Tag Archives: sequester

A Virus Could Ask Better Questions?

TV Set 1 I get the part wherein cable news needs ratings to sell advertising, although exactly how much revenue can be accumulated from purveyors of unregulated supplements, interesting but not likely remunerative litigation, and vehicle insurance is beyond me.  So, the coverage of the ebola outbreak in western Africa isn’t surprising – it’s the Lost Airplane of the Day.  What is alarming is the lack of substance, and I’m thinking of the CNN broadcast in which a novelist is foisted off on the public as an expert on viral transmission.   Amid all the hysteria, we’re missing some important points.

What is the state of our medical research? What happened to our “stable research support trajectory? Instead of being entertained by the musings of a science fiction novelist, perhaps we could be hearing more from medical experts?  Say, from the National Institutes of Health?

“Dr. Francis Collins, the head of the National Institutes of Health, said that a decade of stagnant spending has “slowed down” research on all items, including vaccinations for infectious diseases. As a result, he said, the international community has been left playing catch-up on a potentially avoidable humanitarian catastrophe.

“NIH has been working on Ebola vaccines since 2001. It’s not like we suddenly woke up and thought, ‘Oh my gosh, we should have something ready here,'” Collins told The Huffington Post on Friday. “Frankly, if we had not gone through our 10-year slide in research support, we probably would have had a vaccine in time for this that would’ve gone through clinical trials and would have been ready.”  [HuffPo]

Why is the National Institutes of Health purchasing power down 23% from ten years ago? Or,  why does the following situation hold in terms of funding for research into infectious diseases?

“In fiscal year 2004, the agency’s budget was $28.03 billion. In FY 2013, it was $29.31 billion — barely a change, even before adjusting for inflation. The situation is even more pronounced at the National Institute of Allergy and Infectious Diseases, a subdivision of NIH, where the budget has fallen from $4.30 billion in FY 2004 to $4.25 billion in FY 2013.” [HuffPo]

We’ve endured a “ten year slide in research support,” meaning that we’ve not invested enough since 2004 to keep on track to provide pharmaceuticals and other research related to diseases such as that caused by the Ebola virus. Could it be that in the last ten years there has been a steady drum beat of opposition to federal funding … for almost anything? 

Our very own Representative Mark Amodei (R-NV2) announced back in January 2013 that federal spending was out of control, and Congress “hasn’t had the courage to fix it.”  In December 2013 he was pleased as punch with the Budget Act which cut federal funding, saying:

“This two year agreement moves us away from government by crisis and continuing resolutions, where so much of the status quo persists, and back to a legislative framework for reforming federal spending. It cuts the budget deficit by $23 billion without raising taxes at a time when the Senate wanted to increase spending by $1 trillion. It is 100 percent in line with the Budget Control Act deficit reduction numbers and does not end the sequester cuts, but replaces upfront, across-the-board cuts with targeted savings that are both larger and produce additional deficit reduction over the long term. The agreement is also $83 billion below the original Ryan Budget (2010) target for FY 2014.”

His current official website tells us:

“As a fiscal conservative, I believe that our nation’s deficit is out of control. We now borrow 42 cents for every dollar we spend. The bloated federal government spends some of that money on frivolous projects that benefit only a select group of special interests and other needless expenses.”

Now, in light of that ten year slide in appropriations for the National Institutes of Health, and the loss of the “stable research support trajectory,” can Representative Amodei still justify the reduction in NIH funding?  It isn’t like the NIH didn’t advertise what was going to happen under the terms of the budget act Representative Amodei was applauding:

“On March 1, 2013, as required by statute, President Obama signed an order initiating sequestration. The sequestration requires NIH to cut 5 percent or $1.55 billion of its fiscal year (FY) 2013 budget. NIH must apply the cut evenly across all programs, projects, and activities (PPAs), which are primarily NIH institutes and centers. This means every area of medical research will be affected.” [NIH]  (emphasis added)

Yes, “every area of medical research will be affected,” and that included the National Institute for Allergy and Infectious Diseases, a subdivision of the National Institutes of Health.   Remember that Government Shutdown in October 2013?  Not only did clinical trials get shut down at the CDC, but so did the processing of laboratory samples. [MedNewsToday]   All this makes a sentient person wonder how much more “reforming the budget” we can stand?

What is the status of our prevention and control capacity?  There’s a penchant on the right to try to attach the “sequester” to the President as if the budget he signed hadn’t been enacted by the Congress in 2013.  For those functioning in the real world,  it’s no secret that the Congress slashed funding for the CDC emergency preparedness program. [Vox]  Again, the CDC announced well in advance what the sequester cuts would do.

About $195 million was cut from “emerging and zoonotic infectious diseases,” another $19 million was cut from “public health scientific services,” also cut was $18 million from “global health” categories, and another $98 million from “public health preparedness and response” programs.  [CDC pdf]

$160 million less would be available in funding to on the ground public health in the United States, “a system already strained by state and local budget cuts.”  A further $33 million was cut from “state and local preparedness ability to respond to natural and man-made disasters.” [CDC pdf]

Do we have an institutional structure in place to enforce CDC guidelines on public health matters?   The CDC has issued guidelines for EMT responders in the wake of Ebola illness, now we have to ask, how are the guidelines to be implemented?  How are CDC guidelines to be implemented in hospital settings?   What the CDC issues are recommendations – what the privately owned hospitals actually DO is up to the administration and leadership in those hospitals.  And, now we get to the part where the people at ground zero are involved. 

The California Nurses Association surveyed its members and found that some were working in hospitals lacking “necessary protective equipment, such as HAZMAT suits, face shields, and fluid resistant suits and gowns.” Some also reported inadequate training on how to deal with Ebola, for example being given a video to watch without any hands-on, personal, training or rehearsals.  [CNA]

Obviously, those attending to patients with Ebola or SARS would need to use “Full Barrier” personal protective equipment, so the next obvious question should be – Does each local hospital, especially those in metropolitan areas served by international transportation hubs, have the Full Barrier PPEs, and have those who need them been trained in their use? And this state of affairs leads to yet another question.

What level of de-regulation in health care can we tolerate in order to provide the best public health services?    The NIH can research, and the CDC may recommend to their collective hearts content – but if the House of Representatives had its way every regulation would be scrutinized by Congress to see if it impinged in any way on the profitability of the health care provider.

