Some Checks Don't Balance Anymore

Chances are that you learned a long time ago that our American federal government consists of three branches; Legislative, Executive and Judicial.  You likely also recall that our Legislative branch (Congress) is made up of two bodies, the House of Representatives, and the Senate.  But have you ever thought about how wise the founders were in their design not only of the branches of the government but also in determining how those branches are populated?

Legislative Branch - The House of Representatives

As the name implies, the House was meant to be filled with Representatives of the population.  The idea was that the population of the country would be divided up into districts of approximately the same number of people (originally 30,000).  Each state would have at least one district but could have several.  The last time districts were “re-districted”, the average population per district was set at just under 711,000 per district, so, if your state had 7 million people, you’d have 10 districts, and send 10 representatives to the House.  For the most part, state legislatures determine how to create the district lines.

More so than any other branch or body, the House is the people’s branch, because the constitution envisioned that people would vote directly for their representatives, and the number of representatives was proportional, based on population. 

Legislative Branch - The Senate

Originally, the Senate was to consist of 2 Senators per state, to be appointed by the legislature of each state.  The 17th Amendment (ratified in 1913) changed that, to allow for direct election of Senators by the eligible population of each state. 

Why have one branch of the law-making body appointed, while the other is elected?  Think about the name of the country; The United States of America.  The Constitution envisioned that individual states united to create a federal government, with enumerated powers and responsibilities.  It made sense, therefore, that the people of the states should have some say, and that the legislatures of the states have some say as well.  In fact, had power not been given to state legislatures, and only vested in the population, our country would not have been successful in creating a Union of States in 1787.
It is unclear why so many states ratified the 17th Amendment, virtually giving away the balancing power the Constitution gave them.  This check became unbalanced when the 17th Amendment was ratified.

Judicial Branch

Originally envisioned to be the Supreme Court, with other federal courts as Congress might define.  The Judicial branch was established to rule on matters related to the Constitution and federal law.  Members of the Judicial Branch were to be appointed by the President, with the advice and consent of the Senate.  The power of the President to appoint the Judiciary was balanced by the requirement for the Senate to give their consent to the appointment. 

Executive Branch

This branch consists of the President and Vice President.  According to the Constitution, these positions are filled upon the votes of Electors, appointed by each state.  We refer to this as the Electoral College and it was meant to be a compromise between having Congress (the Legislative Branch) vote for the President, and a popular vote to select the President.  It is up to each state to decide how to appoint Electors, and how the Electors will vote.  There is no provision in the Constitution to even allow citizens the opportunity to vote directly for the President or Vice President.

The practice over the years is that each political party with a candidate running for President pre-selects a slate of Electors.  Once the votes in the General Election are tallied, the slate of Electors representing the candidate who received the most votes then goes on to cast their vote in the Electoral College.  These Electors almost always vote for the candidate to whom they are pledged. 

In Order to Form a More Perfect Union

The framers of the Constitution knew that a system of checks and balances was required and that the States were to play a significant role.  In the first census for our new country in 1790, 20% of the population lived in Virginia, and only 1.5% lived in each of Delaware and Rhode Island.  The framers knew that a system that was built purely on popular vote could easily be swayed by focusing on large population centers.  The system of checks and balances (state appointment of senators and the electoral college) was meant to prevent such influences.  The 17th Amendment of 1913 eroded the strength of the system, and now another threat is on the horizon.

Every Presidential election cycle, there is talk of changing the election of the president to be by popular vote.  Choosing this option would remove yet another balance from the equation.  Today, almost 20% of the country’s population lives in 6 Metropolitan.  Given that only about 60% of people eligible to vote actually participate in an election, only a little more than 30% of the total population must vote for a candidate for them to win.  A smart candidate with a lot of money need only focus on a few key cities, and mobilize a higher number of voters, and capture a higher percentage of votes, in order to win the race.

Now, some states are even thinking of passing laws that require their Electors in the Electoral College to cast votes for the candidate that receives the most number of votes nationally.  While this is theoretically permissible, it is not at all what was intended by the framers of the constitution.

The danger is that a large amount of money and influence can be invested in a small area in order to sway the outcome.  Money already plays a far too important a role in politics.  A move to expand the power of the popular vote will not only exacerbate that problem, but it will virtually disenfranchise voters in live in areas outside the largest population centers and states.

The framers had it right by dividing power across 3 branches of government and giving different voting rights to the population and the states.  While we have problems with our election process today, I believe that has more to do with money and the influence peddlers than it does with the way we select our leaders.  I always like to ask “what problem are we trying to fix” when we talk about changing something.  If the problem is money in politics, let’s address that directly, rather than tinkering with a system designed to be balanced.  If the problem is “my candidate lost, and the system isn’t fair”, pick a better candidate next time, and get out and work for them.  The unintended consequences of changing the system to satisfy today’s desire are likely to be oppressive.

Isn’t this common sense?

Welcome to the United States, Canada

As someone who holds both US and Canadian citizenship, I’m intrigued by the Canadian interest and passion about US politics.  If people from the US cared half as much about Canadian politics, and expressed their opinions as freely as Canadians do, there would almost certainly be an uprising in Canada against people from the US as interfering in their system, and expressing opinions about things they knew nothing about.  Interesting dichotomy.

Almost every one of my friends has expressed an opinion against the newly elected President of the United States, and expressed disbelief in the ability of the US population to elect somebody like him.  While I didn’t vote for him, I do believe that a freely elected person at least deserves a chance to prove themselves.  I hope others will do the same.

It seems like an appropriate time to remind those living in Canada of something a past Canadian Prime Minister (and father of the current Prime Minister) said when speaking in Washington DC:

“Living next to you is in some ways like sleeping with an elephant.  No matter how friendly and even-tempered is the beast, one is affected by every twitch and grunt”.

