Congress's Petty Infighting - Destroying Government Efficacy

It's no secret that the United States Congress has not been popular lately. Unfortunately, that unpopularity has gone to some stellar lows lately. One poll shows that Congress is less popular than cockroaches, Genghis Khan, and the world famous band Nickelback.

 

Although to be fair, it's hard not to like a man who rocks dressed like this.

Why is Congress so unpopular lately? It's completely ineffectual. All that Congress does lately is delay making important decisions, such as how to address major revenue issues, taxation, and the infamous debt ceiling, in order to score political points with pundits.

After all, getting favorable comments from Fox News is guaranteed to increase your likelihood of publishing a best selling memoir after your political career is over.

One lovely example of this is introducing bills that have a part that most people agree with, such as keeping interest rates on student loans from doubling and then including an addendum that the other party cannot vote for, such as removing part of the healthcare reform law or raising taxes on businesses. After the law does not pass, the Democratic or Republican party can go on a media blitz of how the other party does not support education and wants to screw students over. This kind of behavior does not encourage members of the parties to work together to get legislation that actually passes through Congress. All it does is take up gratuitous amounts of Congress's time between recesses on bills that are guaranteed to never become laws.

Additionally, the parties frequently insult each other in the press. For instance, a forthcoming Republican strategy retreat was greeted by the Democratic Party with  a long mocking list of topics to focus on, such as how to speak to women and minorities and a need to take a course in science 101. Although political humor can be amusing, it should be saved for venues like the Daily Show with Jon Stewart. It should not be employed by Democrats or Republicans to burn any chance of a positive relationship with the other party.

 Especially since politicians are generally incapable of being as amusing as comedians.

How can this problem be fixed?

For starters, reducing the influence of the media blitz from networks like Fox News, CNN, and MSNBC would help. All of these networks produce partisan coverage that only serves to divide the public and prevent politicians from coming to any sort of compromise. Cutting back on the number of fanatical guest pundits might also help these shows actually have an informed and reasoned debate instead of a holy war between conservatives and liberals.

Another helpful addition could be to reduce or eliminate the number of bills that are produced with additional unrelated legislation attached. The majority of large bills have multiple riders that are not at all necessary to the issue the main bill is meant to address. This makes it extremely difficult for Congress to act efficiently, as every important piece of legislation is joined by little additions that benefit a tiny portion of the country or that may not be a good idea at all. However, since the larger bill is important to pass, these small additions make it into law. Alternatively, these riders may make it impossible to pass the main bill because they are destructive and unacceptable to one party's values.

A typical bill in Congress. It may be useful but it also comes covered with ferocious bees. 


However, these solutions will only cover up the main issue-that Congress does not seem able to compromise anymore. I feel that a large part of this problem is because of Gerrymandering, the drawing of election district borders. Many Congressmen are set up so they reside in a liberal or conservative stronghold. This means that the only threat to their reelection hopes is if a more liberal or more conservative challenger arrives to provoke the extremes of the voting population against the representative. Although this is convenient to reduce the likelihood of losing elections, it also makes it so representatives are beholden to the extreme views of their party. Compromise is not viewed as acceptable by some conservative or liberal zealots, hence the inability of House Speaker John Boehner to get his party to fall in line with the national party's position on the recent fiscal cliff legislation.

What's needed is for someone to slay the Gerrymander. I don't feel that this is likely though, instead the United States will be stuck in muck and mire for generations to come.

Will a hero arise who can defeat the fearsome Gerrymander? Only time will tell.

National Balanced Budget Amendment

One of the more popular ideas circulating to reduce federal government spending is for a balanced budget amendment to be added to the U.S. Constitution. Almost every U.S. state constitution currently has some version of a balanced budget amendment in place. Republican presidential candidate Rick Perry has said that it is one change to the Constitution that he would strongly support. Newt Gingrich and several other presidential candidates agree with Perry, a balanced budget must be a short-term goal for the United States. It's also a popular idea with voters; one poll shows that about 66% of Americans want a balanced budget for the federal government.


Governor Perry's preferred method to deal with federal overspending.

But what is popular is not necessarily a good idea. Let's look at the history of the U.S. budget and show how a balanced budget amendment would work and see if it seems like a great idea for the federal government.