When the House passed the REINS Act in 2013 language was added to require Congressional approval on health care related rules, in an amendment sponsored by Rep. Jason Smith (R-MO). [Hill]  Representative Amodei (R-NV2) and Heck (R-NV3) both voted in favor of the REINS Act, including as it did, the provision requiring Congressional approval of health care related regulations.  [vote 445]  Representative Titus (D-NV1) had the common sense to vote nay.  Worse still, for those who believe that hospitals should be required to act with some uniformity during a public health crisis, both Representatives Amodei and Heck voted in favor of the Smith Amendment. [vote 438]  Again, Representative Titus had the foresight to vote nay.

Not to put too fine a point to it, but Representatives Heck and Amodei voted in favor of a provision which would prevent the implementation of standards for isolation care and personal protective equipment/training if the hospitals could show that such regulations diminished their profitability.  Not only did Representative Amodei vote in favor of the Smith Amendment, and vote in favor of the REINS Act, he was one of the 164 co-sponsors.  The bill was sent to the Senate wherein it was, thankfully, buried in the files of the Committee on Homeland Security and Governmental Affairs.

In the instance of H.R. 367 (113th) nothing could be a better example of putting profits before people, especially considering the attachment of the Smith Amendment.

Our media would serve us far better if we were to be given background information on how our government and health care institutions could better protect us from – Ebola, MERS, SARS, Norovirus, drug resistant strains of bacteria, etc. and how funding priorities relate to national, state, and local preparedness.   It would beat listening to a novelist, a pundit, or some lady with a Ouija Board.

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Filed under Amodei, Congress, conservatism, health, Health Care, worker safety

The Word That Almost Dropped From The News

TantrumThe last few weeks of the news has been replete with Buzz Words: Shutdown, Default, Debt Ceiling, Affordable Care Act… The word that’s been lost in the shuffle is the S Word — Sequester.

Remember when Nevada Governor said the Sequester wasn’t going to be a necessarily bad thing? On February 28, 2013 Governor Sandoval assured residents of the Silver State the sequester wasn’t going to have any immediate impact:

“The federal “sequester” cuts begin Friday in what Sandoval described as a “gradual slowdown” of federal government.  “It’s not like we’re going to wake up tomorrow and the money won’t be there,” he said at a briefing to the press at the capitol.

He said his administration has prepared for the cuts beginning this past Fall, when Congress began to address the potential for mandatory federal budget cuts. Sandoval said the state has more than $15 million set aside to mitigate the budget cuts.” [LVSun]

However, by July 2013 some cracks were beginning to show.  It seems Nevada and Louisiana were reported as not having made preparations for the evaporation of federal funds to support the Emergency Unemployment Compensation Program.  States contribute to the unemployment benefits through their unemployment insurance programs for the first 26 weeks a person is unemployed, with the EUC kicking in for a total of 47 weeks.  [Pew] The other shoe dropped in August:

“More than 20,000 Nevadans will see a 59 percent reduction in their federal extended unemployment benefits beginning the week ending August 31 because of federal budget cuts known as sequestration, the state’s Department of Employment, Training and Rehabilitation reports.

The federal sequestration cuts will only affect federal extended benefits, also known as Emergency Unemployment Compensation, which begins after a claimant has exhausted their regular unemployment benefits which typically last up to 26 weeks, according to a news release.” [CarsonNow]

Perhaps the state could adapt to losing $9 million in funding for elementary and secondary schools, and $3.8 million in support for Special Education services.  Maybe the state could keep Head Start programs from eliminating some 300 youngsters from their rosters?  Could the state adjust to cover $1,156,000 from the Clean Water funding? Or, $764,000 in grants for Fish and Wildlife programs? Could the state adapt to the loss of $12.1 million in defense spending?  The furloughing of some 3,000 jobs in defense related employment?

The sequester also imperiled $258,000 in funding for Nevada’s efforts to upgrade its planning to address public health emergencies, another $78,000 for children’s vaccinations, and $$690,000 for sustaining programs to treat drug and alcohol abuse.  [SeqFacts.pdf]

In the meantime, Nevada’s Department of Employment, Training, and Rehabilitation launched a “calculator” to assist the long term unemployed calculate the reduction in their unemployment insurance benefits.   As of September 5, 2013 benefits for those unemployed longer than 26 weeks were cut by 59%. [TP]

On September 20, 2013 Governor Sandoval was happy with the employment numbers.

“I am pleased to see that August brought with it the strongest month to month job gain since April 2005,” Governor Brian Sandoval said. “After all of the monthly ups and downs, we appear to be on track to add approximately 20,000 jobs in 2013, on top of the combined 30,000 created in 2011 and 2012. While recent evidence suggests that we are headed in the right direction, our stubbornly high unemployment rate illustrates that much room remains for improvement.”  [DETR pdf]

However, things didn’t look quite so rosy from the U-4 and U-5 perspectives, those euphemistically referred to as “discouraged workers” — translation: I’ve stopped looking for work because there’s nothing out there for me.  Nevada’s U-4 rate was 11.3% and the U-5 rate was 12.5%.  [BLS] That was then, now we have Sequestration on Steroids.

The federal government shutdown means that support for tribal members will diminish, 5% of VA employees in Washoe County have been furloughed, the federal courts have enough money to keep going until October 15. [RGJ] By October 8, 2013 Governor Sandoval wasn’t quite so optimistic about the effect of slimming down the federal government.

His  list of agencies and programs on the chopping block included SNAP, WIC, both of which would be out of money by November 1.  The Nevada National Guard and the Unemployment Insurance Benefits program would be looking at furloughs, and the Governor wasn’t pleased about having to choose between funding milk for infants and toddlers and paying for the National Guard. [LVRJ]

The Governor may not be getting much assistance from the House Republican caucus and their shutdown proposal:

“Many House Republicans, leaving a closed-door party caucus earlier Thursday that at times grew contentious, said they would support their leadership’s short-term debt limit proposal. But they said they would do so only if Mr. Obama agreed to negotiate a broader deficit reduction deal, with big savings from entitlement programs.” [NYT]

There are strings on this package.  The first thread is that the Republicans are demanding that the Treasury Department’s authorization to apply extra-ordinary measures to prevent a federal default be stripped.  We should note that for all intents and purposes the Treasury has kept the default at bay since September 25th.  [HuffPo]  The second thread is permission from the Obama Administration to “negotiate a broader deficit reduction deal, with big savings from entitlement programs.”   This could make sequestration look like child’s play.