I don’t know that anybody could reasonably argue against the truth of this observation.  While Canada currently is its own sovereign country, its well-being and future are very much tied to and even dependent on the United States.  Don’t believe me?  Here are some fun facts:

• Canada’s GDP will be almost $1.6 trillion in 2016.  This is a measure of all the goods and services produced by Canadian companies, individuals and institutions.
• Almost 1/3 of the Canadian GDP is sold to other countries (exports)
• 75% of Canada’s exports are to the United States (approximately $393 billion)

Based on the above, almost 25% of the Canadian economy depends on having the US market buy their goods and services.

What if that disappeared overnight?  

President-elect Trump has spoken about changing / renegotiating the NAFTA agreement.  Would that hurt Canada?  Almost certainly!  Think about it for a moment.  Every time a good or service is brought into the US from Canada, it helps Canadian workers - one could argue that it is at the expense of US workers.  A good question to ask is what is the US buying from Canada that couldn’t be produced in the US?  There must be more than Ketchup potato chips and Blackberry phones.  What are the leading Canadian exports to the US?

•          $70 billion of mineral fuels
•          $55 billion of motor vehicles
•          $30 billion of services (travel, transportation, telecommunications, computer, and information services sectors)
•          $22 billion of food and agricultural products
•          $20 billion of machinery
•          $11 billion of plastics

Let’s look at a few of these.

The numbers for mineral fuels seems significant.  The total cost of mineral fuels used in the US every year is somewhere $700 billion to $1 trillion dollars, so the imports from Canada represent between 7-10% of US consumption.  However, the US also exports around $21 billion of mineral fuels to Canada, as it’s cheaper for Eastern Canada to get fuel from the US than from western Canada.  That brings the net impact of Canadian fuel imports to about 5% of US usage – a relatively small amount.  This gap could almost certainly be made up by a little more drilling (drill baby drill), and expanding the development of clean coal, as well as continuing development of alternative energy sources.  My conclusion is that the import of Canadian mineral fuels could easily be replaced by increasing US production.

The next biggest import is vehicles.  Really?  Why are American workers and factories not producing these?  This could easily be stopped overnight.

By the same token, there’s really nothing unique about the services imported from Canada.  Yes, the cost may be lower because call center workers in New Brunswick or Saskatchewan can be paid less than equivalent workers in the US, but the costing difference is marginal enough that US corporations could easily be incented to use American workers to fill these needs.  Again, and example of something the US imports that the US could easily provide for themselves.

And so it goes, down the line, through food, machinery, plastics, ketchup potato chips and Blackberry phones.  Much of what the US imports from Canada could easily be supplied by US workers and resources.  The question will undoubtedly be asked by a Trump presidency, “Why are we paying Canadian workers and companies to produce what US workers and companies could produce?” 

The impact of making these changes would be “huge” for Canada.  Many would lose jobs, many companies would be bankrupt, governments would have less revenue, and be unable to afford to supply the same level of programs to the population.  Making America great again could well come at the expense of the well-being of Canadians and Canada.

Of course, I would hate to see that, so what’s the answer? 

The US should simply buy Canada.

It happens all the time in business.  One company buys another in order to get products or consumers it wants.  Rather than cut off Canada, and cause irreparable damage to our northern neighbors, wouldn’t it be better to make them part of the same family?  Buying Canada would solve all the problems, and would be a decision that could more than pay for itself in a few years.

Under President Obama, the US national debt has grown by more than $9 trillion, and we have very little to show for it.  Let’s say we add another trillion to the debt, and use that to send a check (cheque) of $30,000 to every citizen in Canada.  Think of it like a signing bonus.  People living in the state of Canada would still keep their jobs, and their companies would still produce goods and services that the other 50 states would want.  Travel to the other 50 states wouldn’t require a passport, and people living in the state of Canada could naturally move to any other state they wanted.  Canadian taxes would be lower, and Canadians could write of the cost of the obscenely high mortgages.  

The trillion would be paid back, not only by eliminating the cost of imports, but by creating a new taxation stream for the federal government.

Presumably, the state of Canada would maintain several regional governments, roughly aligning with today’s provinces.  Those regions would be welcome to continue programs like health care for their populations, without any impact on the other regions in the state, or the other 50 states.

Talk about a win-win.  Canadians would no longer have to fear the elephant next door – they would be part of the elephant!

Now, if only I could get an audience with the President-elect to pitch this idea before he decides to just cut Canada off completely…

When Donkeys and Elephants Lay Together

There’s something reassuring about being able to predict a response or reaction. When we drop something, we know that it is likely to fall.  When we hit a beehive with a stick, we have good reason to believe that bees will become perturbed and seek to hurt us. When we go out in the rain, we anticipate getting wet. 

Knowing these things, we act accordingly. When something reacts in an unpredictable way, it can be more unsettling. Imagine your surprise if your car blew up when you tried to start it, or going for a prostate exam, only to find out you’re a male who’s pregnant. The current political climate in the United States causes this same kind of cognitive dissonance.

It used to be that one could predict how a given party would react to a given situation, regardless of whether they were in power or not. Think back to what you believed a few years ago, and try this simple test to see if you agree:

1. Name the party that believes government can do a better job than the private sector
2. Name the party that believes in the free market
3. Which party is more likely to raise taxes on the rich
4. Which party is more likely to lead us into war
5. Which party can be trusted the most?

OK, question 5 was a trick question, as history has repeatedly proven that both parties thrive on lying pathologically, but the other 4 questions were much easier to answer, when thinking back to the way things used to be. Why have things become so confusing in the last few years?

Government has grown in terms of expenditures and the number of employees under both Republican and Democrat presidencies. Bush (Republican) created the TSA. He and the Republicans also bailed out the banks and Wall Street, whom he and the Republicans argued were too big to fail, and he initiated the auto industry bailout. The Republicans also pushed to lower lending requirements so that more people could buy houses they couldn't afford, which contributed to the economic meltdown in no small way.

Now we have the Democrats wanting to lead us into a war that we have no business being in. Operating as if they were merely puppets with the hand of the military industrial complex shoved up their backsides, they argue that Syria has crossed a red line, and it’s somehow our responsibility to punish them for it. Secretary of State Kerry even pulled out an Adolf Hitler reference, so you know they’re serious. How could any reasonable person want an Adolf Hitler to go unpunished?