A look at Federal Debt
One important fact to keep in mind when considering a balanced federal budget is that the United States government has always been in debt. Budget surpluses have occasionally allowed for a large portion of that debt to be paid back, but it has never been paid off. Even when it has been mostly paid off, a war usually ensued that rapidly escalated the debt back to a high level. For a recent picture of the debt, here's an image showing it since 1940, with a sharp increase right at the start due to WWII.



Since the United States is still involved with two wars and also invests a significant amount of money into combating worldwide terrorism, it doesn't seem out of place for there to be significant government debt right now. Perhaps once President Obama's withdrawal plan for Afghanistan is completed it will be possible for the debt to be reduced significantly. Wars are expensive, so it shouldn't be a surprise to anyone that the debt has kept increasing.


Military supplies brought to you courtesy of the national debt.

The addition of revenue loss due to the large tax cuts passed during the last decade basically guaranteed that the national debt was going to be quite large. With the description of the current situation out of the way, let's look at the inner workings of a balanced budget plan for the government.

How a Balanced Budget Amendment Works
Fortunately, it's easy to see how a balanced budget amendment works since most states have one in place. They force the state's legislature to make up for any budget shortfalls each year by reducing spending or increasing taxes to ensure that the state does not fall into debt. There isn't much tolerance for increases in taxes lately in the U.S. so states have had to rely on spending cuts in order to meet their balanced budgets. This has resulted in layoffs of state employees and deep cuts in spending due to falling tax revenues stemming from economic turmoil from the recession. Although this has been painful for vulnerable segments of society that are reliant on state programs for support, state spending cuts typically are not that noticeable for citizens who can support themselves financially. Unfortunately, that would probably not be the case for federal spending cuts.

State vs. Federal Balanced Budget Amendments
The biggest reason that state spending cuts are not all that noticeable for most of the population is that a lot of the most important spending, such as Defense, Medicare, and Social Security, takes place at a federal level. The federal government also gives a lot of money to states to fund education and other state programs. So, even if Maryland decided to not spend any money for a year, they would not be vulnerable to foreign invasion since they're still protected by the national military and some services, particularly those directed toward the elderly, would still be provided courtesy of federal spending. Additionally, while it would be painful for residents of Maryland, the rest of the country would likely not even notice.

In comparison, if the federal government needed to cut back on spending suddenly, the entire country would feel the impact. The federal government spends trillions of dollars each year, including billions of dollars that go to each state in the union. The problem with a balanced budget amendment is that the federal government responds to major challenges for the country.


Such as this, for example.

So, if something like Pearl Harbor were to occur today, the states are not responsible for the response to it. It's the federal government that has to rebuild the Pacific fleet and create a military capable of fighting in Asia and Europe. This is why it's acceptable for states to have balanced budget amendments, they are not the level of government that responds to large-scale disasters. Even with major floods and hurricanes, it's the federal government that provides the bulk of the money for rebuilding efforts.

One important point to bring up is that proponents of balanced budget amendments do typically allow for an exception to be made in times of war and national emergency. Congress would be able to vote for a time of national emergency to be declared so that the need for a balanced budget could be ignored for a few years while the war or whatever is resolved. However, the current political environment in Washington shows that it may not be possible for Congress to agree on whether the country is in a major emergency or not. Earlier this year, Republicans and Democrats could not even come to agreement on raising the federal debt limit, even with months of warning, resulting in the United State's credit rating being reduced for the first time. Compromise just seems to be impossible in the government right now, so I wouldn't count on the political parties putting aside their differences to allow a little matter like a major war to determine that the balanced budget needs to be ignored for a year or two.


Particularly when some members of government point to federal spending as being a worse enemy than the Nazis.

The Potential Consequences of a Balanced Budget Amendment
So, let's say the worst case scenario of a major war or other unanticipated and extremely expensive disaster occurs and Congress doesn't agree to lift the balanced budget requirement to deal with the problem. Let's use the example of the wars in Iraq/Afghanistan as a new budget issue. They have cost around $3.7 trillion so far. That number is as large as the entire yearly U.S. budget! Now, that cost has to be spread over 10 years of budgets, but that's still a hell of a large unanticipated expense. Well, here's the budget:


What do you want to cut out?