We know what the House Republican Sequester on Steroids might look like, we can look to the original demands made by their caucus when the current deadlock started. [TP]  These five will suffice to indicate the direction the House Republicans intend to take:

1. A balanced budget amendment — one of the sillier ideas ever proposed by any political entity, if for no other reason than every family budget includes debt (cars, houses, student loans).  2. Medicare Privatization.  The GOP ran this idea up the flag pole, only to have it flap in a gale of opposition from people who don’t want the Medicare program to be transformed into a coupon project.  3.  Means tested Social Security — an exceptionally unpopular idea.  4. Eliminating Social Service Block Grants — which would leave the Sandoval Administration in a bind tighter than the one in which it finds itself at the moment.   5. The restriction of the Child Tax Credit — a proposal guaranteed to draw fire from families with children. (More here.)

If we thought the sequester was a bad idea — this list of bargaining points is, indeed, Sequester on Steroids, and like those rather dangerous drugs, it should be avoided.

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Filed under Economy, Politics

Sequestration Frustration and the White Queen’s Economics

Alice WonderlandThe House Republicans continue to manufacture mountains of problems out of mole-hills of economic issues, and they can’t be completely oblivious to the ramifications of their ideologically driven proposals for Nevada.  Here’s a hint:

“In fact, Nellis Air Force base has no new information about how the sequester changes might affect their operations, and is making no different plans to react to sequestration than they were a month ago, according to spokeswoman Jessica Turner. Civilian furloughs begin at the end of April, and from there on, will be equivalent to about a 20 percent pay cut through September.” [LVSun]

That’s five months with 20% pay cuts for civilian workers at Nellis AFB.  Although the article doesn’t give the average pay for a civilian worker at Nellis, we might reasonably assume that it’s comparable to other AFBs around the nation, in which case the average annual pay is about $50,000. [Portales] It’s also public knowledge since November 2011 that there have already been cuts to civilian employment at Nellis and other installations in Nevada:

“Combined, the Southern Nevada bases and range installations account for 10,393 military and 4,366 civilian employees with a payroll of nearly $1.2 billion. In 2010, there were about 6,416 indirect jobs created with an annual dollar value of $257 million. “We’ve had a civilian hiring freeze for some time. Of those 155 being considered, some or all might be cut,” Lustig said Thursday.”  [LVRJ]

If all the positions were cut back in 2011-2012, then we could estimate there are about 4,211 civilian jobs associated with military installations in southern Nevada.   4,211 employees multiplied by the average salary or wages of $50,000 comes out to $210,550,000 annually.  If we shave 20% of the total then we’d calculate a loss of $42,110,000 to the regional economy of southern Nevada.   It’s at this point where the square peg of ideological purity meets the round hole of economic reality.

The White Queen’s Economics

“Alice laughed: “There’s no use trying,” she said; “one can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”
Alice in Wonderland.

Impossible Thing One:Spending is the Problem.”  We have the Sequester because it is taken as an article of faith in Republican quarters that federal government spending is “out of control.”  Much was made of the fact that the U.S. was borrowing 36¢ on the dollar back in late 2011 , but there wasn’t much  said about the fact that this rate had been DECREASING.  For fiscal 2009 the rate had been 40¢ and 37¢ in FY2010.  [FactCheck]   This brings us to the report from the BEA in February 2013:

“The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment, federal government spending, exports, and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, decreased.” (emphasis added)

If the amount borrowed per dollar of revenue is declining, and if the sluggish rate of growth indicated by the 4Q GDP report is partially explained by a reduction in federal spending — then how on earth can a sentient person maintain the fantasy that “spending is out of control?”

Impossible Thing Two:   “Every dollar borrowed by government is a dollar that is not being invested in our private sector economy.”  This is an articulation of the Crowd Out Theory — this makes some sense IF and ONLY IF interest rates are HIGH.  Even then it’s a bit sketchy because some government revenues are invested in research, development, business subsidies, commercial ventures,  and the like.   Dare we venture into the real world and look at corporate borrowing costs?  If the Crowd Out Theory is correct, and government borrowing is making corporate borrowing more expensive, then what do we make of the following chart?

Corporate Bond Yields

Moody’s forecast shows top quality corporate bonds paying about 4.01% interest through August 2013.  As of July, 2000 corporations were paying 7.67%  interest. [FRB H15]  Thus much for government borrowing crowding out corporate borrowing.

Impossible Thing Three:   “Government can’t create jobs.”  When pressed about the relationship between teachers, firefighters, police officers, social workers, and “government” the answer from right wing ideologues is often punctuated by stammers — or pontifications about how public employees are Piggies At the Public Trough.  A decision must be made at this juncture: Does government not create jobs, or is it that government creates too many “good” jobs?

Caution must be taken with charts purporting to “prove” government employees are making “too much money” in comparison to the private sector, especially when educational and expertise requirements are taken into consideration.  Additionally, even the AEI is moved to report that workers moving from public to private sector employment are more likely to take a cut in pay.   However, this isn’t the core of the issue.

Government does create jobs, and in the private sector.   “But, but, but,” stammers our hypothetical ideologue, “Those aren’t REAL jobs. Permanent Jobs.”   Ask any construction contractor and the individual will tell you the obvious: No construction job is permanent.  When the highway is finished the job runs out and it’s time to bid for another contract.  Since we have a lovely backlog of clean water, sewage treatment, bridge building, and transportation related projects we’re fobbing off on our descendants, wouldn’t it be a nice “job creating” thing if we paid some of this bill ourselves and at least made a head start on the payments?

Impossible Thing Four:  “The national debt will turn us into an unstable place like Greece.” (Or Spain, or Italy, or Ireland, or Cyprus).   Nonsense.  For one thing we have our own national currency, [Creamer] and secondly, the economic policy process in the Eurozone should remind us all that the authors of the Federalist Papers were absolutely right in arguing we needed a unified national structure (our Constitution) in order to put ourselves on a sound fiscal basis.   If a person might wonder about what happens when a loose confederation attempts to behave like a sovereign nation, it’s advisable to look at Hamilton’s response in Federalist 15.  He was even more blunt in Number 17,  “Commerce, finance, negotiation, and war seem to comprehend all the objects which have charms for minds governed by that passion; and all the powers necessary to those objects ought, in the first instance, to be lodged in the national depository.”

Another factor too often overlooked during periods of hyperbolic hysteria is that the U.S. has something else the Eurozone does not — a federal monetary policy compliments of the Federal Reserve System which can monetize the federal debt, and a process by which we prevent “runs.”