You know when a political party throws Hitler’s name around that they are feeling like they’re losing the battle…

Ignoring, for a moment, that the US used chemical weapons in Vietnam (ask our Vets and thousands of deformed Vietnamese babies whether Agent Orange was a chemical weapon), our administration and likely our congress will be asking us to intervene in another country’s civil war, where chemical weapons have been used by one or possibly both sides. Is this really something we need to be involved in? Who elected the United States as the keeper of the red line? If that is really our role, why did we do nothing when Iraq was gassing Iran and the Kurds in the 80’s? It’s not even clear that the International laws prohibiting the use of chemical weapons apply when the weapons are used within a country’s boundaries, as in the current civil war. Just what red line are we enforcing? For whom? Why is nobody else enforcing it?

What unintended consequences are we prepared to deal with if we blast a few Syrian sites?  What if we kill innocent civilians, including children? What if we uncover a large repository of chemical weapons, and we merely aerosolize them, which results in many additional casualties? What if our involvement only makes the situation worse? What if our involvement causes more harm to Americans?  How do we ameliorate any of these concerns? Can we really believe in the promise that says no boots on the ground? Refer back to question 5.

I don’t buy the notion that this isn't a declaration of War. Of course we’re declaring war, even if congress doesn't pass anything saying so. Disagree? What if any country in the world decided to blow up some of our military installations via a precision-guided strike? Wouldn't we consider that an act of war and immediately seek to fight back? Of course we would. Oh wait, that already happened. It’s called Pearl Harbor…

Let’s imagine a best case scenario. We bomb a few bunkers where we think the Weapons of Mass Destruction (oops, wrong war), I mean where there’s a stockpile of chemical weapons, and it turns out that our oxymoronic military intelligence was actually correct, and there were chemical weapons there. What now? What did we accomplish? Which side did we strengthen? Did we actually help an Al-Qaeda backed insurgency? Have we learned nothing in the past 35 years?

There is no best case no scenario – only bad, worse, and worser. We as a people gain nothing by involving ourselves in this conflict, and it should be clear to all that we risk a great deal, including what will be increased terroristic threats.

It doesn't surprise me that the military want to fire their guns, or that the industries who support the military can weave a good sounding story about why we need to do it, but what blows me away is that it doesn't matter who’s in power any more. Wasn't it the Democrats just 10 or 11 years ago saying that we had no business going into Iraq (or some argued Afghanistan). We can’t even rely on the Democrats to object to war anymore. 

You may be curious about the title of this posting. In my mind, I picture the symbols of both parties. It’s pretty easy to tell the difference between a donkey and an elephant, but I honestly have trouble remembering which animal belongs to which party. With all the muddling of the lines between the parties, and confusion about who stands for what, and what animal belongs to whom, I really believe that both parties need to adopt some new mascots, and would propose the following:

With this mascot, we'd be a lot less concerned about who's on the left and who's on the right, because we know that it's simply a matter of perspective.

We desperately need a new animal in Washington. One that has some Common Sense, and isn't afraid to use it...

What Makes a Marriage Gay?

There’s been a lot of talk recently about gay marriage.  Perhaps there should be more talk about how poorly we communicate, and how we’ve forgotten most of the lessons learned in school about the English language.  A marriage can’t be gay – it’s the individuals in the marriage that are gay, but I’ll save the grammatical distinction for another post.

 

 

I suppose all the conversation is really about same sex marriage, and whether it should be legal.  Many who are against same sex marriage cite religious reasons, and state that “God created marriage”.  Supporters of same sex marriage take the position that denying a same sex couple the right to marry is discrimination.  Any time a topic become this heated, logic seems to take a back seat in the bus to passion, and who can yell the loudest, while making disparaging comments about the other side.

I won’t undertake the question of whether or not God created a marriage – it’s a question to be answered by each individual, influenced by their beliefs.  I would argue that whether or not God created marriage is not the point at all.  Same sex couples are not arguing the case before the Supreme Court because they want God to bless their marriage – they simply want the government to allow it.

Today, marriage has been made into a civil institution.  Almost every marriage must have a marriage license, issued by the government, to be recognized by the government as a valid marriage.  Divorce is the commonly recognized (and sought) end to a marriage, and is granted by the courts. Married couples have different laws that apply to them – by one count, over 1,100 federal laws, statutes and rules.  While marriage may have started as a religious institution, we have allowed it to become a civil one, and therefore governed by the laws of man.  Unlike other sacraments of the church (baptism, communion, confirmation, etc.), the church allowed marriage to be taken over by the government.

There’s an old saying that says “what’s good for the goose is good for the gander”, which I’ll use in this blog to say that if married couples approve of, or seek the benefit of the laws that recognize a married couple’s status, then it’s hypocritical to claim that marriage belongs to the church and not the state. 

The recognition of same sex marriages is an inevitable and logical conclusion.  Since so many laws have been created to benefit married couples, the government will be forced into a position where it must eventually acknowledge same sex marriage as lawful, just as it did with interracial marriage.  To not recognize those marriages is a discriminatory practice.

It’s hard to imagine, but as recently as 1948, 30 states had laws against interracial marriage.  Interracial marriage was finally legal in all 50 States on June 12, 1967. Most people would think it unimaginable that interracial marriage would have been illegal in 16 states just 46 years ago, however, according to a 2011 Pew Research study, 16% of evangelical Christians still thought interracial marriage was a “Bad thing for society”.

Whether or not something is bad for society has little to do with the law.  Can anyone really argue that alcohol or tobacco are good for society?  Yet we have laws that protect these things, and generate huge amounts of taxation as a result of their consumption. Are some of the inane TV shows, movies and video games now available good for our society? Arguably not, and yet there are no laws prohibiting them outright.

It is to a large degree a measure of our freedom and liberty that so many choices are left to the individual rather than the state. The more laws there are, the less liberty we have, and the more likely we are to approach the threshold of a tyrannical government.

