Fix Debt Ceiling
These are frustrating times. The country is in crisis and elected "leaders" are not leading. The Tea Party is asserting significant pressure on Washington representatives to make knee jerk decisions to correct the many neglected issues in this country at the risk of creating calamity. The Tea Party has awakened the country to the serious fiscal problems it is facing. However, Instead of throwing tea overboard, we are at risk of throwing this great nation overboard. The Tea Party has done us a favor by bringing these problems to the forefront; now we need them to act responsibly.
Tea Party members, the party financed by Rupert Murdock, the Koch brothers and other super wealthy individuals, are correct; this country needs to get its fiscal house in order. We have lived beyond our sustainable means for more than a quarter-century and it is clear this must change. However, it is too important of an issue to address while under the self-imposed pressure of debating whether to raise the debt ceiling.
We must raise the debt ceiling now because we have a legal and moral obligation to pay our debts and if we do not we will be the biggest losers. If the ceiling is not raised the country will default on its monetary obligations to its citizens, individuals of other countries and other sovereign nations. It is not realistic to think that there would be no worldwide ramifications to the United States failing to meet its financial obligations. This event would lower the countries standing in the eyes of the remainder of the world and reduce our ability to compete and influence fellow citizens of this planet. Our world will never be the same, as we know it. Our children will live in a country having less control of its own destiny and outside forces will be able to dictate our future.
Next, The Tea Party must keep the pressure on so Washington addresses our fiscal problems now and not allow politicians to wait for the election results of 2012. There is general agreement that the nation’s expenses need reducing; the question is how and where. There is far less agreement on the revenue side. The revenue issues include:
1. How much revenue does the government need and/or should it get?
2. What can government do to raise the total income, the GDP, of the nation?
3. Should we raise the tax rates of the wealthy?
4. Can we/should we fix how income in this country is distributed between the wealthy, middle class and poor?
The government needs to change how it budgets. We no longer can decide what we want to spend, figure out how much revenue will be coming in and borrow the rest. We must start with our expected revenues and then decide how we should best spend those revenues. There will be times when expenditures will be greater then revenues, such as wars or during an economic downturn. In these times, we will need to borrow, but only after much debate, consternation and with a plan as to how to repay the debt.
We would not be discussing whether to raise the tax rates of the wealthy if the distribution of income in this country were more in line with what it was historically as shown by the graph to the left.. According to the McKinsey Global Institute, giant Multi-National Companies (MNC's) accounted for 31% of our economic growth since 1990. Their quest for profit optimization and market control is no longer congruent with the interest of the "people". This is not the fault of the MNC's, but rather the fault of the government not being one of the people, by the people and for the people.
Wealth tends to gravitate towards power. Over the past three decades, many industries have consolidated their ranks to where only a few large corporations are competing for the business of the consumer, also known as the citizen. This happened in the auto, health care, Wall Street, Banking, Oil and others. (In fairness, the auto industry presently is very competitive. This is a result of our auto industry forming an oligopoly in the sixties, becoming lethargic and allowing foreign imports to inflict severe damage on the American companies.)
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.” (Adam Smith, The Wealth of Nations, 1776).
What many refer to as free markets, are not free. It is true they are not under public, government, control; however, a small group of very large corporations controls the power and wealth created in these markets. One result is the consolidation of wealth in this country, along with market power.
Our government has the responsibility and authority to correct this inequity and abuse of power, but chooses to do nothing about it. It could enforce existing anti-trust laws to break up these oligopolies making these industries more competitive, creative and resulting in a fairer distribution of income amongst the citizens of this country. Why is the government not acting?
Lord Acton, the British historian, said in 1887; "Power tends to corrupt, and absolute power corrupts absolutely…."/span>
The heads of these corporations are wise enough to buy off our elected officials with campaign contributions. This includes members of both parties including the President. Some members of congress have been quick to call for a constitutional amendment to require a balanced budget. I find it interesting that these congressional representatives are not simultaneously calling for an amendment to correct our out of control campaign financing laws. If this was corrected, everything else may take care of itself.
Where is The Tea Party on this issue? Oh, I forgot; Rupert Murdock and the Koch brothers finance them.
In response to Flagstaff's comment:
I appreciate your thoughtful comments and would like to reply.
In many ways we agree. Government does impose needless regulations on business. Free Markets should be the primary determiner of how wealth is allocated. Everyone should have an equal shot at success. The major responsibility of government is to protect us from tyranny and that is why we have an army and a police force.
Where we may disagree is I believe it is governments role to not only protect us from outside tyranny, but also from tyranny within. Some coporations and oligopolies have too much control over markets and it is governments role to protect us from this possibility. A Good example is AT&T trying to buy T-Mobile and control the cell phone market. Free markets need to be protected; otherwise, wealth and opportunity will be unfairly distributed.
Government must take steps to assure its citizens that one company, or a small group of companies, cannot control a market where they set the price and quality of their products without regard to competition.
This group of market participants, if allowed to do so, can also reduce the ability of our citizens to offer their labor services to the market at a fair wage because other companies do not exist to compete for their services.
I appreciate you taking the time to share your thoughts. Free markets mean freedom from unnecessary regulation; and from private entities owning markets and destroying competition.