Impossible Thing Five:  “Our national debt is a serious and immediate problem! Just look at all those digits on the debt clock.”   Calm. Down. The debt isn’t an immediate problem (even some members of the House GOP are beginning to back off this canard) what we need to be doing — in a rational universe — is to stabilize the national debt.   Here’s what our debt looks like compared to our Gross National Product:

Debt GDP

In the wake of the Great Recession and wars in Iraq and Afghanistan, we’re now looking at a 67.7 ratio; [Atlantic] but then Germany’s public debt is at 80.6, Canada’s is at 87.4, Italy’s is 120.1. [Atlantic]  The average in the Eurozone is about 82.5.   The trick isn’t to “pay off the national debt” because who would want their long term Treasury notes paid off before collecting all the interest?  The U.S., as noted previously, doesn’t have creditors — it has Investors, and as of right now the 30 year U.S. note is paying a rather measly 3.15% interest rate.  The ten year notes are only paying 1.95%, and the 20 year notes will earn an investor 2.77%.  [TreasuryYieldCurve]  If we aren’t obliged to pay higher interest rates to people who are investing in our national notes, then why should anyone believe that The Debt is a terrifying thing?

Impossible Thing Six:   “Federal Spending hurts our economy.”  Now, we’re back to Nellis AFB in southern Nevada, or to northern Virginia — home to thousands of federal employees, or to Youngstown, Ohio with its TechBelt Initiative.  What happens in places like Las Vegas and surrounds when $42 million is removed from the local economy in a year?  As repeated ad nauseam herein, “government spending” doesn’t fall into a black hole.  Salaries and wages are spent in the local economy, for everything from apples to zoology textbooks.  Those unsure of the importance of federal spending in local economies have only to look at the various renditions of grief on display when the Department of Defense seeks to close a base.  Once more, with great feeling — the formula for both aggregate demand and for the calculation of the GDP assumes government spending at national, state, and local levels.  GDP= C+I+G (for government) + (X-M).

What is truly alarming is the capacity of members of Congress to believe all six of these impossible things before breakfast.

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Filed under Defense Department, Defense spending, Economy, Nevada economy, Uncategorized

Sunday Roundup of Recommended Reading

Cattle Roundup Nevada Legislative News:    For an analysis of the tax reform battle currently on view in the Nevada Legislature, see “Mining for Clarity,” from the Nevada Progressive.  You’ll find some context in “Let’s Talk Tax Reform and Mean It” from a February edition of the Nevada Public Employees Focus, and a bit more from The Nevada View.  For more information see: “Nevada Funds Mining’s Big Mistakes,” in CityLife.  And, there’s more from the mining corporations in “Mining Rep: Republican Effort to Tax Us in Punitive,” Las Vegas Sun.

The economy:  The battle over the provisions of the Dodd-Frank Act have moved into the caliginous rule making phase.  The efforts were the subject of an MSNBC piece (video), which (finally) picks up on a review from The Hill, in which it was reported that more than half of the Dodd-Frank Act rules are still “in the works” from January 28, 2013.   There’s more from the Angry Bear economics blog,  in which we find the fraudsters now seeking to use the Sequester to cut funding for rule making and implementation.  The following does not bode well for assisting the various Federal agencies tasked with keeping up with the “creative” machinations of the Wall Street Wizards:

“Aside from federal civil and voting rights programs, investment law enforcement agencies and commissions on the chopping block include the Securities and Exchange Commission (a possible $115 million reduction), Commodity Futures Trading Commission ($17 million), federal courts ($384 million at risk), Public Accounting Oversight Board ($18 million) and the Securities Investor Protection Corporation ($23 million). In sum, $557 million could be cut from investor protection programs, barring Congressional intervention.”  [Angry Bear]

Naked Capitalism has an excellent piece on the prevarications of banking regulators who are supposed to be keeping an eye on the welfare of Americans who have money in the banks, not just the bankers who are raking in more American money, they call it “safety and security” — they mean “profitability.”  In a more general vein, there’s a MUST read post from Henry Blodget, “In Case You Needed More Proof That It’s Stupid To Cut Government Spending In A Weak Economy…” in Business Insider.    And, if you have not already read Michael Hiltzik’s piece for the Los Angeles Times, “The five biggest lies about entitlement programs,” please click over and read his summarization.  Here’s a taste:

“As efforts to cut Social Security and Medicare gather steam in the budget wrangling in Washington, you’ll hear these mega-trillions being thrown around more and more. Beware. They’re numbers designed to terrify, not edify.  The assertion comes from something called the “infinite horizon” projection. It’s a calculation of funding gaps projected out to the limitless future and then converted to present value — meaning what the cost would be if we had to pay it all today. For Social Security, the figure was $20.5 trillion, as reported in the program trustees’ latest report. For Medicare, the number comes to about $42.7 trillion. Even professional actuaries say this calculation is bogus.”

Media and Politics Finally! Someone calls out the Village Press Corps for continuing to bleat that the “President should reach out more…,” another Must Read is Dee Evan’s blast of sanity “More Selective Memory…” in the Huffington Post.

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Filed under Economy, financial regulation, media, nevada education, Nevada legislature, Nevada politics

A Shot In the Sequester Battle: GAO Report on BRAC Implementation and Implications for Civilian Cost Cutting

DoD CobraSomething for the Nevada Congressional delegation to consider while pounding away on the Sequester question is a report today from the GAO concerning the Cost of Base Realignment Actions (COBRA) by the U.S. Department of Defense.  If the intention is that our military operations become more fiscally rational, and our military system more structurally efficient — we have a way to go.

Our first clue is that when a report shifts from a complimentary tone concerning Department of Defense efforts at fiscal responsibility to the next sentence beginning with the word “however,” something is amiss.  For example, after commending the DoD’s projections about costs of base realignments, here comes the punch line:

“However, DOD’s process for providing the BRAC Commission with cost and savings estimates was hindered in many cases by underestimating recommendation specific requirements that were entered into the COBRA model. For example, military construction costs for BRAC 2005 increased from $13.2 billion estimated by the BRAC Commission in 2005 to $24.5 billion after implementation ended in 2011.”

We’re all familiar with cost overruns in construction projects, and with under-estimations of expenditures, but a +93.18% level is much more difficult to explain.   There’s (a) something wrong with the model? (b) something wrong with the estimates? or (c) something wrong with both of these inputs?  The GAO Report explains:

“GAO found that other cost estimates increased because requirements were initially understated or not identified as inputs into COBRA. DOD also did not fully anticipate information technology requirements for many recommendations. For example, the initial information technology cost estimate for one recommendation was nearly $31 million, but implementation costs increased to over $190 million once those requirements were better defined.”