Should we do all things that are legal?  Certainly not.  With individual freedom comes individual responsibility, and the thresholds that each of us have should keep us safe from the precipice of illegality. To not accept individual responsibility means that we are ceding that responsibility to the government, which is why the number of laws in our country have grown to an unknowable number, as explained in an earlier blog post.  

But where does the ever-expanding scope of who can get married stop?  Today it’s illegal for people under a certain age to marry.  It’s illegal for people who are immediate family to marry (parents, siblings, and children).  Both polygamy and polyandry are illegal.  Marriages with non-humans are not recognized as legal.  Certainly, however, in our not-too-distant future, many of these boundaries will also be tested, and likely broken, all for the sake of equality, and the elimination of discrimination.

It seems to me that the better course of action is to reduce the number of laws, rather than increase it.  The more complex a system becomes, then the harder it is to manage it, and it continues to grow until it fails.

If federal law didn’t have 1,100 special rules for married couples, would we even be having the discussion of whether same sex marriage should be legal? If there were no laws that benefited married couples, would there even be a need to argue about what a legal marriage should be?

If someone is a homosexual, who am I to say whom they can love and spend their lives with?  If they seek to enter into a “marriage contract” like my wife and I have, they should be afforded all the same rights and privileges that contract affords.  Should a church be forced to conduct a marriage ceremony for a same sex couple?  Certainly not.  Is same sex marriage good for society?  It’s certainly no worse than alcohol, pornography or violent sports and video games, and if the relationship is really based on love, it would seem to me that it could do more good than harm, inconvenient as that may be for some to acknowledge.

Don't Shoot the Mirror

It’s been a couple of weeks since the awful, senseless murders of 20 defenseless school children and 6 teachers at a grade school in Connecticut. I can’t imagine the fear in the minds of those innocents moments before their lives were taken, nor can I imagine the overwhelming sense of loss of parents and family of those left behind. Nothing we say, think, pray, or legislate will bring the lost back, nor hold the guilty accountable in this tragic event.

I’m hesitant to share my opinions on this matter at this time, out of respect for the memory of those lost, and for their survivors, however, some are trying to leverage a tragedy to promote their own, largely political agendas, and so I feel compelled to write, not so much with a solution that would have prevented that massacre, but with some thoughts to promote examination of what we believe and why.

It’s only natural that as a society, we want to find ways to prevent this type of tragedy from happening again.  Since the lives were taken by firearms, it seems easiest to begin there, and look to limit the availability of firearms to the general public.  We also believe in the notion that the government’s highest purpose is to protect its citizens, and so it seems logical that we would look to our government to solve the problem of too many guns killing people, and enact laws that would make gun ownership illegal.

I believe that that approach, while sincere, is misinformed, and is focused on the wrong problem.

Though that statement may make me sound like a gun nut to some, I must confess that personally, I don’t understand the infatuation that we Americans have with firearms.  I think that in many respects, we’re a society obsessed with firearms. One only has to look at our televisions, theaters and video consoles to see how popular gun-themed entertainment is. Watch a bunch of boys playing and you’ll often see pretend gun play. We buy our kids toy guns. Many parents keep real guns in the home, taking their children to the firing range, so they learn gun safety at an early age. Our news channels run continuous coverage when something awful involving guns happens. Our music promotes the “gangsta” culture.  What impression does all this firearm exposure have on young minds?

Hunting is commonly accepted as a virtuous sport. Really? Shooting an animal in the wild doesn’t seem like much sport to me.  Hand-to-hand combat would be more sporting.  Hunting animals seems like a very close cousin to the Hunger Games - animals today, humans tomorrow. Maybe one group of hunters should dress up like deer or moose and run through the woods while another group of hunters try to kill them.  It would be more sporting, since both groups are aware of the “game” and how to “win”.  Maybe that would be a good Darwin-ian solution to part of the gun problem.

While I believe that we as a society have gone overboard with guns, and that resulting gun violence is the unfortunate result, I don’t think that having the government making more guns illegal will solve the problem.

By-in-large, having the government control or regulate anything is almost a sure sign that the problem will continue, and possibly get worse.  Consider the following:

·         The CDC says that smoking causes 1 in 5 deaths every year, and that, “More deaths are caused each year by tobacco use than by all deaths from human immunodeficiency virus (HIV), illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined”.  Tobacco is heavily regulated and taxed by the government, yet it remains a huge killer, including of the innocent through exposure to second-hand smoke.

·         The government has focused heavily on preventing illegal drug use, spending in excess of $40 billion a year, causing 1.6 million arrests. Approximately 25% of our prison population is made up of drug law offenders. The problem continues to grow, however, and the number of deaths each year attributed to illegal drugs is approximately 1.6% of all deaths in the US.

·         Alcohol (again, a largely regulated and taxed vice) is directly responsible for approximately 1% of all deaths in the US

·         The wheel. Government is involved in all aspects of transportation, from levying taxes on fuel, to building roads. They have a whole department charged with enforcing safety, and yet transportation accidents account for almost 2% of all deaths in the United States.

·         Gun control laws are much stricter in Mexico, where it is virtually illegal for an ordinary citizen to carry firearms in public, however, their rate of murder by firearms is almost 3 times higher than that in the US.

·         For the purposes of comparison, the number of homicides caused by guns each year is less than half of one percent of all deaths in the US

Almost 25% of the deaths in the US each year come as a result of things that the government already regulates and taxes.  Underage kids still smoke and drink, even though it’s illegal for them to do so.  Millions of Americans have been arrested over the past few years on drug charges for drugs already made illegal. Simply making some guns more restricted or illegal will have little effect on keeping weapons out of the hands of those who mean to do harm.

Is the problem really the gun, or is the problem that we have encouraged a society of people to accept guns?

I understand that the 2nd Amendment protects citizen's rights to own and bear arms, but there was a thought and purpose behind that amendment - it was so that citizens could form local militias and protect themselves against a corrupt government.  But c'mon, if the government really became THAT corrupt, do we seriously believe that the weapons we might have in our homes would defend us against the weapons that the government would have? Not a chance.  It's not a musket against a musket anymore. Keeping guns in our homes to protect us against a corrupt government is fanciful at best, and lethal at worst.

