Getting Serious? Not Really, But It's As Close As You're Gonna Get

Something funny happened here at Postcards of the Hanging last week. I saw a comment on my most recent post on Toronto mayor Rob Ford that basically painted me as a communist. And it was from a guy that has been reading me for awhile. What Frank Hilliard actually said was "I'm actually surprised you're so left wing; I thought better of you."

That fascinated me, if only because it reflects how self-described "conservatives" view their own team, particularly once they're in power. They engage in a lot of wishful thinking and impart onto their politicians promises that they never actually made.

My reasons for opposing Ford and the Tea Party - and I've been consistent on this throughout - is that they aren't serious about reducing deficits in anything approaching a serious way. How do I know that? Pretty simple. I listened to what they had to say and read their platforms when they actually existed and actually said something, which isn't the case for the majority of the Tea Party. Mostly, they just mouth platitudes which their hallelujah choir assume is policy.

Ford, contrary to Frank's belief, never really said a whole lot about the "institutionalized dependency and the unions which have created unsustainable pay levels and pensions." Nor did he ever say that he was going to engage in deep, painful cuts to social spending. In fact, his campaign website said that social spending was going to stay the same, if not actually increase. And he never suggested that he going to go all Scott Walker on the civil service, largely because he doesn't have the jurisdiction to do so under the provincial City of Toronto Act.

Hizzoner was as clear as he could have been that he was going to balance the books by cutting waste, fraud and abuse. And you know what? You're not going to find that money just by killing the gardener at Nathan Phillips Square and cutting councillor's office budgets, particularly when you're cutting or eliminating taxes while you do it. That just throws a few hundred thousand dollars at a problem that is costing a few hundred million. Worse, the tax cuts starve you of revenue and basically negate your trivial savings because they aren't paid for with real spending cuts. On top of all of that, Ford scrapped an already paid for transit plan to make good on a boneheaded promise to spend zillions of dollars on new subway lines.

Look, you either want to make an ideological point about tax cuts or you want to be serious about the deficit, but you can't do both because the math isn't there. The American experience, to say nothing of Canada's current self-declared Harper Government, has repeatedly shown us that. If you're spending money that you don't have, then you necessarily have a revenue problem. Not only was George H.W Bush right when he called supply-side "voodoo economics", we now have decades of evidence that prove it.

The Tea Party-Republican coalition in the U.S even worse than Ford. Their ignorance and/or dishonesty is almost breathtaking. They actually ran saying that Obama was "cutting Medicare", knowing full well that Medicare is the single biggest driver of the deficit in the United States. Fully 83% of the American budget is Medicare/Medicaid, Social Security, defense, and interest on the existing debt, but you could fire a flame thrower into a crowd of Tea Partiers and not singe a single one that actually acknowledges that.

They actually seem to believe that you can balance the budget by making incremental cuts to just 17% of it while continuing ruinously expensive tax cuts and promising even more of them. That's so silly that it actually borders on psychotic.

Over the weekend, I wrote about the folly of Wisconsin's Scott Walker and his war against the unions. My biggest issue with it is the fundamental dishonesty of everything that he's actually said. While I'm all for disemboweling organized labour as part of the Super Bowl halftime show, it does absolutely nothing to close the hole in the budget. This is because his plan does nothing about existing pensions or those that go into effect in the immediate future. It will be at least a generation before you see any savings at all from any of this nonsense.

That nicely brings me to Wisconsin representative Paul Ryan, who I actually believe is part of a tiny minority of "conservatives" who isn't an idiot and is actually sort of serious. And, to a very a small degree, he's willing to call out his colleagues as morons, saying last week, "They literally think you can just balance it, you know, (by cutting) waste, fraud and abuse, foreign aid and NPR (National Public Radio)," Ryan said. "And it doesn't work like that."

While it might be the only halfway serious game in town, the Ryan roadmap isn't all that it's cracked up to be.