In short, the difference between the idea and the implementation proved to be far more expensive than initially estimated.   Moreover, the methods used to guide its projections didn’t fill the bill:

“DOD was unable to always document the methodology used to estimate savings from reducing military personnel positions. Therefore, to increase the fidelity of the initial cost estimates that DOD submits with its recommendations to the BRAC Commission for a future BRAC round, GAO is recommending that the Office of the Secretary of Defense (OSD) improve the process for identifying and estimating the cost of requirements for military construction and information technology and update the guidance on documenting how it identifies military personnel position-elimination savings.”

Or, not to put too fine a point to it, the U.S. military (a) didn’t do a very good job of estimating the costs associated with construction and IT demands, and (b) needs to figure out a way to substantiate its estimates of the results of eliminating redundant or unnecessary positions.   The GAO provides a helpful example:

“By implementing BRAC 2005, DOD closed 24 major bases, realigned 24 major bases, eliminated about 12,000 civilian positions, and achieved estimated net annual recurring savings of $3.8 billion; however, the department cannot provide documentation to show to what extent it reduced plant replacement value or vacated leased space as it reported in May 2005 that it intended to do.” (emphasis added)

And, when the documentation is faulty it is difficult, if not nearly impossible to determine if the actions taken are producing any real savings to U.S. taxpayers.   Part of the problem associated with generating cost savings in the Department of Defense may well be related to the priority given to the implementation of the BRAC recommendations themselves.

“Although reductions in excess infrastructure to generate cost savings remained an important goal for DOD, the extent and timing of potential costs and savings, including the number of years it would take for the savings to exceed costs, was included as “other” or secondary criteria. As a result, many BRAC recommendations were not expected to produce 20-year net savings. Also, the BRAC Commission added contingency clauses to some recommendations, which allowed some outcomes to be defined by events or decisions that could occur after Congress could have prevented the BRAC recommendations from becoming binding, if it so chose. Hence, Congress had limited visibility into the potential cost of those recommendations.”

If the Department is realigning for strategic purposes then it might be logical to conclude that savings aren’t the main priority.  However, if the Department is called upon to further reduce costs as the result of sequestration, a Grand Bargain, or other Congressional maneuvers, then Congress definitely needs more “visibility” into the process.

One of the more helpful components of GAO reports is that they don’t merely criticize, but also offer recommendations for improvement.  In this case there are three:

“GAO is suggesting several matters for Congress to consider for amending the BRAC statute if it decides to authorize future BRAC rounds. First, if cost savings are to be a goal of any future BRAC round, Congress could elevate the priority DOD and the BRAC Commission give to potential costs and savings as a selection criterion for making BRAC recommendations. Second, Congress could consider requiring OSD to formally establish targets that the department expects to achieve from a future BRAC process and require OSD to propose selection criteria as necessary to help achieve those targets. Finally, Congress could consider whether to limit or prohibit the BRAC Commission from adding a contingent element to any BRAC recommendation and, if it is to be permitted, under what conditions.”

The first makes perfect sense.  If, in fact, cost savings and not strategic considerations are the priority then Congress should say so.  Secondly, more thought should be given to forming implementation targets and setting BRAC priorities.  Finally, if “contingent elements” are to be added we need more oversight into what will be allowable, and under what conditions it would be permitted.

All of this argues against the Meat Axe Approach to the reduction of federal spending.   There may very well be a message here which could be applicable to other government agencies.

There are at least two reasons why agencies, military or civilian, might adjust their operations: Strategic (providing better or more efficient service), and Monetary (getting by with less expenditures of public funds.)

The first asks the question how can we better and more efficiently implement our core mission to serve the people of the United States, while the second simply asks what can we cut in order to save money.  If we extrapolate the military situation into civilian terms then we can more readily see the implications of cost cutting for its own sake.

At this point it would be well to consider the nature of budget cutting and the rationales offered therefore.   Budgets can be cut to save money, but not so much that the agency cannot perform its central mission, or budgets can be axed to prevent an agency from conducting its basic business.   In this context, the House Republicans will be re-introducing the Ryan Budget 2.0 (or whatever version count we’ve now achieved).

“The plan by the GOP vice-presidential nominee is expected to lock in cuts to agency budgets, and curb the future growth of benefit programs like food stamps and Medicaid and contain a controversial proposal to turn Medicare into a voucher-like program for seniors younger than 55. Ryan said it’ll take relatively small additional spending cuts beyond those proposed last year to demonstrate balance.” [USAToday]

What if we were to apply the GAO recommendations on BRAC implementation to the civilian side of the budget proposed by the House Republicans (or, for that matter, to the budget amendments being compiled on the Senate side)?

The Medicare Question

Are the House Republicans proposing to voucher-ize the Medicare program into a coupon-care operation because they want to save money, or because they want to revert to a privatized system of health insurance acquisition for the elderly?  In GAO/BRAC terms — is the proposal strategic or savings oriented?  The Tea Party/GOP response could well be “both.”  Adopting their ideology assumes that privatizing the system would in theory save money and secure the basic provision of health care for elderly Americans in a “free market.”   This is an essentially locular position.

The main cavity is that health care markets in the United States aren’t working like commodity markets, never have and never can.  “Health” is not a commodity.  People don’t make economic choices about the purchase of health care services.    A “strategic” view would incorporate this concept.  As there is no logical way to argue that U.S. military presence in Korea is “unessential” at the moment — there is no way to validly argue that the access to health care service can be fobbed off into a market which commodifies the un-commodifyable.

The Oversight Question

As the GAO recommended more Congressional visibility in the issues raised by BRAC policies, we might want more transparency in the strategies asserted by Congress in others, civilian, functions.  One example might be the CFPB. The Consumer Financial Protection Bureau has never been popular with Republicans, who seek to replace it with a “committee” structure beholden to bankers and Wall Street investment houses.   Again, we come to the question of whether the proposed cuts are “strategic” or “cost saving” in nature.