I don't believe that there's an immediate solution to the gun issue - I believe it's a solution that begins with each of us and our attitudes to guns and violence in our lives, entertainment, and recreation.  There's some truth to the notion that we reap what we sow. The solution to the gun problem begins in the mirror, with how we chose to handle ourselves in everyday life. Do wee flee from violence, or look upon it as a voyeur?

Finally, I think our approach to mental health is a key to this issue.  Many have talked about having a mental health test as part of the permitting process.  Really?  And what do we do with those who fail?  Deny them a gun or provide them with help?  We spend hundreds of billions of dollars a year on health care for people with preventable diseases, yet how much do we invest on promoting and improving the mental health of our population. 

Mental health is perhaps the most stigmatized area of health care. As a society, we do an extremely poor job of aiding those with mental issues.  Again, perhaps we're reaping what we're sowing.

Making more kinds of guns illegal is simply sticking our heads in the sand, ignoring the real issues.  Until we deal with the real issues of violence and mental health, vicious senseless murders will continue by whatever means are available.

Really - isn't it just Common Sense?

In one word, what could the government do to help the economy?

We tend to over complicate things. Sometimes, it's out of a need to absolve ourselves of responsibility for either causing or solving a problem. Other times it's so we can self-aggrandize our role in the solution, or to achieve more power where there may be a vacuum. Making things more complicated is almost never the right answer in finding a solution. In that vein, what could the government do to help our economy?

Less.

Consider the following cartoon. Rube Goldberg was a famous cartoonist who had a penchant for designing complicated solutions to simple problems. The cartoon below depicts a man who has invented a mechanical means of applying toothpaste to a tooth brush.

Obviously the solution is much more complicated than the problem.  Just squeeze the tube!  But for whatever reason, the inventor thought it would be better to invent a mechanical means to do this.  How much easier just to use the toothpaste tube in the way it was designed!

The economy in the United States is based on a system of free enterprise and capitalism.  People who have money will risk and invest it in businesses as capital when they have the confidence that the return they will receive on that investment will exceed what they could get elsewhere or with less risk.  The government's role in this equation is simply stay out of the way and not erode confidence.

Look through history at the cycles of economic boom.  Following the civil war, the US economy went through a huge boom, so that by 1890, the US had a higher manufacturing output than Britain.  Men like Rockefeller (oil), Morgan (banking), Gould (railroads), and Carnegie (steel) were not constrained by federal regulations or interference, and created huge industries and jobs.  Another economic boom occurred in the roaring 20's, helped by automation
introduced by moguls like Henry Ford, and further fueled by the reduction of taxes by the federal government.  Look again to the period after WWII, the mid 60's, the early 70's, the Reagan era, and the tech boom.  Not one of these booms was caused by the government creating jobs or raising taxes or creating more laws or regulation.

In fact, we can look at the busts in the economy, and we'll often find that they were preceded by periods of large government growth, spending or regulation.  Had the Bush government not pushed so hard to open home buying up to more people, would banks have written so many bad loans?

When government action erodes the confidence of investors, investors invest less in that economy.  The current continued poor economy can be accurately interpreted as a lack of confidence on the part of investors in their opportunity to earn a good return on their investment.

So what should the government do?  Less.  Simply stop tinkering with the free enterprise engine, and focus on actions that will build the confidence of investors. 

• Show a commitment to spending less, or doing more with less. 
• Find ways to make it simpler for the average business to succeed, not harder. 
• Reduce the size of government until the Federal Government is no longer the nation's largest employer. 
• Lower the corporate tax rates so that they aren't the 2nd or 3rd highest in the developed world

All of these suggestions are in aid of creating investor confidence - to demonstrate that the federal government is not looking to replace the free enterprise system as the economic engine of this country.

If the government's answer to our current woes is to do more, and attempt to put people back to work by creating jobs, it will further erode investor confidence, and create an environment where people become more dependent on the government. Economists are divided on whether the public works projects of the mid-30's had a lasting positive or negative impact on the economy.  We can't afford that type of investment at this time anyway, so it shouldn't even be a consideration.

The answer for our country at this time is to simplify the federal government's role in business, and not to create some Rube Goldberg contraption to solve a problem that the writers of the Constitution never intended for the federal Government to solve.  In this case, it's just common sense that less is more.

Who's to Blame for the Federal Debt? (Pt. 2)

The first part of this two part blog explored how our spending habits as individuals play a big part in the growth of the federal debt.  This second installment will explore more of the technical reasons of how it has occurred, and end with some ways that we can begin to better manage it.

First, allow me to explain two things this blog won't do.  Firstly, it won't attempt (at least knowingly) to manipulate statistics to prove a point that's consistent with my agenda.  There are three kinds of lies:  Lies, damned lies and statistics, and it's my intention to prevent lies from tainting any facts that I share in this blog.

Secondly, it won't attempt to turn this into a political issue, at least not republican versus democrat.  Some people spend a lot of time trying to point the finger of blame from one party to the other.  It reminds me of the Dr. Seuss story of the Sneetches.  Many people may not know this story, which usually is meant to teach about prejudice, but I think is also a good way of thinking about dyed-in-the-wool Republicans and Democrats.  You can see a brief recap of the story here.

The Sneetches

As you'll see later on, neither major political party in the United States can point a finger of blame.  Both parties have succumb to the siren call of power that comes with spending huge sums of money, and it really makes one wonder whether change can really happen within the present two party system.  But perhaps we'll leave that for another blog.

So what does Franklin Delano Roosevelt have to do with today's almost $15 trillion federal government debt?  Here's where the facts come in.

The first federal debt was recorded on January 1, 1791, during George Washington's first presidency, and it was just over $75 million - not bad for starting a country!  Washington became president in 1789.  A presidential election occurs every 4 years, so let's spend a moment looking at what's happened to the debt in those 4 year cycles.