Basically, no matter what part of the budget you want to cut, it will be a hell of a painful cost for the country. Perhaps that's part of the point of a balanced budget amendment, it makes for some really hard decisions that maybe the United States should have to make. But still, do you really want those decisions to have to be made while we're in the middle of a national disaster? In this instance, I think Rick Perry and other supporters are a little off the mark in what needs to be done to fix the U.S. budget. Yes, it needs to be reduced, but it should not be forced in this manner.


Without a serious discussion on the budget, we may end up not aiming at the right parts to cut.

Macromanagement in Total War

This article covers macromanagement in the Total War series. Again, it's best to begin with a definition of the term.

Macromanagement refers to actions taken by the player that build buildings, units, gather resources, etc. It basically contains all of the generalized actions that make your army larger and more powerful. An example of a game with an extremely heavy macromanagement focus is Age of Empires II.


An example of an Imperial Age Teuton player's military.

In this game, the player has to spend a significant amount of resources to advance their age through four ages, from the Dark Age to the eventual Imperial Age. Each time a player upgrades their age they gain access to many new units, buildings, and upgrades. There are also four resources in the game where most RTS games have one or two at the most. This means that players have to make a lot more resource gathering workers than is typical and also choose where to deploy them to fit the needs of their military. For instance, if a player wishes to build large numbers of knights they will need to focus on gathering food and gold. The primary focus of combat in the game is focused principally on building larger numbers of better upgraded soldiers than an opponent. This makes the game a macromanagement oriented player's dream-whoever does the best at gathering resources and building the largest army usually proves victorious.

Macromanagement in Total War
All of the macromanagement actions in the Total War series are performed during the turn-based portion of the game. To some extent, this makes it less stressful than in other RTS games, as you don't have to figure out which workers to send to gather resources while also managing all of your military units. You have time to think about the best choices to make.

So where does the challenge of macromanagement come into play in Total War? There are four main strategic areas a player must consider: income, costs, construction time, and troop deployment.

Income
Resource gathering works a bit differently than in many strategy games. In Medieval II Total War the currency in use is called florins, and it is used to purchase everything from buildings to mercenaries to regular units. The major difference is that instead of workers you control producing income, settlements produce almost all of a player's income. This wealth is produced through taxation of the population, farming incomes, mining incomes, and trade. Players can choose to upgrade the buildings in a settlement to produce more income from each of these revenue streams.


For instance, adding mines to Genoa adds 200 florins a turn in revenue to the city.

The main difficulty is that the player must balance producing, maintaining, and moving armies around the world with building revenue enhancing structures, improving military producing structures, taking new settlements, and maintaining good public order in existing settlements. This can be quite a challenge because players can't just build more workers to produce gold, the only major way to improve income is to take new cities. Unfortunately this requires sending out armies to claim them, which costs money in itself.


Plus Milan isn't happy when the reason you attacked their capitol is that "you needed the cash."

One of the additional changes in Medieval II Total War is that settlements may be castles or towns. Towns produce much higher trade incomes than castles so they tend to yield a great deal more money than castles. Castles, on the other hand, are harder for an enemy to take in combat and build stronger military units. A player may choose to change a castle to a town or vice versa until they reach the highest level of upgrade.


The screen to switch settlement types.

This leads to one strategy to maximize income-convert castles in well protected areas of your empire to towns so that you get more money out of them. It doesn't make sense to have a fortress in the middle of Ireland where there aren't any enemies around.

There are also two smaller ways to produce income in the game. One new unit added to Medieval II Total War is the merchant. There are numerous small resources scattered about the world map in the game, ranging from slaves to gold to amber. A player can place a merchant on these resources to trade in them, which generates a sum of gold based to some degree on the rarity of the resource, the merchant's skill level, (which rises with time spent trading and also by taking out rival merchants), and how far the resource is from the player's base of power. For instance, an English player's merchant gathering lumber right next to London would probably generate about 7 florins a turn, which is about enough to buy five spears for a single spearmen unit. If that merchant was instead gathering ivory in the Sahara desert, that would produce 200-300 florins a turn, a much better option.


A Moorish merchant trading in France.

