control, and can control.
In other words we get change our tax and tort laws to not be so anti-business. We the voters can elect politicians who will do these things - or out they go again.
Get tax and tort parity, and you'll get trade parity.
Keep raving on about the evil corporations - to justify electing rapacious politicians who force them to leave the USA or go out of business - and the evil corporations will take their dirty money somewhere else.
[PS - Black Swan normally is used to mean a completely unexpected event that changes the game. Was that what you meant?]
Guvner, I'm going to
Guvner, I'm going to disagree with you on a few things.
Tort law is canard. The fact is, the majority of lawsuits are company on company. In the medical industry, insurance companies sue doctors 8:1 vs. private parties. Also, given that a company typically can bring to bear much greater firepower than an individual, if they still lose, then they probably deserved it. Companies will do nearly anything to deny scorching the earth or creating a mountain of dead bodies.
Taxes are another one. Besides the fact that this country had a remarkably stable and robust economy at a time when tax rates were over twice what they are now, there is also this: the sale of products from state to state is quite homogeneous, even though tax rates vary wildly. There are a great number of economic papers dealing with the relationship between taxes and the economy and the embarrassing thing is... they still don't have a definitive answer. One thing is for certain: a company's borrowing ability dwarfs taxes as a competitive factor. I'm talking about large corporations. Mom and pop can feel the pinch of taxes, but they have a fairly low tax rate - especially when you factor in all the benefits they enjoy as part of this great country.
The companies that complain the loudest about taxes and regulation are the ones who are plugged into the government and try to shape policy - the welfare corporations. Unfortunately, every time they win a round of deregulation, they end up shooting themselves and many others because they can't be trusted. A corporation's needs are different than a person's. They use a different calculus. GE spends an enormous amount of money to not pay any taxes. They have thousands of pages of tax code written just for them.
The Guvner on 6:33 PS -
The Guvner on 6:33
PS - Black Swan normally is used to mean a completely unexpected event that changes the game. Was that what you meant?]
Yes.
I don't know if people learn off-shoring in school as the only answer, but it seems we have totally wrote off the American manufaturing worker as an option. To change that mind set would be a paradigm shift for US multi-nationals ( it is funny cause a lot of foreign multi-nationals come to the US for cheap labor and profit....Toyota, Michelin, Samsung, list goes on....they do it to get access to the US market)
It is all about re-occuring costs and efficiency. There would also be a dose of national pride and an understanding of the deferred/moral costs of pushing work off shore. The concept of deferred cost means that we are screwing the heck out of some Chinese worker on wages and not following EPA regs to get our ipods and computers (do we need to buy computers every two years?). It is hard to get a consumer to accept moral cost, but there have been successes. More than anything, it would be a choice to purchase American made product because it helps Americans. If everyone suddenly decided to buy only American, their would be a lot of people in America hired. That sure would be a boost to social security.
We still have not touched on how to get the benefit out of marketing the US consumer. US market is still one of the largest in the world. With out access to the US, multinationals would not have the sales and profits. That is worth something and we give it up for free or subsidize it with taxpayer dollars. Example: US military protects the trade ships and helps India and pays interest on the $900B in bonds that China holds. Another is: US corporations are not paying taxes on profits and they are no longer providing health care to the workers they laid off so the American citizen takes up the load.
Talking head on the news from the State Department said that Globalization was important and Obama's trip to India was important because of Globalization. The reporter never aske the State Department person WHY globalization was important and if their was an alternative. I am digressing. Globalization is important, but if we are not careful we are going to hollow out America for a quick profit (which has already been done).
"...and he would have been
The lack of cognitive dissonance. It burns.
Thanks for the respectful
Thanks for the respectful disagreement, I will attempt to respectfully counter-argue --
- Manufacturing - dude I am all about putting my peeps back to work, I work in ICT sector but I grew up in the Rust Belt.
It wasn't pretty. I am saying we have to become competitive in the area of taxes and tort - torts not a canard. It's 2% of GDP. I'd take a 2% bump.
Taxes - the period you are talking about in History is also the period where all of America's competitors lay literally in ruin, and we had no competition. It's also a period where the government under Truman downsized by 2/3. And we had the Bretton Woods regime of the dollar as undisputed King -- at a stable exchange rate of 35$ dollars per ounce of Gold.
And we were also defending the entire non communist world, which gives some leverage as well.
We also had a much younger population and a larger tax base. And we didn't have such a vast and bewildering array of benefits and entitlements - and constituent groups that earn their living from them.
We need to look at the part of the world that took our jobs - you seem rather obsessed with Asia - how about Ireland?
Would 12.5% Capital gains be so bad.