In the first 144 years (or 26 cycles of presidential elections), our country went through a period of nation building, land acquisition, civil war, foreign war, health epidemics and economic depressions.  During that period, our debt as measured at the end of a 4 year presidential cycle:

• Increased 17 times
• Decreased 19 times
• by June 30, 1933, the debt was under $23 billion.  $18 billion of that increase came during the years of World War I. 
• While seemingly a large increase, as the debt was now about 306 times larger than in 1791, it only represented an increase of approximately $160 million per year each year. 
• If the debt had continued to increase at that rate, it would now be about $35 billion.  Of course, it's slightly larger than that!

The other key thing to note is that the number of times the debt increased was fewer than the number that it decreased - it was cyclical, and for the most part, fairly balanced.

From 1933 to 2013 (yes, it's safe to predict what's going to happen in the next 18 months), the debt:

• Increased 19 times during the 4-year cycles we're looking at
• Only decreased once (after the end of WW II). 
• The debt increased an average of $187 billion per year - a huge increase. 

Something happened 80 years ago that led the government to believe it was OK to always spend more than it collected.  What happened? Is it even legal for the government to borrow money (or spend more than it collects in revenue)?  The short answer is yes.  Article 1 Section 8 of the Constitution allows congress to borrow money.  It also authorizes Congress to spend money it collects and borrows to "provide for the common Defence and General Welfare of the United States".  And that's where the problem lies...

What constitutes the "General Welfare" of the United States?  That simple question has no simple answer, and even two prominent authors of the constitution (Madison and Hamilton) disagreed on the interpretation.  Of course I have an opinion, but my opinion doesn't count for much.  Unclear constitutional issues require clarification through constitutional amendment, and that's one of the solutions our country needs to pursue in order to get our national debt under control.

What is clear is that up until about 1936, the Federal Government took a fairly narrow view of what General Welfare meant, and the Supreme Court was fairly consistent in its support of that definition.  In the 1930's, a number of programs were introduced (National Industrial Recovery Act, Agricultural crop payments, Social Security) by FDR, and quickly met challenges that rose to the Supreme Court.  Because the Court took a fairly narrow view of what "General Welfare" meant, it ruled against the programs.  FDR had enough, and threatened to stack the court with justices that would deliver his brand of justice.  His justification, as quoted from his second Inaugural address in January 1937:

"I see one-third of a nation ill-housed, ill-clad, ill-nourished.''

By May of that same year, the court reversed its view on General Welfare, perhaps as an act of self-preservation, and in what is now called the "Switch in time that saved nine", judged in favor of two "New Deal" cornerstones - unemployment tax, and old age benefits as part of Social Security. 

Those decisions launched the seemingly unstoppable juggernaut of federal spending and the growth of the federal government, as well as the creation of numerous entitlement programs. No presidency since then has taken any meaningful steps to either rein in federal spending, limit deficit spending, or more completely define what General Welfare means.  Without a clear definition of that single term, any future government could find a way to justify almost any action.

The other key point to remember is that any power given to the Federal Government means that it is taken from the local state government.  Our country was founded as a Republic of United States, giving all power to the states, except those powers enumerated to the Federal Government.  What has happened over the past 80 years is that the power and importance of the individual states has been compromised in favor of consolidating power into a centralized government.

Isn't that what the Revolution sought to correct in 1776?

Before concluding with a couple of steps to resolve the issue, let's quickly examine whether the last 80 years has seen  improvement on the issues Roosevelt saw as a threat to the country (ill-housed, ill-clad, ill-nourished).  After 80 years of ever expanding federal government control and spending, we would expect to see some pretty amazing results:

• Unemployment is at it's highest level since 1948, with almost 10% of the workforce looking for work.
• Foreclosure rates are at an all time high, and have been on the increase for decades.  Almost 1 million homes have been foreclosed on this year
• There are almost 48 million people receiving food stamps (US Debt Clock)
• 66 million people receive Social Security retirement &/or disability benefits (US Debt Clock).
• There are over 20 million government employees at the federal, state and local levels.  That's about 15% of the total work force (US Debt Clock).
• The average American household’s credit card debt in 1990 was $2,966. In 2007 it was $9,840.
• In the late 1950's, the poverty rate was 22.4%.  In 2009, the rate was 14.3%.  In spite of how bad our economy is doing, poverty is nowhere near what it used to be.  The poor are definitely less poor.

There's an old saying: "Give a man a fish and you feed him for a day. Teach a man to fish, and you feed him for a lifetime".

I'm concerned that more and more people are relying on the government to get fish.  Poverty has decreased, but how is that possible when so many other metrics are out of whack?  I think we've taken the notion of general welfare way too far when such a high percentage of the population RELIES on getting money from the government.  What would the poverty rate really be if it weren't for ever-increasing government expenditures on entitlements?

That's the key word, that we heard so often in the debt ceiling crisis - entitlements.  Should entitlement spending be cut?  Here's a better question.  Who says anyone is entitled to anything in the way of money FROM the government.  As citizens, we are entitled to certain rights, freedoms and liberties, but I certainly don't think that I'm ENTITLED to any of your (or your kids) tax money.  The fact that we use the term so often and without convulsion is a true sign of our system illness.

All right, time to wrap this up.  What can we do to fix the problem.  Here's 2 steps:

1. Make it illegal for the federal government to spend more than it earns, except under dire circumstances.  Since the clowns in Washington can't be trusted to define dire, such over spending would require a majority vote in a national referendum. 
2. The term General Welfare needs to be defined in the constitution, by way of an amendment.  We've seen what 80 years of letting politicians decide what is best for us has accomplished.  It's time to reign them in.

Both these solutions would require years to  implement since constitutional amendments are required, but the time to start holding our elected officials feet to the fire is now!  At a minimum, if someone seeking office will not stand up and say that they'll work towards a balanced budget amendment, they don't deserve your vote, and they certainly don't deserve the right to spend your current and future tax dollars.

We can't continue to spend more than we earn, either as individuals or as a country.  It's simply common sense.

Who's to Blame for the Federal Debt? (Pt. 1)

Tune in to almost any news commentary show these days, and at some point in the program, you're likely to hear talking heads going on and on about who is to blame for the hemorrhaging federal debt.