However, I do not personally think merchants are worth the time and effort to manage. The main issue is that merchants can be "attacked" by other faction's merchants and taken off the field of play if the other merchant has a higher finance skill. This is calculated somewhat randomly so if you aren't the type of player who likes to reload the game a lot you will not have merchants for very long. One of the few things the computer does well is to build lots of merchants and use them to attack rival player's merchants. Additionally, the wealth generated by merchants is quite small compared with settlement revenue. Even if you have four merchants generating 300 or more florins a turn, an exceptional occurrence, that still only generates as much money as a typical small town.

The final small income boost is generated by stationing a general or family member in a town or castle. This allows them to be the governor of the settlement, adding his own personal bonuses to the town's incomes. For example, if a general with mining knowledge is in a settlement with extensive mines, that mining revenue is boosted by 10%. Generals can also improve public order, allowing more military units to be pulled from the town to fight elsewhere, lowering upkeep costs.


Unfortunately, most generals get traits like "Sadly Ignorant" which reduces a town's trade and tax income by 5%...

That sums up the discussion of income, so what does all that money get used to buy?

Costs in Total War
The largest costs in the game are incurred when upgrading and adding structures that allow new military units to be produced. The best units in the game require humongous investments of resources to field-sometimes going up to 30,000 florins or more. When a basic infantry unit costs about 300 florins, that's basically the price of a small army. Even mid-range units like armored swordsmen in the image below cost a good 10,000 florins to be able to produce.


Although they look awesome enough to be worth the price.

Even worse-each of the types of units-cavalry, archers, infantry, etc. is built through a different building upgrade tree. So if you want to build a force of the best infantry and archer units for your faction you have to upgrade two different structures to the maximum level. This is quite an expensive task. So why is it important to do this? It seems like it would be more cost effective to just build a bunch of the cheap spearmen units instead.

The main issue is that the less expensive units just don't stand up in a fight later in the game. A force of knights will carve up a group of peasants with pitchforks without losing more than a couple men at the most. Additionally, every unit in the game has an upkeep cost that has to be paid every turn. The upkeep costs for cheap units aren't much lower than the more expensive ones, meaning that you aren't saving much money in the long run.


It's also a bit embarrassing when your entire army consists of these guys.

This leads to another concern when upgrading your military unit producing structures-building time.

Time
Most structures take multiple turns to construct with more advanced military and economic structures taking half a dozen of more turns. This means that a player has to consider their goals carefully when deciding what to build. It is foolish to try and upgrade every city and castle to produce the best available units. That takes far too much time for each settlement and also is a waste of hundreds of thousands of florins that could be put to better use building more soldiers. A better idea is to coordinate building upgrades among the settlements in a region. For instance, in a section of the map with three castles, a player could upgrade one to produce heavy cavalry, one to produce heavy infantry, and the last to produce archers.

For an example of how much money and time that coordination saves, let's assume that it costs 5,000 florins to build each building for each unit type and that they each take five turns to construct. The price for upgrading every castle for all three units versus one unit type in each is as follows:

5,000 x 3 castles x 3 unit types = 45,000 florins
Build time- 5 turns x 3 structures= 15 fifteen turns

Compare that with only upgrading one in each castle:
5,000 x 3 castles x 1 unit type each= 15,000 florins
Build time- 5 turns x 1 structure= 5 turns

A 66% discount is a pretty good deal, no?

An additional consideration is that revenue producing structures like mines, docks, and farms also take multiple turns to complete. It's important to consider where to place them in the construction docket so that you have more income later.

That brings us to the last main macromanagement area of Medieval II Total War, troop deployment.

Military Deployment
One common military maxim is that one soldier on hand is worth more than ten available at some unknown point in the future. This is extremely important throughout any Total War game as armies are spread out over a continent-spanning world map. It doesn't matter how many soldiers you have in Africa if the battle is in Europe.

This maxim even applies to individual armies. It's better to have all of your soldiers consolidated in one army if possible. This is because reinforcement military units don't deploy alongside your army on the real-time battle map. They will enter the field from a different direction-possibly one that is a long hike from the main army. This can allow an enemy army to destroy your main army in detail and then turn to crush the reinforcing army as well.


