As chronicled in recent editions of Troup’s Corner, momentum has a new address. That address is 1600 Pennsylvania Avenue. The latest AP-GfK poll has the President’s approval rating at 60 percent. On the other hand, the same poll reveals that 52 percent of Americans think that the country is on the wrong track.
The results are hard to interpret. The current approval rating is seven points higher than the last poll. Of course, the current poll also takes into account recent events. The Bin Laden outcome was met with almost ninety percent approval. This development could explain the volatility of the overall approval number. For example, 60 percent of respondents now favor “harsh interrogation tactics.”
What are not volatile, are economic issues. Sixty-one percent of respondents do not like the President’s handling of the gas price issue, and less than half approve of his handling of budget issues. These issues existed prior to last week.
Despite the apparent opportunity, the GOP shouldn’t be overjoyed. The American voter has trust issues with the conservative brand. The less than stellar Bush administration and its mixed message of “compassionate conservatism” will do that. This doctrine employed a cocktail of government expansion (DHS and Medicare D), nation building, bail outs, and tax cuts. The end was anything but compassionate. The means were anything but conservative, but no matter, it’s guilt by association for retro-cons such as yours truly.
On matters of National importance, Troup’s Corner tries to convey two themes. First, conservatism is more than a mere anti-government movement. Second, the majority of Americans live as conservatives but have a hard time identifying with it because of red herrings and mixed messages.
The one thing that can overcome these obstacles is a unifying theme. The election results of 2010 indicate that Americans want to capture 1994 in a bottle, right down to the passionate Congress and newly discovered left-of-center President. Back then, Newt Gingrich executed the Contract with America under the watch of Bill Clinton. Some milestones were met, while other deliverables remained unaddressed. Even so, the Federal government balanced the budget and was on its way to repaying the National debt, barring catastrophe.
The unifying theme this time around may have arrived in the form of Paul Ryan’s (R-WI) “A Roadmap for America’s Future.” The plan preserves Medicare for those 55 or older. Tax revenue would be indexed to GDP at nineteen percent. The budget process would take the responsible zero-based approach, as opposed to a prior year basis (quick aside for our Upper Shore readers: this is the major flaw in the State’s maintenance of effort mandate. I smell column!). It is a good long-term strategy.
For sure, the plan is not infallible. Perhaps Ryan is deferring to Secretary Gates’ defense spending proposals. It’s too big of a chunk of change to ignore. Another question that needs to be answered concerns timing. This plan addresses deficits. Federal spending is currently 25 percent of GDP. Tax revenue is 17 percent. This has created annual deficits in excess of 10 percent of GDP, meaning that the debt is growing at a higher rate than the economy, and rapidly at that.
It would seem that the slashing, cutting, and reforming would take care of that 8 percent gap; however, that only gets us to the break-even point. An increase in Federal revenue is necessary to address debt reduction. Using CBO’s budget outlook from 2009 (the basis of the Ryan plan), Federal revenues would reach 25 percent of GDP in 2074. Look at the numbers in the last paragraph. Yeah, that’s a problem. The Ryan proposal would get the Nation to 19 percent, which is an increase from the current 17 percent. Coupled with spending overhauls, this would put the Nation in a good spot if we were discussing a problem with the magnitude of what we saw in the 1990s. Unfortunately we aren’t discussing those numbers.
We need a revenue jolt to pay off the investments we made in war and stimuli in all its forms. There is plenty of wiggle room for tax changes that could be employed to raise revenue. Ryan could concede the point on the inheritance tax. Obama could concede the point on individual income taxes, and embrace a strategy like lifting the cap on Social Security earnings.
There is room for compromise. For the hard liners out there, remember this: the Constitution we love to uphold as the basis for all of our arguments was, in itself, a gigantic compromise. At the end of the day, we’ll probably see a plan that looks a lot like the Simpson Bowles report. And in 2012, Ryan and Obama can argue over whether the Simpson portion of the plan, or the Bowles portion of the plan, is right for our long-term health.
Steve Payne says
Michael, Love the headline!
