Sadly, we have seen the evolution (devolution) of the discussion of the nation's finances to a battle over government debt. And, with a passable imitation to two-year olds screaming "no" when faced with a healthy dinner option (in this case, a mix of revenue enhancements (mainly through reduced tax expenditures) and reasoned program cuts), the Republican Party (and its Tea-Hadist wing) have driven the nation toward the brink of one of the most profoundly flawed decisions ever in the national politics (yes, ever) that will create an illusion of reducing the debt on the future while, in fact, it fosters conditions that will worsen -- across essentially all fabric of society and the economy -- the debt burden that we are creating for ourselves and others into the indefinite future.
We have, in America and elsewhere, been living off our capital and borrowing off tomorrow (both near and long term) for too long. And, the costs are coming home to roost -- and this agreement will only worsen these debts.
When it comes to the situation, today, the 'tea-hadists' have it right to focus the discussion about the future and the burdens we are creating for tomorrow. Sadly, however, their rhetoric doesn't confront the reality of the debts we are creating through our spendthrift habits.
We are living off our capital: our air, our water, our natural resources, our past infrastructure (schools, roads, rail, sanitation) investments, and, yes, even our fundamental fiscal credit worthiness.
This "deal" will exacerbate all of these. The government needs to present the world a rational budget and budgetary process. The national economy needs stimulus, not budgetary cuts. And, we need to stop eating up our capital -- of all types.
Reality-based policies can do all of this and more.
See after the fold for just a few of the items that a rational policy world would be discussing and embracing that are simply not on the table in 'polite company' of Washington, DC, bipartisanship compromise uber alles world.
We should look for Win-Win-Win policies that help put the nation on a more solid fiscal footing (WIN) while improving lives today (WIN) and creating a path toward a more secure tomorrow (WIN).
(see W6: Win to the Sixth for a longer explanation)
Here are just three specific policy options that, between them, could provide greater deficit reduction that proposed by Senator Reid while strengthening American society rather than undermining it.
Simply put, America has the best emergency medical care system in the developed world while having -- essentially -- the worst preventive care system. Responding to disasters, that emergency care, is more expensive than working to prevent them. And, it is hard to 'manage' that disaster relief especially in an environment that puts profits above people. A simple truth: America overpays for an under-performing health "care" system.
Nation after nation -- from France to Australia to ... -- have variations on single-payer medical care systems and are delivering universal care with better results at a lower total cost to the economy.
Want to improve America's debt situation and American economic competitiveness and improve Americans' lives? Move, ASAP, to a single-payer medical care system.
What have we just delivered? Over $1 trillion in reduced costs to the economy within the decade (and likely even more than that) while improving international economic competitiveness, strengthening the social infrastructure, and making our lives (MUCH) better.
Decriminalize (and tax) marijuana
Face facts: the biggest winners of the decades-long "bipartisan" "Drug War"? The international drug rings and America's (privately-owned/operated) prison system. The losers: the economy, the stability of too many nations (especially to America's south), the destruction of too many local communities, and havoc in the lives of millions of Americans.
Estimates of the Federal revenue from taxing marijuana like cigarettes are range from $2.5 to $50 billion a year with an additional $3 to $50 billion a year in estimated reduced government expenditures. Here is an estimate of about $50 billion a year in Federal budget improvement. Over a decade: $500 billion cut from the deficit.
This stove-piped analysis leaves out of the equation the millions of Americans whose sole 'felony' criminal activity is marijuana use (including involvement in the buying and selling of illegal substances). How many Americans have criminal records and are unable to find suitable work (e.g,. are un- or under-employed) at what cost to the general economy (and the Federal tax base)? (Let's take an arbitrary number of 2.5 million Americans who lose, for a variety of reasons, $20,000 off their contribution to the American economy each year due to this: that is $50 billion in economic activity lost with, at a 20% tax rate, $10 billion in lost federal revenue.)
It also leaves out of the equation that this would cut off major revenue streams for illegal activities around the country and the globe. And, it doesn't consider the economic enhancement of spending $50 billion (and more) per year on things more productive than 'black helicopters' overflying people's homes and locking up people who really are no threat to others (and likely not even themselves).