One group says that Bush more than doubled the debt left by all the presidents before him, so he's to blame.  Another group says that Obama is the most reckless spender every to occupy the office of President, and his goal is to create a European Social Welfare state.  So what's the truth?  Who's to blame?

You are.  Oh, and Franklin Delano Roosevelt.  Bush and Obama are simply following the lead, but more on that later.

OK, first a word of warning.  In order to talk sensibly about this, there needs to be a little math thrown in.  Most of us get annoyed (and a little freaked out) when we see either really huge numbers (is that billions or trillions) and decimal points, so to simplify things, I'm going to use round numbers.  Don't rely on my numbers being absolutely accurate - if you're that interested, you can do the research yourself, but I assure you that the numbers are close to being accurate.

Also, many of the numbers and definitions used can be found on the website US Debt Clock. 

Finally, to try and bring some context into the discussion, I'll be drawing parallels to our personal financial experiences.  While it's overly simplistic to compare a country to an individual or a family, the fundamental principals aren't all that different.

When you think about finances of a country, one of the most important numbers to understand is the Gross Domestic Product (GDP).  For most of us who work and earn a salary, the GDP should be easy to understand.  It represents the value of the goods and services produced within the US per year, just like your salary represents the value of the service you provide to your employer in a year.  In August 2011, that number is close to $15 trillion.  In other words, we as a really big family earn about $15 trillion a year.

So let's come to understand the first part of the blame game, and that is that you're really the one responsible for the mess the federal government is in.

Huh?  I didn't tell Obama to create a health care entitlement we can't pay for.  I didn't tell Bush to fight wars against third world dictators.  Why is it my fault?

Imagine:

• You have a job where you earn $48 thousand per year (GDP). 
• You owe $176 thousand (US Total Debt)
• You have to pay almost $12 thousand of interest every year in order to pay that debt?  25% of your pay is going just to interest! (US Total Interest)
• The total value of everything you own (house, cars, jewelry, savings, retirement plan, stocks) is $244 thousand. (Total National Assets)
• You have kids that you have to pay for when they go to university and get married, and you're also going to need to have money for when you retire.  That future obligation that you haven't saved for is $370 thousand.  (US Unfunded Liabilities)

How can you possibly pay for all your obligations on your income?  You're not drowning yet, but you can see the water rising.

Keep in mind, these numbers have little to do with the Federal Government and taxation.  They have to do with how we as citizens earn and spend our money.  The comments in brackets show the equivalent categories on a national level, as found on the US debt clock, divided among all the population of the US.

This is basically where we're at in the US, and we're in bad shape!

As individuals, we borrow a lot of money to buy expensive homes and cars, and we save very little.  This year, over 1 million people will lose their homes to foreclosures.  We have a lot of future expenses that we haven't even begun to save for, like education, weddings, retirement, and our health.  We set a very poor example for our government to follow.  In fact, if the government tried to do the opposite, we would probably rise in revolt.  We borrow today in the hopes that we'll earn more or invest better tomorrow, but as we've seen lately, that doesn't always happen.  And if it doesn't happen, many of us secretly hope that the government will be there to bail us out.  If we're not responsible enough to look after ourselves during good times, why do we expect that someone will look after us during the bad times? 

The National debt is really just a mirror of what's going on in our personal lives.  The Federal government has borrowed almost $15 trillion dollars, because it has been paid less than it has spent.  That's $47 thousand per each person in the country.  Just this year, the government will spend about 164% of what it collects.  We've set a bad example for our government.  So what's the first step to fix the problem?

Personal Responsibility.

As individuals, we need to get our financial house in order.  We need to spend less, save more, and live within our means.  It's a little hypocritical to expect our government to act one way, if we each act the opposite way.  The beginning of the solution starts with us.

It's up to us to save for the future.  The average American citizen has $1,800 in savings (liquid assets, like bank balances).  That's two weeks salary.  If we were committed to saving 10% of every dollar we make, we would triple the amount of savings we had by the end of the first year.  Another way of saying that is that we only allow ourselves to spend 90% of what we earn.  In other words, we commit that we will each spend less than what we earn, and put the difference into savings.

We don't have a problem that we don't earn enough, we have a problem that we spend too much, and that we don't save enough.  We're a nation of too many grasshoppers and too few ants.

It's no wonder, then, that the government has the same problem we do.  Once we start saving and spending less than we earn, we begin to hold ourselves more accountable for our own financial future, and once we do that, we begin to expect the same of others, including the government.  We don't expect anyone to bail us out if our poor decisions get us into trouble, and we therefore begin to look less favorably on spending government revenues on bailing out large banks and corporations, or on giving food stamps to 47 million people. 

Let me wrap up part 1 by confessing that I lived most of my life as a grasshopper.  I always believed that I would have ever increasing earnings (at least until I got really old), and so that if I spent more today, I would earn more tomorrow to pay it.  I remember talking with a friend of mine once, who happened to be a minister.  He asked if I had a budget.  I kind of snickered, and said I really didn't have one, and didn't think I needed one, because if I found that I didn't have enough money, I would just earn some more.  I wasn't a teenager when I said this - I was in my mid 30's. Things were going well for me, but I wasn't saving, and planning for the future, I was purely living for the day.

I'm different now.  There's a saying "Too soon old, too old smart", and that's true for me.  I live much more simply now than I did, earn a lot less, but I also owe a lot less, and should be debt free (except for a house mortgage, which is about 1.5 times our family income) within the next 12-18 months.  My kids did not inherit my grasshopper genes, and I'm thankful that they are much more disciplined about money than I ever was. 

It's up to each of us to do what we can so that we can be financially independent, and not look for big brother or government to bail us out.  The fact is, though, that many people expect the government to help them when they get into trouble.  After all, the government can simply take some of the money from the people who did plan and save, and give it to those who have a greater need. When did that start and is that something that our constitution even allows for?

Well, that's where FDR fits into this picture, and that's the second part of this story.