I agree with you about a compromise like the Simpson Bowles plan. In fact why not just use it. I do think the Rs are unified about the Ryan plan now, they’re all trying to hide or get away from it. Even Newt Gingrich blasted it yesterday on Meet The Press. Anybody seen our Rep since he voted for it?
MBTroup says
“Even Newt Gingrich…”
Take that with a grain of salt. If one is running for Prez, he isn’t well served to say that someone else has all the answers (another example – the Romneycare problem).
And the headline seemed to be a hit for a few folks.
Cynthia McGinnes says
Yes, I have spoken to our Rep. Andy Harris ..at Against the Grain today before the town hall meeting. Andy is 100% behind the Ryan budget, and after he explained the Medicare portion, it made a lot of sense. First of all ,Medicare is going broke..if we don’t do anything, then there will be rationing and many will go without timely care. Perhaps Paul Ryan’s ideas are not perfect, but they are a starting point, and they don’t deserve to be demonized. Dr.Harris has some very good answers to these questions, and offers the point of view of a practicing anesthesiologist who has had to deal with the extremely high costs of liability insurance, high risk obstetrical patients, and availability of care to those who need it.
Instead of just disparaging Dr. Harris, and Paul Ryan, because of their political affiliation, it would make sense to enter the discussion. If you don’t agree with their ideas, what are your answers to solving the problem of hugely underfunded Medicare,Medicaid, and Social Security ?
The best way to increase tax revenue is to have a booming economy and more people paying taxes…if taxes are raised on those who create the jobs, how do we get the economy going? If we don’t find more tax revenue, how do we balance the budget? How do we eliminate the waste and duplicate programs to save money without throwing people out of work? None of this is easy and it doesn’t help when people get snarky and demonize each other.
The truth is that without a growing economy we can’t accomplish anything. That has to be the first priority.
StellaL says
Ryan’s Medicare proposel will be defeated, as it should, as will anyone who votes for it, let us hope!
First of all, many radicals on the right abhor Medicare because it is hugely favored, well run government managed health care. Scary. Very scary for those who really believe that ‘trickle-down” is all that really works and “get government out of our lives!” is a doctrine.
What kind of nation do we want to be? Do we really think that vouchers for health care will provide the kind of coverage that seniors rely on or can afford? Are we willing to continue to be a nation that is growing more apart in terms of income disparities? The system cannot be sustained. Medicare needs help and taxes should be raised to pay for it.
MBTroup says
Just wondering, are we reading, comprehending, and discussing? Or do we have our canned responses ready after one paragraph?
Anyway, thanks for reading. As always, the comments (and last weekend’s events) play well for where we’re going next week.
StellaL says
Wow, what chutzpah. We really don’t have to read and respond, i suppose…
Keith Thompson says
Stella and I come from different political perspectives, but I echo her doubts about the effectiveness of trickle down economics. I think the end result of Reaganomics failed largely because it was based on the faulty idea of using tax cuts to increase revenue. As far as I’m concerned, the idea behind tax cuts are to cut the size of government; not encourage its growth as what happened under Reagan.
As for Cynthia, I agree its important to emphasize that the best method of increasing tax revenue is having a booming economy. That’s why I rant and rave about communities taking advantage of economic opportunities. I think what fiscal conservatives need to understand though is the difference between economic development and corporate welfare. For instance, fiscal conservatives should be in favor of tax policies that benefit businesses that contribute to the domestic and local tax revenue base as well as provide domestic and local jobs. Fiscal conservatives should not be in favor of corporate welfare that benefits corporate executives who don’t contribute to the domestic and local tax revenue base and export jobs across our borders. Ultimately, I think it’s far more important to formulate tax policy benefits toward companies and corporations who invest their capital in their communities rather than companies and corporations who are simply padding stockholder pockets.