Taxes and growth - and academic studies - er....uh...this merely confirms my prejudices about academics, and calling economics a "science". IMO it's augury. And they don't learn from their mistakes.
Having made those points, if the Left will give on taxes and tort I am all in favor of fair trade - that is parity and an eye for an eye.
After we pay the money back, of course. I got an idea how to do that too, if you're interested...
Oh my god, please never post
Oh my god, please never post about congressional politics again, it turned an already Fallout-esque comments section into Dante's Inferno.
It doesn't make sense to say
It doesn't make sense to say tort is 2% of GDP. It's just transfer - there's no loss to the economy.
My point about the high tax rates was that they did not change growth or prosperity. We hummed along nicely at full capacity. It's not as if the money raised through taxes disappears - every dime of it (and then some) gets plowed right back into the economy. It doesn't go to congress, and it doesn't sit in a bank account. It retires debt that was used to built infrastructure and military, etc - all contributors to the GDP.
To be specific - if companies were so sensitive to tax rates, then any state with a higher tax rate than another state would lose all its industry. Companies are not moving overseas because of tax rates - some will say that to promote lower taxes, but the cold hard fact is they move overseas to exploit cheap labor. A perfectly good Chinese worker can be purchased for 97 cents an hour. Honda just recently doubled the pay for its workers at a Chinese plant because too many were committing suicide and it began to take a toll on their image. Think about that: they doubled their pay.
Believe it or not, my friend, taxes are the glue that binds our society together. They suck, but we do like the aircraft carriers to protect us, and we like driving on smooth roads. The rich used to understand the importance of the highly-progressive tax structure. They understood the benefit of equal opportunity, and that we are only as rich as the poorest among us. They used to know that not everything works on a cost/benefit basis. We don't starve terminally ill cancer patients even though feeding them is a waste of food.
"Believe it or not, my
"Believe it or not, my friend, taxes are the glue that binds our society together.."
That's funny, I could swear the Nation began as a Tax Revolt.
I think you may well define society and and the economy as: Government.
We have a fundamental disagreement.
Companies are indeed leaving California, as they left NY State, are leaving NJ...etc. But they're staying in Texas and Arizona. Or moving there. Why?
Because the State govts in Texas and Arizona aren't Super Predators with a hatred of Business.
I want to fix the problem and reverse the trend. That's not going to happen by raising taxes on Business or "The Rich" - which means the Small Businessman filing a "S" return (self employed). Healthcare Reform's number one target.
Healthcare absolutely has to
Healthcare absolutely has to change. We are in total agreement there.
Here's something for perspective: California is running a $19b deficit. It wasn't all due to overspending... they also got clobbered during the financial crisis, going from $5b in dept to $19b from outright losses in investments, and through poor tax receipts due to the tanked economy. They resorted to some unusual methods to deal with this, and its far from over.
but...
If I were governor, I would have looked at this website, and saw that California has over 663,000 millionaires in the state. Using my calculator, I divide $19b by 663k, to get about $28,000. I would see that I can close the gap by assessing and additional 2.8% tax on only the first $1 million of all the millionaires.
The worst thing that's going to happen is they decide to move out of state in protest, but I happen to know that in this lousy economy, they will lose more than $28,000 if they try and sell their house. As a consolation for having to pay the extra money, I couldI tell them they have a tax break of 3.8% that they can take at some schedule, but I'm more inclined to send them a note of encouragement and remind them that any self-respecting millionaire should be able to make up the 2.8% hit, given the favorable loopholes and hedge funds they have access to.
I don't begrudge the rich, but they can't have all the money. They used to know this.
Problem solved, nobody loses their job and has to go on the rolls, services are not disrupted.
Or they could not run
Or they could not run deficits to begin with.....and constantly add to debt in good times....
What did they get for that debt? Nothing....it's going to the new fatcats - the public sector. Show me the infrastructure.
I've seen estimates that it would have been cheaper to give every commuter a free Beemer rather than build the LA rail system.
The wisest tax - and most just - is a flat tax. Why? Because it would be relatively predictable - unlike the Progressive income tax it wouldn't take a steep dive in receipts when the economy tanks - just when you don't need it to.
And those "rich" people who "have all the money" - if they're filing S returns than guess what? All their money (and then some) is sunk into the business. That 28K might just mean one of Richie Rich's franchise employees getting let go.
Or not getting hired.
Besides what makes you think it's just to punish success and reward the corrupt failing, bankrupt govt? Not smart either.
It doesn't fix the problem, it just gives more money to the corrupt.
It does put people on the rolls. Or the road.
And as far as services - let the public employees take a pay cut - to get in line with private sector pay and benefits.
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