Initial estimate projected  it would cost about $143 million to get the agency up and running, and Republicans immediately revised this downward in 2011 to $80 million. [HuffPo]  Budgeting for an agency in “creation mode” offers a point of comparison with Defense Department efforts to “re-create” some of its functions and their implementation.   The CFPB needs to hire employees (as the DoD needs to recruit personnel compatible with its mission) and to “build out core supervision and enforcement capability.” [BIB CFPB pdf] The FY 2013 Administration Budget calls for $261,119,000 for enforcement and supervision (up 22% from FY 2012) and $126,025,000 for consumer engagement and responses to consumer concerns about financial products being marketed to them. (Up 49% from FY 2012)

A suggested reduction in the FY 2013 budget for the practical elements (supervision of financial services and engagement of consumers in understanding financial products and services) means that someone is making a “strategic” decision about how resources are to be allocated for these basic functions.  Do we, for example, put “bases” in all major U.S. cities, or do we attempt to function with a single centralized base of operations in Washington, D.C? Do we appropriate funds for minimal staffing in all “bases,” or do we strive for moderate staffing levels in some, minimal in others?

The Final Question

Removing for the moment those ideological radicals who really want no government and no regulation of major economic or environmental factors (physical or social) in our lives (save for the defense contractors in their Congressional districts?) it’s reasonable to assert that when we say “smaller government” we say we want more efficient government.  If this is truly the object then why not consider applying the GAO recommendations to the budget conversation?

We want the best cost projection models possible. Further, we want to know if the estimations are predicated on cost savings or strategic considerations.  We deserve to know the Congressional priorities in budget allocations, and finally we should be told — in terms as clear as possible — if changes are to be made who made them and why.

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Filed under Appropriations, Defense Department, financial regulation, Medicare

Bait and Switch Political Economy

Free CheeseSo, why are we really stuck in the Silli-quester?  The one option that was supposed to be so distinctly unpleasant and irrational that both major political parties would eschew any connection to it and thereby be inclined to adopt compromise measures?  Bait and Switch.

Why are the punditocracy chattering on about how both sides should exercise some political rationality (if that isn’t an oxymoron) and move to the discussion about serious economic needs, such as job creation (without all the inanity of trickle down hoax-isms) and debt stabilization?  Bait and Switch. Why Bait and Switch?

Beneath all the chatter are some very different world views, political ideologies, and priorities.  In an ideal world there would be less reason to discuss who is to blame for the economic mess in which we find ourselves, and more reason to sit down and talk about how we (1) encourage economic growth and (2) stabilize our indebtedness.  This obviously isn’t a perfect world.

It’s going to take some good old fashioned rational discussion in a FACT based universe to get out of this muddle.  The facts are unpleasant on both sides of the polarized political flanks, but they do need to be the main topics of conversation before we can get out of the Bait and Switch model.

The Bait

This is all about stabilizing the national debt.  Yes, and no.  Those who are truly of sound mind and reasonable thinking recognize two things: (a) We have a situation in which health care costs are driving up federal expenditures just as they are taking a larger chuck out of family finances; and (b) our tax laws need some reform — real reform — not merely another excuse to reduce taxes on the economic elite who are more inclined to indulge in speculation than in the less profitable but more productive investment in industrial and commercial development.   The third fact of life is that we engaged in not one, but two wars, an activity designed to suck the sustenance out of any consumer based economy.

The Switch

This is all about the national debt.  Is it? Or, is it cover for indulging in the enaction of Austerity economics which calls for the reduction of government spending without increasing government revenue?  Consider the vehement opposition of the Tea Party caucus of the House GOP to any suggestion that we need to enhance revenue to reduce and stabilize the national indebtedness.  If this group were truly speaking to the unsustainability of our current debt trajectory then revenue increases would be a logical portion of the debate.  However, it’s not.  The debt level becomes the bait, and the unwillingness to even consider revenue increases signals that their real object is what it has always been — an adherence to the mythology that government (even a government trying to serve the needs of 330 million people) is Too Big and needs to be restricted.  As usual, Robert Reich has summarized the problem succinctly:

“Tea Party Republicans are crowing about the “sequestration” cuts beginning today (Friday). “This will be the first significant tea party victory in that we got what we set out to do in changing Washington,” says Rep. Tim Huelskamp (Kan.), a Tea Partier who was first elected in 2010.

Sequestration is only the start. What they set out to do was not simply change Washington but eviscerate the U.S. government — “drown it in the bathtub,” in the words of their guru Grover Norquist – slashing Social Security and Medicare, ending worker protections we’ve had since the 1930s, eroding civil rights and voting rights, terminating programs that have helped the poor for generations, and making it impossible for the government to invest in our future.”

These are the people who took President Ronald Reagan’s message to heart, “The government is the problem,” and then took the philosophy further than that former President ever considered.  The radical right wing of the Republican Party has created an environment in which even the Speaker of the House can’t get legislation to the floor, or must break his own “Hastert Rule” to get anything passed.  There may be a core of rational Republican members of Congress who might give thought to compromising and indulge in some serious discussions about government spending, taxation, and infrastructure investment — BUT each one of them sits beneath the Damocletian Sword of a primary challenge from some candidate even more conservative than themselves.

Real Problems Should Have Realistic Solutions

While it would be nice to assume that social safety net programs such as Medicare and Medicaid are sustainable in the present context, that really isn’t a reasonable conclusion.  Recognition of the problems associated with maintaining an acceptable level of service to Medicare beneficiaries is essential.

The solution presented by Rep. Paul Ryan to privatize the Medicare system and transform it into a coupon-care or voucher program doesn’t solve the problems any more than calling for the program to continue without further improvements.   The real problem is the rising cost of health care delivery, and until we can address how to reduce the costs increases the programs for health care assistance will be financially unsustainable.

Those who have not yet read Steven Brill’s excellent piece in Time magazine should do so immediately.   Here’s an essential part of the reporting:

“When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational — no rhyme or reason — about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.  Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?”

Nailed It!  And Brill goes on to explain or describe the basic issues involved, such as the inflated prices for common products, the perverse economics of medical technology, bills to match the catastrophic nature of the illness or injury, and the handcuffs on Medicare.

Tea Party Caucus radicals would have us believe there is no middle ground between transforming the Medicare program into a privatized voucher system and turning Medicaid into a parsimoniously funded block grant program and Socialized Medicine.  This is not the case.  It’s certainly not the case when we examine what happens in the health care market, when “insurance isn’t insurance” and chargemasters determine “opening bids” for costs.  Health care cost containment is the essential issue — we should be asking, as Brill suggests, not who should pay, but how much should be paid — by anyone, public or personal.

The Affordable Care Act has some features which will reduce the costs of medical services and treatment, but it is not the answer to the dilemma of how to fix a “broken market.”  Ideological squabbling over Repeal or Not To Repeal is a waste of time, and of time which would be better spent trying to solve the Gordian Knot of health care cost containment.