As in this example, where the total numbers of all three Scottish armies were roughly equivalent to the English force, but the English force charged forward and destroyed each individual Scottish force with ease in the actual field battle.

This has a great deal of relevance to strategic decisions throughout the empire as well. It makes no sense to leave large forces to garrison cities and castles that are not near enemy factions. They are most unlikely to be attacked, send those soldiers forward to towns and castles that are on the front lines of whatever wars you current face.

Conclusion
Although the macromanagement of Medieval II Total War is done in a turn-based setting, taking away the urgency of decision-making, it still takes a good deal of thought to do well. A player who does not make good choices will end up bankrupt and with inferior forces to their opponents. Also consider that a Total War game takes a lot longer than most other games so short-sighted economic and military decisions to win a current war may come back to haunt you later in the game!

Why Compromise is Impossible in Washington

Thanks to the political gridlock in Congress, the United States credit rating was downgraded by one of the credit ratings agencies for the first time in history. The most appalling part of this debacle is that it seems like a deal should have been made many months before the one finally passed on August 2nd. As I mentioned in a previous post, it would seem that the most obvious solution would have been to raise some revenues and also cut spending significantly. This solution doesn't give either party everything they want, but it is the only way to try and reduce the deficit without cutting spending, which does improve economic growth and protect vulnerable populations, to the point of crippling the federal government completely.

Instead of having this type of logical discussion and making a long-term solution, Congress chose to make ultimatums for weeks on end and eventually pass a half-assed plan that, if nothing else, did at least cut spending a little and raise the debt ceiling. It will also require both parties to have this same discussion in a couple years when the second round of deficit reduction occurs.


Delay is also known as success in politics.

This brings up the question, why does it seem like no one is willing to compromise at all in the federal government?

Requirements for a Compromise
Whenever people or groups disagree on what they want, a negotiation has to occur in order for a deal to occur. In order for a successful negotiation to take place, there has to be some overlap in goals, otherwise a compromise will not occur.

Let's use the example of Bob wanting to purchase a car from Adam.


Adam seems like a reasonable fellow to deal with.

Bob can afford to spend $5,000 for a car at this point. Adam's car is priced at $7,000, but he is willing to go as low as $4,500. As you can see, there is overlap in the price ranges here so a sale can theoretically take place.


A successful negotiation is possible, the car may be sold to Bob.

Now, if you change that same scenario but instead make Bob only willing to spend $4,000, look at how the picture changes.


No overlap here, a deal cannot be reached.

The problem is that the current Washington environment is the latter scenario. Both parties agree that spending cuts need to occur, to defense, social spending, and many other areas. Where the parties are split is on the issue of revenue increases. The Republican party, particularly the Tea Party faction, is completely unwilling to consider tax increases of any sort, even those caused simply by removing loopholes in the tax system. The problem is that so many Republicans have signed pledges with Grover Norquist's Americans For Tax Reform group stating that they will never ever vote to raise taxes in any way that they are left with no room to negotiate on the budget. If they choose to negotiate, they are harshly criticized by Norquist's group, which seems to have a great deal of power with the conservative base of the Republican party.

So, here's the image of the possible negotiation options for revenue increases right now:



It's enough to make you need a cigarette.

The Consequences of a Smaller Government

In the ongoing US budget discussions, one issue that does not seem to be addressed often is what the actual consequences of a smaller government presence will be for citizens. The main arguments are about taxes, social security, medicare, and other large budget issues for the federal government. However, federal budget reductions will also result in a smaller state and local government, as a lot of discretionary spending that seems likely to be axed is given to these groups. With the current anti-tax rhetoric spewed by people like Grover Norquist, it seems unlikely that extra local taxes will be approved to maintain services in most areas. So, what happens when government is "small enough to strangle in a bathtub?"


Die government!

Well, one example is that over the last couple of months in my city the public safety budget has been targeted for reductions. A few police officer positions were removed and the fire department has been reduced in size as well. A few people complained about this, but for the most part people were willing to let it go instead of having to pay higher taxes.


Maybe the government would have more success with tax hikes if they hired a nicer guy to implement them.

