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joether -> RE: What is the Republicans' plan? (7/12/2012 11:37:15 AM)
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The part that has been annoying me is the manner to which Republicans 'get off' on being stupid. Recall back during the 2008 election, then, Sen. Obama stated that to get better fuel mileage, one should make sure their car is operating efficiently and well. And added that one should make sure their tires are at the proper air pressure, rather than deflated. There was physics and economic thought in those statements. Yet, many Republicans slammed him for making such remarks.
Years ago, the idea of 'fiscal responsibility' had some merit to it. Not increase the US Budget drastically, while paying down existing debts. That if the budget was increased, the reasoning for it was debated, considered and researched ahead of time for how it was to be increased, how long, and who really gets effected by its short/long term lifecycle. In recent years, the 'fiscal conservative' as it was dubbed back then, is now just both a joke and a shadow. For example, if the nation has 178 units of debt at current (this is an abstract example). If the country decides that debt should be paid off (like say, a housing mortage on a bigger scale), paying at 11 units a year (8 for the principle, 3 for the interest), it will take about twenty-two years.
'Old School' conservatives would have set money aside to pay that debt off. Most likely in a bank or similar investing insitution that was safe from bankruptcy or corruption. The knowledge the money was handling the problem, year after year, could be told to the citizens that they, the elected officals, had solved the problem. It was a long term problem, but would be settled out within 16 years.
'New School' conservatives believe that the budget shouldnt increase at all, but rather decrease quickly. The problem (as seen for over a decade now) is decreasing revenue intake, while doing nothing on the budget, creates deficit that gets added onto the debt. So the formula and plan the old school conservatives developed is now removed for a plan that involves no long term thinking or planning (beyound 2-3 years). In fact, the money that was put into the original plan, is taken out to off-set the deficit 'for a few years', creating an even bigger financial problem that doesnt get addressed properly. To which the new school conservatives would just 'shovel off' to someone else to deal with. Than, after that group was dealing with the problem, not only blame that group for screwing things up, but convince their voters its the fault of the other group for doing it.
So the most recent thought (of this abstract example) by the new school conservatives is to pay the debt off, but only at 4 units a year (1 unit for the principle and 3 for the interest), while assuring their voters (who are not doing the math and long term planning) that this will in fact pay off the debt....FASTER. Its just criminal behavior at its worst! For example, last years, Mr. Romney paid 13.9% in taxes on all his income. His administration wishs to give him and others in his bracket (the top 2% of income earners) another 20% reduction in taxes being paid. How does lowering revenune pay off long and short term debts....faster (which is another aspect of Mr. Romney's economic plan)? It just doesnt make rational sense!
"Starve the Beast" as the new school conservatives call it, has two fatal flaws.
A) By lowering revenue as a long term economic plan, put much more strain on a budget that is not directly tied to how much money comes in (i.e. deficit spending for the Reagan Admin.). These new line of conservatives have been trying to corrupt others to believe that what they think is waste, really is waste; when the reality is the money is spent on good things that keep the economy rolling. They (the new scnool conservatives) know most conservatives in generally are not knowledgable about the financial numbers on a large and complicated scale. In fact, most conservatives demand everything be made simple and easy to understand. They dont wish to listen to the liberal financial guys, since their numbers are factual and true. Better to believe the fantasy than the truth, right?
The long term economic and financial plan of these new school conservatives is just dangerous at best, and financial sucuide at worst. After a time, there is only one of two possible outcomes (and neither are good, enjoyable, or favorable on any current scale). 1) We "stay the course" (to quote a 'famous' financial 'smart guy' from 2000-2008) by not making prudent adjustments to the taxes. Thereby setting us up to be like Greece over a period of years from now (8-22 years). 2) After a few years, the taxes are nearly doubled, after conservatives 'wake up and smell the coffee' before the country takes a financial nose dive into absolute disaster. And what happens in America, will effect other nations around the world, which will come back to hit America even worst the second time (as the country is invested in many systems and concepts in other markets). Sort of a 'one two punch' that KO's the nation.
Either of those two options sound fun and enjoyable? Only if your a total moron, idiot, or insane anarchist.
B) Failing to understand long term planning. When you invest in a house and purchase it via a loan from the bank. You establish a long term plan to both own the house (i.e. obtain the deed to it), and create long term wealth for yourself through the investment of the property. The country has to do that on an epic scale! But by drawing down future revunues, even while the budget is not adjusted, creates those financial land mines. Since some programs were designed to work long term rather than a fixed number of years. It was believed people would remain wise to the 'ebb and flow' of economic markets every year. And that during bull markets, the nation puts additional funds aside to help pay for things when the economy is in a bear market. That's old school conservative planning.
However, new school conservatives apply long term financial planning like they plan running for office. 'Short term' to them is about 3-4 months. 'Long term' is abour 3-4 years. Compare that to liberals it is a very short life cycle of thinking. Liberal 'short term' planning is about 2-4 years. 'Long term' is about 10-20 years. So when the new school conservatives apply their 'thinking' to financial matters, usually wisdom doesnt enter the picture. They cant pay off a huge debt within a presidential term. So they say "fuck it", drain the account and apply it to stave off the deficit that they created. Even though that account, if left alone, would have solved the problem 10 to 20 years later.
But this is only one of perhaps dozens if not tens of major problems effecting this nation at present and within the long term future. The more erractic the 'new school conservative financial philosophy' (yeah, say that five times fast) becomes, the less stability you'll witness in the American financial market place. At one time, a goverment contract was a stable source of income for a company. The company could hire workers for the duration of said contract knowing the country would pay for their products and services without a problem. Allowing these new school conservatives 'at the helm' creates an uncertain amount anxiety among American business owners big and small. The contract they get today, could be gone tommorow. How does a business plan a long term strategy with regards to said contract from the US Goverment? As can be seen, the markets are having huge problems because Congress (with these new school conservatives) is more volitale and uncertain. Companies can not plan long term, if they believe the contracts they got in good faith with the goverment will be honored during the course and completion of their end of the deal.
And 'yes', I've conserably dumbed down this material given some of the audience members knowledge base. It gets highly technical, complex and complicated the more indepth one ventures. Most of the calculations on things are so advanced the human brain by itself can not go from start to finish without the aid of computer systems to do the massive number crunching. You try doing thirty-two trillion individual calculations within a few days!
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