What have we just delivered? A situation where $500 billion in budget assistance likely understates the real value of the equation and we have funding for drug treatment programs (within that efficient single-payer health care system) and we have a huge number of our fellow Americans (e.g., US Citizens) restored to full citizenship rights as we depopulate the prison system and we have a basis for helping contain drug violence in America (e.g., this hemisphere).
NOTE: This is an arena where libertarian and progressive are united and one would think (with the exception of 'taxing' marijuana) even many Tea-Hadists could be on board.
Charge people for damaging others
Imagine a "Damage Fee". Your actions, otherwise legal and undertaken for decent reasons, helps cause your neighbor's cancer or is a contributing factor in your high school football star's dropping out due to acute asthma.
If you water your lawn and, well, forget to turn off the hose when you take a nap and it floods your neighbor's yard and causes damage, we have many remedies to this: from polite neighborly discussion, to insurance, to lawsuits. The idea that you have responsibility for the damage your actions cause, even inadvertently, seems rather basic to a functioning society ... no?
Well, every time that we turn the key in the ignition of an internal combustion engine (e.g., your car), we turn off a big-screen TV powered by coal electricity, or buy plastic wrapped organic kiwis flown in from New Zealand, we are causing such damage to our neighbor's health and future prospects.
Yet ... yet ... this damage are simply "externalities" that aren't part of the equation. Sort of like the cigarette smoker who smoked 10 brands and strives to sue just one company, it isn't possible to link my car's exhaust pipe to your cancer even though it is quite clear that there is a correlation with cancer and fossil-fuel pollution (see how high cancer rates are, for example, near major highways compare to areas with 'cleaner' air). It is rather hard to show a legally binding causal linkage between the pollution from airline flight for a safari vacation in Kenya to the baby starving to death in the Horn of Africa amid a Climate Disruption heightened drought.
The linkages exist, in the aggregate rather than specific, between our (every single person who can read this is part of that our -- how do you think the server farms are powered?) use (and abuse) of fossil fuels and damage caused to others. Yet, those linkages remain outside (the American) the costs directly associated with using these fuels. They are "externalities" that we all pay for and cause others to pay for, but not in the use of these fuels but through other means.
Thus, a gradually increasing "Damage Fee" should be introduced on polluting energy uses. This Damage Fee would (a) raise revenue while (b) helping motivate governments, businesses, communities, individuals to move off polluting energy options and (c) thus reduce the costs over time.
Let us use Greenhouse Gas (GHG) emissions as the surrogate for all this pollution and all these costs. Quite roughly, the US emits 5.5 billion tons of GHGs per year. A reasonable Social Cost of Carbon puts the real costs into the range of $80 per ton (and more recent work suggests that this grossly underestimates the real costs). $80 per ton as a "Damage Fee" against 5.5 billion tons and we are at $440 billion, per year. Honestly, this is too strong a shock to the system, too quickly.
Let's start at $15 per ton (about one-fifth the actual costs) and increase this rate by 5 per cent per year. That would mean revenue of about $80 billion in the first year. With $40 billion (that will go up five percent per year) in a "lock box" to develop and help people (government, businesses, individuals) pay for reducing their carbon emissions and assuming that pollution loads would fall, this would mean at least $400 billion in Federal "Damage Fee" revenue that could be use to lower the deficit.
What have we just delivered? A situation where $400 billion in budget assistance likely understates the real value of the equation as we have funding for clean energy programs that will boost economic performance, improve international competitiveness (if, for no other reason, only through cutting oil imports), improve health (and lower the costs of that single-payer system) due to lower pollution, and help address the most serious way in which creating a burden on (today's and) future generations: Climate Disruption.
How have we done?
Take these three and we are above $2 trillion in improvement to the Federal budget situation -- even without considering the potential that the systems-of-systems benefits of these would have even greater value for the economy and Federal budget than stove-piped analysis suggests.
And, we have created a whole range of those systems-of-systems benefits that would improve individual's lives, create a stronger social fabric, improve our health, increase our international economic competitiveness, and ... AND would all function to lower the debts that we are creating for future generations.
REMINDER TO MYSELF: Reality Based Policy concepts simply do not, it seems, have a place in polite company ...