Greece, Destroyer of Worlds.

Since the end of the Cold War, the nations of the world have become increasingly interdependent. Interdependency is the idea that relations among states within the international system are mutually dependent and inextricably tied together. In theory, interdependency will lead to peace as war among the dependent nations is no longer feasible. A perfect example is the European Union and its pacifying impact on Europe. The history of Europe is as long as it is violent. Nevertheless, the region has been relatively peaceful ever since the nations of Europe became economically interdependent.

However, interdependency has a dark side. In this new era of globalization, sovereign nations can find themselves held hostage by the economic policies of other states. Imagine the impact on the world economy if Saudi Arabia decided to cease all oil production or if the United States instituted a trade embargo on all foreign products. The current Greece debt crisis is a real-world example of how the economic policies of one nation can severely hamper the economies of the entire Euro-zone, the United States, and the world.

With the aftermath of the recent economic recession and the impact of international trade agreements on domestic economies, should not the United States, as well as the nations of the world, strive to be self-sufficient?

–TERRANCE MULLINS

Related articles

• How do other countries view the fiscal cliff? Lots of pointing and laughing. (washingtonpost.com)

Weekly Quiz: Test Yourself on this Week’s Events

The weekly quiz is now live in Mypoliscilab. Good luck!

The Tool of Taxation

Old hammer during reconstruction of the building in Pleszew. (Photo credit: Wikipedia)

In graduate school a professor of mine often referred to the “toolbox of government.”  The characterization must have resonated with me because I still use it in my own classes almost fifteen years later.  Of course he was referring to the variety of actions that governments at all levels have at their disposal to implement and otherwise enforce public policy.  For our purposes we can narrow the contents of the “toolbox” down to the bare minimum:

• The power of government to deprive a person of liberty (think incarceration and in the most extreme form, the death penalty)—the hammer.
• The power of government to deprive a person of property (think real property and money)—the hammer.

Confused?  Don’t be.  Chief Justice John Marshall (1801-1835) is credited with expressing the position that the power to tax is the power to destroy.  In this regard the power to tax is the power to punish those who violate the law, ignore regulations, or otherwise challenge the general welfare—the hammer.  The power to tax citizens and residents, businesses, corporations, is generally available to most governments—from Congress to your local water district.  Check your text books, one of the first concurrent or shared powers listed is the power to tax.  Moreover, taxes are ubiquitous—fees: taxes; assessments: taxes; dues: taxes; levies: taxes; taxes: taxes.  The power to tax is the power of government to deprive.

In the months following the Supreme Court’s decision on the Affordable Care Act (Obama-care) , much will be made of the taxation aspect of the now upheld health care reform package—especially the individual mandate, which requires people capable of paying for health insurance to do so or risk a penalty (tax).  What do you think, is it the most intrusive tax ever devised by government (in this case by democrats)?  Is it a new tax?  Is it a tax increase (even though it only applies to people who don’t buy their own health insurance—and wouldn’t we otherwise call these people free-riders or equate them to people who don’t buy car insurance and drive up all of our rates)?  With all the hammers we get hit with every day, is this the one we’re really going to object to?  Ouch!  I know how to fix it; where’s my hammer?!

–DENNIS FALCON

Weekly Quiz: Test Yourself on this Week’s Events

The weekly quiz is now live in Mypoliscilab. Good luck!

Weekly Poll: Your Opinion on Payroll Tax Cut

Congress recently extended payroll tax cut for millions of working Americans; some are concerned about the effect on Social Security benefits in the future. What do you think?

National Debt and Paying for Public Goods

I just recently checked to see how much each person currently living in the United States owes toward the national debt.  As of today (mid-October 2011) the figure is:

$47,685.89

In other words, even after the taxes I paid last year and the year before (etc.) I still owe the above amount in future taxes just to help pay off the current outstanding debt.  And,

• This is if we stopped increasing the debt as of NOW
• This may not include interest (which we now know can take a hit based on what Congress and the President do or don’t do)
• I don’t know how this figure treats corporations and businesses (which we now know that a majority of the members of the Supreme Court believe to have many of the same rights as individual people)

But back to what I owe.  I am fifty-two years old and hope to be a tax-paying American for at least another thirteen years.  That comes out to about $3668 a year over and above what I will be paying in taxes that pay for government programs and services that do not add to the debt.  And if I live to be eighty the figure drops to $1703 a year over and above what I will be paying in taxes that pay for government programs and services that do not add to the debt.

Taxation of citizens and residents by government may be necessary to pay for public goods that are deemed necessary and important by a society.  Maybe the most important part of that concept is to “pay for public goods.”  In other words, we should be taxed to actually pay for what government does.  Robert Smith puts a different spin on the national debt by looking at the last time it was completely paid off.  I don’t know about you, but there has to be a difference between massive cross-generational debt and responsible use of debt to finance some parts of our public load.  What do you think?

–DENNIS FALCON

Barack Obama Unveils the “Buffett Rule”

It doesn’t take a rocket scientist to understand that the U.S. needs money, but conservatives think Barack Obama is waging class warfare by taxing the rich.

Class Warfare?!