There are two things, often suggested, and in the past often done, which would alleviate some of the problems associated with Medicare and Medicaid funding. First, we could allow the Department of Health and Human Services to negotiate prices for prescription medication. Secondly, we could get serious about regulating and rationalizing the pricing structures of hospital and medical services.

The inclusion of Social Security “reform” in the Silli-quester debate is informative,  since the program is self funding and doesn’t add to the national level of indebtedness, the only reason for incorporating it into the “entitlement” discussion is to cut it — as radical right wing adversaries have wanted to do since it was enacted during the Depression.  We could, for example increase the liability cap above the current $113,700 in income for the Social Security program. There’s a boatload of difference in the financial resources of a family with an annual income of $1,113,700 and a family with annual resources of $113,700.  Surely those in the upper 0.1% of the income pyramid could afford to pay in a bit more?

The use of the Chained CPI isn’t a popular suggestion, but the chains may not be shackles.

“While no one knows what a full elderly CPI will show, we do know that switching the COLA to a chained CPI will reduce lifetime Social Security benefits by an average of about 3 percent. This doesn’t raise a huge amount of money, but it would be a big hit to seniors, 70 percent of whom rely on Social Security for more than half of their income.” [CEPR]

The problem, of course, is that elderly people don’t purchase items that show up in the inflation calculations (cars, electronics, etc.) as often as younger people; but, they do spend on housing and health care. (See health care cost containment above).   There is nothing essentially wrong with discussing the Chained CPI if it can be done reasonably.  For example, could the index be adjusted to account for the variance in inflation associated with the consumption patterns of elderly individuals?  Or, if we can achieve some kind of stable economic growth would the reductions in benefits associated with the Chained CPI be mitigated?  Bellowing, “Social Security is a Ponzi Scheme,” or “There won’t be anything left for Junior,” isn’t the way to start a discussion about these details any more than the absolute “Don’t Touch Social Security”  in any way, shape or form is on the other hand.   Note that both the Medicare and the Social Security inflation adjustment issues are related to the bug-bear of health care cost containment?

It’s not just our population that’s aging. So are our bridges, highways, parks, and other public facilities.  We have aging public building that could lower their utility costs with upgrading, and we have aging public structures which should be replaced.   And, then there are schools:

About one-fourth (28 percent) of all public schools were built before 1950, and 45 percent of all public schools were built between 1950 and 1969 (table 1).Seventeen percent of public schools were built between 1970 and 1984, and 10 percent were built after 1985. The increase in the construction of schools between 1950 and 1969 corresponds to the years during which the Baby Boom generation was going to school. [NCES]

Not to put too fine a point on it, but after 60 years most school buildings need so much renovation that they aren’t functional and most are abandoned.

Since we probably can’t build everything at once, how about focusing on roads and bridges?  Various suggestions have been made concerning upgrading American infrastructure, and if we want to have a serious discussion about this topic we might begin with the obvious — crumbling roads and bridges.  Why not allow the U.S. Treasury to issue some long term bonds (30 year) expressly for the purpose of addressing transportation infrastructure needs?  This could be a win-win proposition.  The bondholders have a safe haven investment which is interest earning, the public gets better roads and bridges, and if we must have a “pay for” element we could consider increasing fees or use taxes by a minimal amount, again expressly for the purpose of paying off the bondholders.

These kinds of suggestions deserve more attention than they are getting, but they will not get serious consideration until ideologues stop screeching “the government can’t create jobs,” or “we can’t increase taxes any taxes any time,” as the bridge slowly crumbles beneath us.   The bond issuance idea deserves a serious moment — the public assets values increase, the bonds earn interest for the investors, and everyone’s safer.   Little wonder then that the AFL-CIO and the U.S. Chamber of Commerce are both supportive of infrastructure investment.   Short term, the construction sector of the economy gets a boost; long term the investors and the public benefit from the proposal.

Taxing Issues

We do need tax reform.  What we don’t need is one more scheme to shift the burden of financing government from the economic elites to working men and women in America.  Yes, that would be the old Flat Tax canard.   In case Speaker of the House Rep. John Boehner would like to find the President’s plan for revenue and budget stability it’s located in plain sight right here.  The proposal includes one tax reform that should be given some attention.

The President proposes that itemized deductions be limited to 28% for wealthy individuals.   What should be on the table in addition to this suggestion is the variance in the way we tax earnings.  As former FDIC Chr. Sheila Bair has noted, “Why does a hedge fund manager pay lower tax rates than a shoe store manager?”  Good question. Additionally, no one has yet put forth a credible argument (complete with some hard data) to sustain the idea that the investors are really “job creators,” but factory and office  managers definitely are those making staffing and hiring decisions.   We might also give some time to the issue of allowing corporations to indefinitely defer taxes on profits made overseas.

Republicans in the 2012 campaign season often spoke of closing loopholes, however vaguely those were described.  Let’s get specific.  Why are there loopholes for corporate jets? For yachts?  For highly profitable oil corporations?   Both sides of the aisle might want to talk about the possibility that if a sufficient number of these loopholes were closed then perhaps the overall rates could be reduced?

In short, if we are truly looking toward stabilizing our national debt, as opposed to merely trying to drown our government in a bath tub,  there are rational ways to do it — but in order to accomplish that we need to have some rational discussions about the route we choose.  Bait and Switch is never a good starting point, but abatement in the hyperbole and switching to a more reasonable level of civic discourse would be an excellent place to begin.

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Filed under Congress, Economy, Politics, Taxation

Heller’s Platitudes on a Platter: With Charts and Pictures

Heller 2Quick! Someone get some valid economic information to Senator Dean Heller (R-NV) before he embarrasses himself again.

“The nomination of Jack Lew to be Secretary of the Treasury suggests that this Administration has learned nothing from the debt-driven economic policies of the past four years, and intends to move forward with more of its signature tax and spend policies.

“As the architect and defender of the President’s irresponsible budgets amid grave economic circumstances, Mr. Lew has failed to demonstrate the leadership and commitment to responsibility that this country needs in its chief economic advisers.

“While I respect the fact that Mr. Lew has remained a public servant for many years, I cannot support the nomination of an individual who does not share my commitment to treating taxpayers’ dollars responsibly,” Heller said. [RGJ]

Let Us Parse:

“….debt-driven economic policies of the past four years…”  OK, Senator Heller isn’t expected to be reading all the articles in every economic and business magazine and journal, BUT he could at least look at the pictures in Forbes.  We Repeat:

Obama spending forbes chart

Now what does the headline, “Slowest spending in decades,” tell us?