The Fifth Estate

With the advent of a free press and especially the Internet, countries which constitutionally protect Free Speech are actually best poised to have smaller governments, and are able to shift the responsibility for much of the protection provided by the state, to the people, where it belongs.

Think, for a moment, how many laws we have in the US.  The federal government has laws, knows as the US Code.  Agencies can pass laws, known as CFRs (Code of Federal Regulation).  Every state has it's laws, and every county and local government has it's laws. 

For the purposes of this blog, I'm going to ignore a certain class of stupid laws on the books. We all know the ones I'm talking about, as we probably see them from time to time on the Internet, or learned about them in a public school law or civics class. They're the laws that say it's illegal to drive in a car with an uncaged bear, or require all homeowners to own a rake, or stupid stuff like that.  Though good for a laugh because they make you scratch your head and wonder aloud "what were those silly politicians thinking when they passed this", I'm not going to focus any further on those relatively few laws.

Ask a knowledgeable person the following question: "How many laws are there in the US?"  If the person is really smart, they'll give you the one right answer, and that is that nobody knows! 

Let's imagine for a moment, that we could collect all the laws in book form, and the imagine all these laws in books on a shelf!  Just the US Code, and the CFRs in bound volumes occupy over 375 inches of shelf space.  That's over 30 feet of shelf, just for federal laws and regulations.  Compare that to the picture below:

This one book, from 1925, contained all the federal laws at the time, and was only a few inches thick. That means that we've added over 4 inches of laws each and every year of the past 86 years since this book was printed!


What has happened?  Have we lost our minds? Have we become a nation of water-heads that needs the protection and guidance of a benevolent big brother at every turn? Are we really any better off for all these laws, and the requisite policing and enforcement that comes with them?  What freedoms and liberties have we sacrificed by allowing ourselves to be so "ruled"?


I think this is where the Fifth Estate can play an important part.  First, a quick definition.  The Fifth Estate is actually an undefined, though oft-used term, and is generally considered to be all that which is not comprised of the other 4 Estates, namely:

• Clergy is the First Estate
• The nobility is the Second Estate
• The commoners are known as the Third Estate
• The press is the fourth estate

In today's common use, the Fifth Estate is often thought of as the blogosphere and networked individuals.  If you're reading this, you could be part of the Fifth Estate!


So what does the Fifth Estate have to do with reducing the number of laws?  Think about all the laws that companies have to follow.  Labor laws, environmental laws, safety laws, trade laws, competitive laws, export laws, import laws, tax laws, etc.  Laws governing companies and business are so numerous that they add extra cost to the products sold or services delivered by those companies.  But what's the alternative?  The most effective law, in a free enterprise and capital-driven society, is the law of competition, but how could that be best leveraged?


Let's look at a few examples.  Consider a restaurant.  Government health inspectors visit the restaurant on an infrequent but regular basis to make sure that the restaurant is safe and sanitary.  Is this really something the government needs to do?  Let's say that there were no more health inspectors.  The local International House of Schwarma decide they want to save money, and turn the heat lamps down low, serving tepid schwarma to their clientele.  Dairy products are also left out on the counter, and the high school kid who runs the fryer doesn't wash his hands after going to the bathroom.  A couple of weeks later, someone gets sick and thinks it's from their visit to the IHOS.  A week later 5 more people get sick.  In today's day and age of social networking sites and Internet, how long would it take to get the message out that the local Schwarmary is substandard?  Business would drop off very quickly, and the head of the IHOS would have to clean up their act quickly, or go out of business.


Now, let's think of a manufacturer. Imagine that we didn't have all the reams of anti-pollution laws that are on the books.  How could we be protected from a manufacturer who decides to dump their waste into our environment?  Competition and information is the answer.  If a number of people take exception to what that producer is doing, then fewer people will buy their products.


Of course the fly in the ointment here is that taking big brother out of the equation means that we all need to be more responsible consumers.  More organizations, like Consumer Reports, ePinions, Angies list, and sites like that could spring up.  The value to these sites is that real people can contribute to them, and that businesses would have a chance to respond to both the boquets and the brickbats.


Just like on web searches, some companies and websites show up because they pay to be there.  Sites that charge for either users to contribute their feedback, or companies to respond, or place higher on satisfaction scales, are worthless sites, and should be sent truckloads of tainted schwarma. 


My point is that we need to find ways to limit laws and government involvement, in favor of competition and disclosure.  Now that we all have the tools of free public speech delivered in a timely fashion, we have an unprecedented opportunity to take more responsibility as individuals.  The voice of the individual is more powerful than ever before.  One only need look to the world events in places like Egypt and Iran over the past year to see how true that is.


Even with all the laws, companies still sell tainted food, and companies still pollute, so it's not like we'd be throwing caution to the wind - we'd just be changing the ultimate punishment.  Rather than a fine that goes to the government, the penalty to the offending company would be the ultimate price - no customers.


Critics will say that it's too easy to "plant" a lie about a company, or to exaggerate about a problem, thus unfairly impacting a company's business.  The solution is to allow companies to respond and defend themselves.  Recently, we traveled to a city, and looked for a hotel using one of the popular travel sites that gives reviews.  We quickly narrowed our search down to one particular hotel, and read a selection of the best and worst reviews as well as some in the middle of the road.  What impressed us the most was the number of positive reviews as compared to the negative.  The next most impressive factor was that the General Manager took the time to respond individually to criticisms.  Had the person complaining taken the time to raise the issue at the time of their stay, it seemed clear that the GM probably would have solved the issue.  We booked our stay, and were very pleased.


Our freedom of speech is a tremendous liberty that we abuse because so many fail to exercise it for the common good.

Of course we could allow the government to look for more ways to control everything in our lives, while we relinquish more of our freedoms.  Stories like this, about some girls and their lemonade stand, would become more the norm, the government would grow larger, lawyers would become better paid and more abundant, and our economy could further stagnate because we've just made things so dang complicated.

We don't need to be protected by some authority that could just as quickly turn against us.  We need to take the responsibility that comes with our freedoms, and take charge.  It is supposed to be a Government of the people, by the people and for the people, not a Government over the people.


It's just common sense.