Letter 2 America for March 5, 2013

Dear America,

It's all Harry Reid's fault...the sequester and the budget impasse, I mean.  If he had had the integrity and the political moxie to end the practice of filibustering in The Senate when he had the chance at the beginning of the current session of congress, The Senate would have passed an alternative to the sequester by a vote of 51 to 49 last Thursday, and John Boehner and the Republican House of Representatives would have been stuck either refusing to avert the possible fiscal disaster that sequester is purported by many to be, or they would have had to pass it, thus averting the sequester cuts in favor of a more moderate and rational approach to deficit reduction.  It's that simple.  Harry Reid is to blame for the effectuation of the sequester.  But as time passes, the true consequence of the sequester becomes more and more debatable.  It has nothing to do with the clever figures being tossed about by both sides: it is only a 2½% reduction in a federal budget in excess of $3 trillion; it is more dire than it seems because it constitutes only an $85 billion cut, that cut will occur over the course of only seven months.  But in opposition to those dire characterizations of sequester there is this: we won't feel the effects right away, but they will come; we will lose 750,000 new jobs, but the GDP will shrink by only half a percent.  So what will happen in consequence of the sequester, and is it really such a bad thing.

My opinion has been expressed on more than one occasion...for what my opinion is worth.  The sequester is the only way to effect significant bipartisan budget cuts, and they will all be able to claim that it was the other guy.  That was the miscalculation of the Gramm-Rudman-Hollings (GRH) congress and president, Ronald Reagan.  They thought that these gross cuts would be so unpalatable to so many that they would never occur, and that has been the case.  Congress and whatever president was in office when it came up have found ways to wheedle agreement out of one another when GRH was triggered, and nothing has been done about the failure of the federal government to balance its budget...even to the length of not passing a budget for the past four years.  Convenient fictions have emerged over and over again to mask that failure, but the gross cuts mandated by GRH have never occurred...until now.  Finally, the congress has been inadvertently hoist by its own petard.  By the way, Shakespeare's "petard" wasn't a pair of suspenders; it was a bomb, and being hoist by one was being blown up, which seems a fair analogy to what our politicians say has happened with the sequester.  In other words, the sequester is what I refer to as the BBB--bipartisan balanced budget--Act.  Coupled with the recent tax increases on the top 1% of incomes, the federal government has been coerced into reducing the impending deficits of the next decade by $2.5 trillion...about one quarter of where we were headed before all this wrangling began, and in my opinion, thee was no other way to get there.  Further, it will be just as painful to go the rest of the way.  Just ask Bill Clinton, the president whose budgets were balanced.  In fact, the reason for that balance was in the main that the Bush tax cuts hadn't been passed, and in fact, some of the Reagan tax cuts were reversed.  But here's a way in which we can do it without all the sturm und drang--tax capital gains at the same rate as we tax earned income...or more.

That's right, risk shrinkage of the economy as measured by GDP and job creation by increasing taxes on the only people who have income that they didn't earn, and only on that unearned income.  Let everyone else alone and just make those with big money in the bank pay taxes on the income that money earns as if the owners of that capital had earned it.  Remember, before Ronald Reagan, that's the way it was; income was income and it was taxed on the basis of how much of it you had.  And how can that be done?  It's easy.  Change the rules in The Senate so that a bill enacting such a tax increase cannot be filibustered to death.  In other words, fire Harry Reid.  That's how I propose to solve all of our national budget problems.  Fire Harry Reid and replace him with someone who has the courage of his convictions and believes they will carry the day on a democratic basis...by garnering the majority of the votes of The People as represented by their surrogates in congress.  That's the only way that we will manage to finally quash this myth that you have to induce the rich to make more money by giving them a tax break when they do so.  I've said it before and I say it now.  You will never see a rich person refuse to make $.65 because he isn't being given an additional $.15 in tax breaks.  The rich love their money, and what's more, they love yours too, and they will do anything to get their hands on some of it.  That means that no matter how little they get for investing, they will invest.  It doesn't take any kind of leap of faith to believe that.  In fact, it is counterintuitive to believe otherwise.  If there's one thing we can always depend on, it's greed.  Actually there are two things we can count on.  The other is that Harry Reid will never have the guts to do the right thing.

Your friend,

Mike