MBTroup says
Stella – Wasn’t really aimed at you. I’m reading some “you” and “your” then a rebuttal to something I didn’t say. Just wondering if people were reading the whole thing, or ready to argue after one paragraph.
steve Payne says
My proposal is the Simpson Bowles Plan. It does far more and much faster than the Ryan Plan.
https://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf
StellaL says
I agree Keith. We do live in a capitalistic society that should reward the successful entrepreneur. The problem is that the disparities have widen so much that those in the top percentile are benefiting more and more while the middle is shrinking, literally. This gap is not the America of the 1950s and 1960s. I believe it resembles
the gilded age. Corporations are not only carrying more clout with those we elect in Congress, but are also increasingly benefiting from government largesse. I just cannot fatham how one party can continue to expouse
a fear of big government, which at least has the ability to heed the interest of all Americans.
Keith Thompson says
Stella…you have just illustrated why I, a fiscal conservative and advocate of smaller government, does not put much faith in the Republican Party.
MBTroup says
“I just cannot fatham how one party can continue to expouse
a fear of big government,”
And thus we come to the heart of the issue these past few weeks. The birther and value types have either hijacked or have been used to discredit a larger movement. If you want to ask the TP bus drivers their feelings on subsidies and TARP, the answer would likely fall in line with the things that Keith is saying. The idea now is to allow the TP types to drive the big bus. We’ll see if Newt let’s it happen…
StellaL says
Well, my point being a fear of government yet totally champion corporate interest. The latter is totally
profit driven, which cannot meet the needs of millions. I just fail to believe it can “trickle down” to help all.
Keith Thompson says
Stella writes, “The latter [corporate interest] is totally profit driven, which cannot meet the needs of millions. I just fail to believe it can “trickle down” to help all.
Well, let me differentiate between good business and corporate interest. Both are driven by profit but the good business will put that profit into the company meaning that it trickles down into the community through job opportunities, and into the local economy from building of the tax base to employees who also become consumers in the local economy. Corporate interest is purely driven to drive up stockholder dividends and is often accomplished by cutting local jobs and outsourcing production across the borders. Ultimately this business practice will lead to failure in the free market except that corporate interest continues to thrive because politicians continue to pass laws that protect these corporate giants. Often the reason is because these large corporations contribute a lot of money to politicians.
In other words, the Tea Party needs to “support” businesses who tell them that they want government to leave them alone (by leaving them alone) and be wary of corporations offering to support their campaigns in exchange for beneficial legislation. The former is supporting smaller government, the latter is supporting bigger government.
BILL PARKS says
Emotion backed thinking is very hard to change. We all identify with the terms used to describe ourselves and any challenge to the word or concept we take is a challenge to being. So looking at things and circumstances without emotion is difficult, reaching a common agreement is demanding, and changing the way we do things is almost impossible. I suggest we work to find some things we agree to.
Do we agree that the United States is a sovereign nation? I think everyone is okay with that idea.
Do we agree that sovereign nations can make their own laws, levy their own taxes and issue their own money? The key issue I wish to raise is that of the government issuing our nations money.
Do you see that the United States has the power and authority to issue its own money? Abraham Lincoln issued currency to help pay for fighting the Civil War, the practice continuing until 1967, and the appropriate laws remaining on the books.
The hardest thing for me to understand is our government’s borrowing money when it has a budget deficit since all it has to do is issue the money. The same power it uses to issue a treasury bond is the same power needed to issue currency. Both are forms of money that can be used to buy and trade goods and services, the difference being bonds create debt and bear interest that is a drain on tax revenue and currency is debt and interest free.
Anyone who supports the present way of getting money, please provide the financial logic of borrowing money our own money, creating a monumental national debt, paying huge amounts of annual interest, restricting needed government programs like health care for our people, educating our children, rebuilding our roads, bridges and cities – all because we do not have enough money, when we can issue all the money we need without debt, interest or increased taxes?
Keith Thompson says
Bill Parks writes…”The hardest thing for me to understand is our government’s borrowing money when it has a budget deficit since all it has to do is issue the money. The same power it uses to issue a treasury bond is the same power needed to issue currency.”
It’s simple, the more currency you print and put into circulation, the more you de-value that currency resulting in inflation. Currency has a value and is subject to the same laws of supply and demand as any other economic commodity so if you increase the supply of your currency by printing more of it, you decrease its value.