Unfortunately, last weekend five sexual assaults took place, including two rapes. The immediate reaction, of course, was that the reduction to the public safety budget was a terrible idea and the money should have been taken from somewhere else. The problem is that there is nowhere else to take this money from-there just isn't very much discretionary spending left in most budgets. Almost every state and local government has been facing budget issues for years now, there isn't any fat left to trim.


The four or five old guys have retired, everyone else is kind of important.

For another example, almost every government agency that I've been to has a ridiculously long line. Getting the title transferred on my car takes about one to two minutes of actual work, but it took about two hours due to the government office that I had to go to only having four employees to handle dozens of people. As it seems likely that more employees are going to be laid off or not replaced when they retire, the problem is only going to get worse. Maybe I need to order a pizza next time I need to get my driver's license renewed.


Looks like Mr. Norquist would like one too.

Conclusion
It's easy to say that government should be smaller. After all, it saves you money in taxes. The problem is that a smaller government means that when YOU need help you're not going to be able to get it. After all, one man's lifesaving government service is another man's discretionary spending.


What? You want a fire department? What kind of wimp are you!

The US Budget Discussion and Your Taxes

I felt this would be an appropriate topic given all of the ongoing federal discussions regarding what changes need to be made to the federal budget in order for an increase in the national debt ceiling to be approved by Congress and the President.


Discussing the federal budget is one of those topics that always brings members of both parties closer together.

I've heard many suggestions from people on the internet and in person on where budget cuts should be made. We should stop funding Pakistan. We should stop all foreign aid. We should pull out of Iraq and Afghanistan completely. We should cut spending all over the place but also not increase taxes at all. All of Congress should not take salaries and lose all their benefits until the budget is resolved and social security is saved. Maybe some of these suggestions would be logical, the problem is that I've never heard the people proposing them actually give any numbers on how much money these cuts would save.

Fortunately, I found a website, Third Way, that let's one see how much money the government spends on each of these areas and many more. Below are screenshots that are a summation of spending on each area of the budget:




Looking at the actual numbers, one can see how silly a lot of the easy budget cut proposals really are. Foreign aid sounds like a logical area to cut, after all if we can't afford to keep our own country running why should we be paying for Pakistan? Unfortunately, foreign aid is only 0.6% of the total budget and thus even completely cancelling all aid would not help much to resolve the problem. It would also have some consequences that I don't think most people who propose this consider. Foreign aid is one way that the United States, which, like it or not, is a leading power in the world, holds prestige and stature in the world. Cutting all of our foreign aid would make many countries unhappy with us, potentially resulting in losses of trade and influence throughout the world.

Stopping the wars in Afghanistan and Libya and cutting our remaining aid to Iraq is another popular solution. This is a somewhat fair point, as active combat operations take up around 5% of the total budget, or 25% of the total defense budget. However, it's not possible to just get up and leave without leaving a potential disaster behind. Additionally, it would be quite harmful to America's image in the world if we pulled out and the countries went to hell a couple weeks later. Besides, Barack Obama has already made progress with a withdrawal of most combat troops from Iraq and a scheduled withdrawal from Afghanistan. This proposal is rapidly becoming a moot point, we'll be out soon anyway, it's not going to help with the budget discussion.

As for Libya, it's a relatively minor commitment of US military power that probably won't cost more than a few billion dollars at the maximum. Sadly, that's almost nothing to the defense budget.


The rough equivalent of you throwing a couple staples in a trash can to the Pentagon's budget.

The common call for Congress to fuck off and give up their salaries and benefits, although understandable, also would have no impact on the budget. Congress's total cost is 0.2% of the federal budget and the largest portion of that is for the Library of Congress.

So with these easy decisions off the table because they won't help, what's left? Unfortunately, there are no easy, pain-free ways to solve the problem. The largest five categories of the budget are social security, defense, medicare, low-income assistance, and medicaid. Cutting any of these is obviously problematic, as they will affect the ability of the elderly to retire and reduce already low fixed incomes, affect national security, and potentially leave many without healthcare. The other option would be to increase revenues, most likely through a tax increase of some sort.

This leaves two main proposals by the Democrats and the Republicans. The Democrats http://www.blogger.com/img/blank.gifhave offered to reduce spending in many areas in exchange for some tax increases achieved through removing loopholes that many wealthy individuals use to avoid paying high tax rates. The Republican proposal, stimulated by some of the Tea Party representatives, is much less balanced; no tax increases allowed, fix the budget through spending cuts alone. Additionally, although Democrats have been willing to compromise, the Republicans seem much less willing to allow any ground on tax reform.