Ryan has been calling for big changes to the social safety net for years. Known as "the roadmap," his approach calls for individuals to take on more of the financial responsibility for retirement, including the costs of health care. The government would provide a floor of protection for everyone, particularly the poor and those in failing health, but middle-class people who desire more than a basic plan would have to pay extra.

He's also proposed allowing younger workers to divert part of their Social Security taxes to personal investment accounts, an idea that's lost currency among other Republicans given President George W. Bush's failed 2005 Social Security overhaul and the recent swoon in the stock market.

The plan Ryan rolled out last year for Social Security would gradually increase the full retirement age, from 67 to 70. It would also reduce initial benefits for middle- and high-income retirees.

Ryan said Social Security is the easiest entitlement program to fix - though it is the most dangerous politically to touch - and he was disappointed that Obama didn't address it in his budget proposal.

(...)

Under the roadmap, Medicare would be converted into a voucher system that offers seniors a fixed payment to pick their coverage from a range of private insurance plans overseen by the government. Today's Medicare recipients and those nearing retirement would remain under the current system, in which the government determines what's covered and sets payments for providers.

As far as Medicaid, the federal-state program that covers low income people and many nursing home residents, Republican governors have been clamoring for a lump sum payment from Washington, a block grant that they could use to design their own state programs without close federal supervision.

(...)

Many Democrats and even a few Republicans in the Senate say the only way to tackle the nation's financial problems is to address both taxes and spending. But don't expect Ryan's budget plan to include any new taxes.

However, in a break with many Republicans, Ryan did open the door to higher taxes in the future, but only as part of a comprehensive overhaul of the tax code, and only after the big benefit programs have been reformed.

"If we just do a tax compromise without fundamentally fixing spending, then we're just fueling more spending," he said. "Do I believe you can get slightly higher revenues without harming jobs, and get better economic growth? Yes, I do believe that. But I don't think it's a worthwhile exercise if you don't deal with the problem and the problem is spending."

Republicans this week conceded that the government's budget can't be balanced this decade without cutting into current retirees' Medicare and Social Security benefits, something they've indicated they're unwilling to do. But many tea-party activists and junior lawmakers still believe the red ink can be reduced to zero with just a bit more pain, according to Ryan.

There are innumerable problems in that. First, it doesn't address the immediate revenue problem. The extension of the Bush tax cuts for the next two years alone is going to cost $3 trillion and they aren't funded. The Ryan roadmap doesn't address defense spending in any real way. And since your defense budget is predicated entirely on your foreign policy, that is the very definition of discretionary spending. Most sensible people should now agree that the United States can no longer afford its foreign policy.

Then there's the idea of individual Social Security accounts. Since the Bush proposal is the only solid blueprint we have for such a plan, I'll use that as a template for that part of the Ryan roadmap.

By President Bush's own accounting in 2005, transitioning to private accounts would cost a trillion dollars over ten years. No one, not even Chairman Ryan has figured out where that money is going to come from.

Then there's the matter of where the money is invested once the accounts are created. Because the Bush plan was introduced so soon after the shenanigans at Enron, Worldcom and Arthur Andersen were exposed, the plan was predicated on the idea that only "approved stocks" would get retirement money. That does nothing but pervert and socialize the market because it necessarily forces the federal government to pick winners and losers on the NYSE.

Precisely because of the history of accounting fraud on Wall Street, the accounts are going to require massive government oversight and regulation of those companies to prevent the titanic swindling of retirement money from the schmucks with individual accounts. That raises another interesting question. If you have so much Social Security money in individual companies, who appoints the board or represents the new shareholders - the individual investors or some government program administrator?

It also sets the stage for the biggest bailouts in human history in the future. No sane politician is going to allow that much Social Security money to evaporate in a future market meltdown and expect to get elected to anything ever again. Unfortunately, the only tools available to the government to address such an eventuality are bailouts and takeovers, like what happened three years ago on steroids.