Karl Marx

President Obama recently proposed $1.5 trillion in tax increases on American corporations and the American wealthy in an attempt to reduce the nation’s annual deficit. To be fair, the term “tax increase” is not entirely accurate as the president’s plan would not increase taxes per se but would merely close corporate tax loopholes and let the Bush-era income tax cuts expire. CNN’s political ticker posted a great blog summarizing the various responses of GOP leaders to Pres. Obama’s debt plan. In general, the response from the Republican leadership has been to condemn the president’s plan as class warfare.

Class warfareis a term typically used by communists and socialists to describe the struggle between the rich and the poor. In fact, according to Karl Marx, class warfare is necessary as it will lead to the violent overthrow of capitalism. In other words, the republican response to proposed tax increases as class warfare is an attempt to imply the plan as ideologically and inherently Marxist and thus un-America and illegitimate. Conversely, if asking the top 5% to pay their fair share is analogous to class warfare, what is cutting services to the middle-class to avoid rising taxes on the rich? The American middle-class have stood idly by as:

• Corporate lobbyists maintain more influence in Congress than the American people
• The U.S. Congress facilitates the outsourcing of American middle-class jobs to China via tax breaks
• Corporations receive bailouts and/or subsidies devoid of strings
• Colossal military spending goes unimpeded while the average American soldier is underpaid
• Bank of America and General Electric paid zero taxes to the IRS in 2009 and 2010 due to tax loopholes

The “cut government spending” counter-solution presented by Republican Party leaders make for great politics but contradicts history. Historically, there has never been a nation that has “cut” its way into prosperity. However, history is filled with examples of nations building their way to prosperity with the United States being one of them. Asking the super wealthy to pay higher taxes was not a partisan issue under the republican Eisenhower administration when the wealthy paid a whopping 90% of their income to the government. So why is asking the rich to simply pay their fair share, who are currently paying the lowest taxes since World War II, an issue today?  The answer is unfortunate but simple – party politics.

–TERRANCE MULLINS

The Super-Duber Congress

The 12 member joint-committee formed by the Budget Control Act of 2011(BCA) to reduce federal budget deficits by $1.2 trillion, commonly referred to as the “super congress,” has come into final fruition as its membership has been completed.  

A joint committee of the U.S Congress is a congressional committee consisting of members of both the U.S. House of Representatives and U.S. Senate.

The Budget Control Act gave the “super congress” a significant amount of authority in attempt to circumvent the gridlock and entrenched partisanship that has solidified in congress since the midterm election of 2010. The joint-committee assignments consist of six Republicans and six Democrats will have until Nov. 23 to develop a plan to reduce the budget deficit. If at least seven of the 12 members agree to a bill, both houses of Congress must vote on the bill with just a simple majority. No filibustering by senators and no amending allowed in either the House or Senate. If the committee fails to pass a bill, or if Congress fails to pass the committee’s bill, significant automatic-spending cuts will take effect to both discretionary spending and defense.

Massimo Calabresi posted a blog with Time Swapland interpreting the deficit joint committee’s membership selections. However, what does it say about the American political process when a congress within a congress must be established to force elected legislators into action?

–TERRANCE MULLINS

Pork as Federal Spending; The Eternal Conundrum?

In the context of the federal budget the term “pork” generally refers to spending at the state and local levels that members of Congress are able to claim as evidence of their hard work on behalf of their constituents.  It goes without saying that members of Congress share the belief that “bringing home the bacon” increases the likelihood that  they will win reelection.  All one has to do is look for signs in their community that proclaim “YOUR TAX DOLLARS AT
WORK, funded in part by . . . .”  I dare say we usually appreciate the work being done. After all, don’t we all like road improvements, new libraries, and better policing?  Add national entitlement programs like social security and Medicare—and don’t forget military spending—to that list and voila, you have the federal budget.

That’s just on the spending side.  What about the revenue side?  Individual and corporate income taxes provide almost 51 percent of federal revenues (42 percent and 9 percent respectively).  In 2010, the federal  government collected $2.2 TRILLION in receipts from these and other sources.  That can buy a lot of “pork.”  Wait . . . it does buy a lot of pork.  The problem is that one person’s bacon (pork), lettuce, and tomato sandwich (in the form of some federally funded project or another) is another person’s social security check.  A federal dollar spent on one project is a federal dollar that can’t be spent on another. One person’s gain; one community’s gain, is another’s loss.  What one sees as our tax dollars at work another may see as our federal taxes being wasted.  After all, why should my taxes help build a bridge in Oregon (I live, work, and pay taxes in California)?  That’s the dilemma.  If there were enough money to go around we wouldn’t be having this and many other conversations.  But there isn’t.  Federal revenues are being strained by unemployment at the same time that the costs of government programs are rising in leaps and bounds.  And as long as members of Congress see spending federal money at home as their constitutionally granted prerogative there will be a strain that affects all of us (see Matthew Frank’s Blog posted on the Missoula Independent for an example of the thinking in Congress).  Is there an alternative to the system of pork barrel politics that drives much of federal spending?  Other than a threatened presidential veto, can you think of other checks that can be used to reduce the temptation on members of Congress to spend federal funds on projects that might be funded at the state or local level (or maybe even by private sources)?  We could use some help about now.

–DENNIS FALCON