…signature tax and spend policies…   Here’s a heads-up for everyone. There are basically two things to do with tax revenues: (1) spend the money for government services, or (2) utilize the funds to reduce the federal debt.  However, if you’ve been reading this blog even for a short while, you know that already.

Of all the GOP talking points, the elderly “tax and spend” bumper sticker shorthand is the most hoary, and least accurate.  For example, the last time we had a budget surplus it was during a Democratic Administration.   Notice that the annualized growth in federal spending stood at 3.2 and 3.8 during the Clinton years.  Notice what it did during the two Administrations of George W. Bush, during the “Credit Card Conservative” years?  Those numbers are 7.3 and 8.1, even if the 2009 stimulus is assigned to the Democratic Obama Administration.

Secondly, during any recession, and we had a whopper when the Housing Bubble exploded all over the economy in 2008, government spending increases when AUTOMATIC STABILIZATION programs kick in to soften the damage to our economy.  Unemployment insurance benefits, food stamps (SNAP), and similar stabilization programs prevent recessions from becoming depressions.   The Tax Policy Center explains:

“Automatic stabilizers are features of the tax and transfer systems that tend by their design to offset fluctuations in economic activity without direct intervention by policymakers. When incomes are high, tax liabilities rise and eligibility for government benefits falls, without any change in the tax code or other legislation. Conversely, when incomes slip, tax liabilities drop and more families become eligible for government transfer programs, such as food stamps and unemployment insurance, that help buttress their income.”

Why keep repeating this basic bit of modern economics? Because it seems to have escaped Senator Heller and other radical conservatives, who believe that if we simply reduce taxation on the wealthiest Americans investment in domestic business enterprises will magically increase even if consumers don’t have the financial wherewithal to increase the demand for goods and services.

“…As the architect and defender of the President’s irresponsible budgets amid grave economic circumstances…”  There are several problems with this analysis, aside from the fact that it is vacuous and vague.  First, I thought one of Senator Heller’s complaints was that we don’t have a budget…that we haven’t passed a budget…that we are operating without a budget? [NPR]

Heller No Budget

All right, the President is functioning with numbers from the 2011 Budget Control Act, the response to the GOP threat to shut down the federal government in the debt ceiling fight of 2011, and the source of the Silli-quester we’re now engaged in.   So, is the “out of control” spending a function of the Congressional act of passing the Budget Control Act?

Frankly and bluntly, the phrasing adopted by Senator Heller is nothing more than a repetition of the Tax and Spend mythology from the first paragraph of his statement.   And, now to the second point.

What grave economic circumstances? For Whom?

Is he talking about economic activity in terms of the U.S. financial markets?  If he is then someone needs to get him a newspaper.  Here’s the graph of financial markets as measured by the S&P 500 for the past five years:

SP 500 march 2013

For reference, the index was at 683.38 as of March 2, 2009.  An 831.03 increase (or 121.606 % increase) in the S&P doesn’t signal anything “grave” to me about the health of our financial markets.  So, if a family’s income depends on investments then the past five years have been anything but “grave.”

If, however, ones personal wealth doesn’t come from investments, then indeed, the picture isn’t quite so pleasant. Consider the following information from The State of Working America (pdf).

Change in Wealth

Those reports about most of the increase in the nation’s wealth going to the upper echelons of American economic elites are accurate, and not only are they accurate they follow a pattern beginning in the 1980s in which the rich start becoming yet richer while the percentage going to the bottom 80% of the U.S. population begins to trend downward.

And, it’s not only wealth distribution which is increasingly headed toward the top, it’s income as well.  During the recovery we’ve seen most of the income going to about 15 counties in the United States.  [Forbes] Forbes has more:

“Galbraith’s not the only one who feels that way. Here’s the free market apostle Alan Greenspan in 2007 admitting that “you cannot have a market capitalist system if there is a significant mood in the population that its rewards are unjustly distributed.” Notice please the notion “unjustly distributed” from one of the policymakers who made it so.”

So, at this point it might be wise to ask if Senator Heller and his Republican colleagues in the U.S. Senate might be amenable to suggestions regarding how to devise a more just distribution, one in which more American consumers could be encouraged to support our manufacturers and retailers by spending more money?

The Real Questions

Does Senator Heller understand that, as discussed previously, aggregate demand and Gross Domestic Product are essentially the same thing?  And, that a reduction in government spending means the reduction in spending for everything from personnel costs to paper clips? From aircraft carriers and armaments to thermometers for food safety testing?  Some companies are manufacturing and selling these products — thus if orders decline so does our GDP.  [See more here]

Would Senator Heller and his associates agree with legislation to increase the minimum wage?  If you really want to put more money into more people’s pockets this is the easiest way to do it.  We can assume he would not be in favor of this remedy because he voted against raising the minimum wage in January 2007.  [H.R. 2 Fair Minimum Wage Act 2007, vote 18]

Since most of the wealth for those not earning most of the family income in the financial markets is tied up in the family home, would Senator Heller support measures to bolster the value of family residences and to help families facing foreclosure?  Judging from his voting record, it doesn’t seem so.  Senator Heller’s on record opposing the Home Affordable Mortgage Program (2011), and opposing modification to bankruptcy laws to help homeowners avoid foreclosures (2009). [OnTheIssues] Nor could he even find it in his conscience to support funding affordable housing renovation in “severely distressed public housing.” [OnTheIssues]

The Real Answers

Contrary to popular thinking among Republicans it really is possible to be Pro-Business and to also consider the needs of shareholders and consumers.  Being Pro-Banking doesn’t necessarily mean a person is Pro-Growth.   Growth, as former Federal Reserve Chairman Greenspan came to understand by 2007, requires a vigorous consumer base, which in turn requires protection for those who work in our factories and provide our services.  Consumers and shareholders do not benefit from policies which further exacerbate wealth and income inequities, nor do they benefit from policies and legislation which undermine the faith in our free market system.

Protecting the incomes of the economic elite does precious  little to prevent economic instability for the majority of American wage and salary earners.  Protecting the economic elite can never add to the total wealth of a nation as much as adding more willing participants in our markets…our housing market, our retail markets, our automotive markets, or in any other market.

In short, Senator Heller’s platitudinous palaver and vague rhetoric is bumper sticker speak obscuring the very real economic issues and the very real economic answers we should be discussing.

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Filed under Economy, Heller, Nevada politics