The Medicare problem is even worse because of the premium inflation of the insurance industry. If the insurers are allowed to boost premiums by as much as 30%, the vouchers quickly become worthless unless you inflate them as well, thereby exacerbating the problem you have right now. Don't count on revoking their anti-trust exemption, either, because the insurance industry loathes few things as much as it does capitalist competition. And since their scumbag lobbyists own Washington, as we learned during the ObamaCare debate, they'll get whatever they want.

The very worst part of the Ryan roadmap is that none of it goes into effect for fifteen years after passage. Anyone under fifty at the time stays in the system as it is currently constituted. That means if the Ryan roadmap is magically passed in 2013, the transition doesn't take hold until 2028 but the costs of implementing it starts right away, and that's trillions of dollars that nobody knows where to get. Then you have the costs of increased regulation, an increased administrative bureaucracy, lost productivity and the enormous potential of bailouts to factor in.

Everyone agrees that the Ryan roadmap would balance the budget .... in 2060. And that's if it were passed tomorrow. What isn't heavily advertised is that the costs of implementing it would explode the deficit in the interim, thus creating a short-term disaster in interest rates on the existing debt. I don't know how you spend trillions in entitlement reform before you revamp the tax code to enhance revenue without giant defcits. Besides, no one thinks that the United States can continue this way for another fifty years.

I don't want to dismiss Paul Ryan out of hand because I like him and his is the only borderline serious plan out there. Unfortunately, America doesn't have a half century to find out if he's right. And more importantly, he's only playing with the margins in the short term, just like everybody else but more expensively.

The fact is that the United States has created a massive welfare state for old people, defense contractors and insurance companies. The tax code has been jiggered in such a way that 40% of households don't pay federal taxes at all and corporations only barely pay them. The rates are irrelevant when the loopholes allow you to offshore the revenue and avoid taxation almost entirely. Then there are the insane and counterproductive subsidies to farmers, oil companies and virtually everybody else in the country. And mortage interest deductions are a ridiculous and socialist sop to the middle class and the rich which no other industrialized country has in its revenue code.

The main problem is that these plans - all of them - are made based on political considerations at the expense of fiscal reality. You can't get the Teapublicans to shut up about the debt, but God help you if you suggest that their Social Security and Medicare get cut. Forget about means testing those programs and recognizing them for what they are: welfare for old middle-class white people. And you're out of your mind if you think that anyone that isn't Rand Paul is going to suggest a fundamental review of American foreign policy and what the "national interest" really is.

Doing any of those things is to ask for sacrifice on the part of the GOPs political constituency, and that just isn't going to happen before it's too late. So-called conservatives have adopted the same class warfare and victimology rhetoric that they used to bitch about when it came from liberals. And if you think that the same thing isn't true here in Toronto and Canada (although to a much lesser extent), you're high. Worse still, too many on the right repeatedly suggest that you can fix this mess without anyone getting hurt. That seems to be the raison d'etre of the Tea Party, even though they're finding out that cutting even $100 billion is too much for their imaginations.

So if I were to point out anything to Mr. Hilliard, it would be that I'm making my criticisms from the right of the people I attack rather than the left. The difference is that I learned a long time ago to distrust the simplistic and dishonest talking points of all politicians and lobbies, not just the liberal ones. The right has gotten awfully good at lying about serious things and their base simply often invents policy positions that their politicians never held. Rob Ford, for example, promised to cut nickles and his supporters took that to mean dollars. And it just isn't so.

Most of my readership intuitively knows that the left is wrong already, but I'm not sure that they know that of what passes for the right these days. You sure as hell don't read it in most blogs or hear about it in the circle jerk that is Fox News or Sun Media. Honesty and seriousness used to be conservative values, but that was a long time ago.

Lying and pandering to the retard base isn't going to accomplish a goddamned thing. And not only am I not going to do it, I'm going to call out anyone who is. Fuck 'em.