It is instructive to look at the state of Minnesota, whose state government is currently shutdown due to budget deadlock, to see why the Republican no compromise stance is problematic. If you're unfamiliar with this issue,


and Governor Dayton would prefer that you not be familiar with this issue,

here's an article summarizing the problem.

Essentially, the Republicans refuse to allow any income tax increase proposals while the Democrats refuse to pass a budget that would require harsh spending cuts to the Minnesota budget that would gut a lot of departments. The current result is that Minnesota has 22,000 state workers laid off for a few weeks now and has lost millions in state revenues http://www.blogger.com/img/blank.gifdue to closed state parks, the lottery being closed, and other productivity costs. The state's credit rating also took a hit due to this situation, going from AAA to AA+, meaning that any borrowed money will have a higher interest rate in the future. I'm sure that will help with the budget problem a lot.

Although I don't think the Republicans are going to let the same thing happen in the national government, as common sense would hopefully suggest that it's not a great idea to hurt the United State's credit worthiness for a Pyrrhic victory, it does indicate a problem in the government that more and more Americans are noticing. The GOP's polls have worsened due to the budget discussions as it becomes obvious that the Republicans aren't looking for a compromise but are instead seeking an ultimatum-budget cuts and nothing else or the United States has to default.

This is a juvenile move because the cuts that would be needed to balance the budget would have to come from those budget categories mentioned earlier-meaning that they would have a huge negative effect on senior citizens, national security, and the unemployed and extremely ill. The only logical course of action, even if it's still unpalatable, is to increase revenues and cut spending. This allows for the cuts to not be draconian while still setting the United States budget up for the future so that we don't have to have this discussion again in five years.

My fear is that Congress and the President will end up making a compromise like what looks to be happening in Minnesota. Instead of actually fixing Minnesota's budget problems, the compromise is that future revenues will be used now so that the state government can resume operation. While that's nice in some ways, it means that the government might shutdown again in a year or two when that money runs out.

So what can you do? Well, tell your senator or representative that you aren't going to stand for a half-assed compromise for the budget and instead go for a long term solution to the U.S. budget. Yes, it won't be pleasant for either party, but it will be a hell of a lot better than setting the country up for a worse budget crisis in a few years when the compromise money runs out.

That also reminds me, another proposal a lot of people have come up with is to not pay their taxes until the government stops screwing up. That's not a great idea, as one notable actor discovered recently. Pay your taxes.


Even vampires couldn't stop Wesley Snipes, but the IRS managed to do it.

Trickle Down Economics Doesn't Work

The Theory
One of the most heralded theories behind Republican economic policies of the last few decades has been trickle down economics. Basically, the theory holds that wealthy individuals pass down a significant portion of their income to lower income brackets. Thus, what is good for the wealthy will also be good for everyone else. After all, someone has to mow their lawns and prepare their meals right?

The theory is also applied to large corporations and companies. Policies beneficial for them should also be good for smaller businesses and consumers.

In Practice



Unfortunately, in practice there isn't much of a trickle down to the lesser classes. With the exception of some celebrities and dictators, most of the wealthy tend to place their wealth in places like this:



This is great for their personal net worth, but unfortunately wealth has to be spent in order for it to trickle down to the middle and lower class. The wealthy also have access to all sorts of ways to keep their money in places where it cannot be taxed at all or is not taxed at a very high rate. This results in the middle and lower classes bearing a larger share of the tax burden needed to finance the government than the upper class, (yes, the wealthy still pay more total dollars in all likelihood, but as a PERCENTAGE of their total wealth they do not). Corporations are also fond of moving their corporate headquarters around the world to dodge taxes as well.

So how has the last couple decades of removing regulations and lowering taxes for the wealthy played out in terms of the finances of the common folk? Since the wealthy are, by any standard, doing better than ever, if the trickle down theory holds true regular people should also see their situation in life improving.


A Rolex for everyone right!?

It isn't trickling down
Here's an image of the actual income distribution in the United States.