MBTroup says
Whenever I see this, I offer the same rebuttal:
https://articles.cnn.com/2009-01-16/world/zimbawe.currency_1_zimbabwe-dollar-south-african-rand-dollar-note?_s=PM:WORLD
BILL PARKS says
A reply to Keith Thompson
Familiar objects, like old slippers, and customary ways of doing something are comforting to me. Old answers fit my thinking because I know them, I have lived with them, often for years. The United States has used the British Banking system my whole life, and Roosevelt was in only in his second term when I was born. I feel very uneasy challenging such a longstanding institution. But in times of national financial crisis, looking at our circumstances from a different point of reference, to me, is essential for our survival.
So Keith, let me see if I understand your position on our government issuing our currency. As I read your response to my post, are you advocating the government continue to borrow our currency, increasing the $14.3 trillion national debt, paying $500 billion in annual interest payments this year –more that $5 trillion over the next decade — burdening the future with even greater debt because you are afraid of inflation?
gerry maynes says
Hi, Our President is simply enjoying a temporary upturn in his numbers due to the Binladen execution. It doesn’t mean that he has some great momentum going for him. Heck he has already has started his way ou the door this past week by ambushing the Israeli Prime Minister on TV. Any one with a lick of common sense could possibly think that the state of Israel would ever return to the pre 1967 Borders. He is already in some trouble in New Jersey which has turned local government in places like Bergen county for the first time in 30 years from Democratic control to Republican. The governor is doing a fine job and along with NY( Governor Cumo might as well be a Republican) lets irritate the large Jewish populations of this metro area and these states just might turn up in the republican column
in 2012. Heck this best Republican candidate in 2012 is Obama. The man who could not get legislation through his own congress and senate. The man who ijnherited two wars and has got us in a third. Mr 9 percent thats unemployment folks. A guy who has spent trillions with out any known return. Yes! The man that makes one miss Jimmy Carter. At least Jimmy never declared war on Arizona! So, I figure President Obama has ample time to make the nominee of the Republican party look like Abe Lincoln or at least Ronald Regan even if that nominee is just another empty suit
Keith Thompson says
@Bill Parks.
No, I advocate balancing the budget largely through reducing the size of government. Also, as much as I don’t like the idea, I’m not sure that balancing the budget can be done without an increase in taxes. I’ve always seen the Republican ideas of borrow and spend as just as bad as the Democratic ideas of tax and spend. If anything, I find tax and spend as a more responsible way to build a bigger government. I’d prefer to reduce the size of government. I’m not adverse to changing the status quo when the status quo isn’t working anymore. I don’t think the status quo is working anymore.
StellaL says
“ambushing the Israeli Prime Minister”????? How about focusing instead on the intransigent Netanyahu
who, backed by AIPAC and the far right, seems set on leading Isreal on a collision course. He and his party
enjoy the status quo. However, at this time he could have a grand accomplishment if he put a
credible 2-state solution on the table. If not? How about we redirect some of the $30 billion in aid to Israel.
Obama “declaring war on Arizona”? Really now, turn off Rush and read, think.
MBTroup says
@Gerry – I believe I conceded that in paragraph two, but you’re right. He found a way to give away momentum.
@Bill/Keith – “Because you are afraid of inflation…” And when the food and gas costs more, which causes the workers to demand higher incomes to pay for it, which cause businesses to control costs (layoffs) or seek alternate financing (higher interest loans), we’ll be back into the same cycle of defaults and bailouts. We’ll do this until we awake to the notion that our National business plan is flawed.
Stephan Sonn says
What national business plan?
How can there be a national business plan when we are at the mercy of another agenda where we are not the planners. We hardly manufacture any consumer items.
If you are talking about green, the financial community is far to status-quo for that. The atmosphere for innovation is overwhelmed by bean counters.
Business needs a new frontier and some risk taking to grow out of the carbon cage.
MBTroup says
@Stephan – You won’t like this, but your last sentence is right out of the Henry Hazlitt play book 🙂
And I’m not talking about anything specific. Business plan = what do we do? What are our competitive advantages? The era of absolute advantage is over.