The top 20% of incomes hold about 80% of the wealth in the country. The bottom 60% of Americans hold around 5% of the total wealth. If trickle down economics really worked that would not be the distribution.

Another unsurprising but depressing statistic came out recently, the average worker's share of national income produced by businesses has dropped to a record low. This trend began in the recession following 9/11 and has continued to this day.




This is despite the fact that corporate profits have been rising significantly over the last year or so, with massive gains reported in late 2010. However, rather than using that money to create jobs, raise pay, or promote workers, companies have chosen to use it to expand their infrastructure by purchasing new equipment and software. Although this may improve productivity it doesn't create many jobs. Even worse, many are simply holding on to their profits as a cash reserve.

Why has the worker's share of revenue decreased so much?

Partially it would seem to be the end result of the shift of millions of well-paying manufacturing and technology jobs overseas. With the benefit of strong, tough unions, laborers used to make good wages and solid benefits building automobiles and other items, but shifting jobs overseas allowed companies to hire cheaper workers and not have to pay union salaries. This helps companies profit handily but the workers who held such jobs are stuck with poor career choices. In many cases, they have to train for an entire new career. I know several nurses who used to work in the automobile industry but they saw the changes that were coming and realized they would have to find a new career if they wanted to keep a job.

Another possible explanation is that unions have declined in power lately. In many cases, they have been successfully cast by conservatives as being a villain fighting hard against corporations valiantly trying to create jobs.


After all, the Communists had a union too!

One of the most successful smear jobs was against the U.S. automobile industry, where union wages and benefits were blamed for why U.S. automakers were uncompetitive. Some popular myths included the "fact" that auto workers were making $70 a hour. It actually was blatant misinformation that included all benefits in the hourly wage, but that was conveniently ignored. Besides producing inferior vehicles for a period of time, the main reason that U.S. automakers are in trouble is that they have a lot of retired workers to support whereas foreign automakers haven't been around as long in the United States so they do not have hundreds of thousands of retiree's worth of pensions and healthcare to cover.

Yes, unions create vexation for many companies, but they are one of the few ways workers have to negotiate with large multinational corporations. If anyone thinks Domino's Pizza will talk to one of their delivery drivers who has a problem with how they do things, they're talking out of their ass. However, they will have to listen if all of their delivery drivers together have a problem with the way they're doing business. If you are in a business without a union, asking for a raise with all of the current economic fear is a good way to lose your job. This is especially true when all sorts of companies and even the government are hemorrhaging positions, forcing early retirements, cutting pay, and slashing benefits.

How could this problem get any worse?

Expenses are Rising
Well, unfortunately the price of most basic commodities like fuel and food have also been rising lately.


The data is still coming in for how Rolls Royce prices have been affected.

As pay isn't improving in line with price increases, the spending power of most Americans is reduced. Given that the average salary of the bottom 90% of Americans is around $30,000, that poses a bit of a problem.



Well, the solution to that should be easy right? Get a better education and you can get a higher paying job! That would be a great solution except that the price of college has also been rising dramatically. I was fortunate in that my parents made wise investments for my college education so that I graduated debt free, but I know many friends who are $40,000 or more in debt and will have to try and pay that off with dubious job prospects on the horizon. But, hey, maybe the answer is to take out some more loans and go to grad school!


Possible back injury risk not included in tuition and fees.

Will it get better?
There is certainly a problem with the distribution of wealth in the United States. It used to be that one decent salary was able to support an entire family back in the 1950's. I'm not going to pretend that it was a golden age for the United States, as there was a great deal of wage and job discrimination toward women and minorities, but the actual distribution of wealth was much more equitable.

Jobs should offer a decent living wage. It isn't right when families with two wage earners, who are possibly working more than one job each, are worse off than families who had just one position fifty years ago. Unfortunately, many of the jobs that are being created at this point tend to be in the service industry category-jobs with low pay, poor to no benefits, and minimal room for advancement. These aren't the types of positions that are going to solve this problem.

It's somewhat understandable that companies are reluctant to make new, well paying jobs right now. The economy's recovery is still uncertain. However, it's also a fact that until unemployment goes down Americans will not feel confident in the economy. Maybe if companies tried hiring some employees it would help move us in the direction of a recovery.