Energion Roundtable Week 4 Responses – Other Issues

Posted By Elgin Hushbeck

I found Joel Watts answer to this week’s Energion Roundtable question a mixed bag.  I agree with him that we should have a flat rate, so I don’t quite understand his desire in the short term to go in the opposite direction. I also agree that government is too large.  I agree we should reform health care, but strongly oppose single payer. We need more real choices for consumers, not less.

His comments that we should use eminent domain for corporations were to me a misappropriation of eminent domain and a misunderstanding of corporations at least the very large ones he seems to be targeting.  Who does he thinks owns the stock? It is not just “the rich.” A lot of average people have their retirement accounts and pensions invested in these companies.  For example, just to consider the current focus of evil, Bain Capital, since 2000, teachers other government employee pension plans have had $1.56 billion invested in Bain.  And this is before one begins to consider just exactly how this would all happens.  

Still, I would agree that government should consider the effects of its actions, particularly in the areas of creating barriers to entry into particular markets.  This is one of the paradoxes of the left, they oppose big business, but much of the legislation they push has the unintended consequence of making it harder for smaller businesses to compete with them.

Concerning Bob Cornwall’s answer, again there was a lot I agreed with.  I would quibble with his claim that Republicans “have been even more profligate” when it comes to spending.  One of the problems I have is the lumping of Presidents and Congress together as I do not think they have equal impact. Since the budget reforms of the 1970s the power of the President to directly affect spending has been greatly reduced. They propose a budget, but most Presidents’ budgets, from either party, are at best a starting point and often are “dead on arrival.”  Obama’s last budget, for example, could not get even a single democrat’s vote, much less a Republican vote.  While the president can veto a spending bill, normally Congress waits until the last minute and thus any veto threatens a government shutdown.  Only Clinton was willing to risk this, and that was to increase, not decrease spending.

In terms of Republican versus Democratic Congresses, from 1952-1994 the Democrats held the House where all spending bills must start.  During this time the budget was only balanced one year, and that was not by design. Republicans won control of Congress in 1994, and within a few years not only cut taxes, but brought the budget into balance over the initial objections of Clinton.

In the early years of this century, Republicans “lost their way.”  With the recession that followed the collapse of the internet bubble, the attack of 9/11 and the subsequent wars, tax cut and new spending programs pushed by Bush, the deficits rose to over $413 billion.   With criticism from both conservatives and Democrats, Republican began to reduce the deficit. In the last budget they passed it had been reduced down back down to $161 billion, but anger from conservatives concerning spending, and democrats concerning the war caused them to lose the Congress. The democrats took over in 2007 and their first deficit rose to $459 billion.  Then came the financial problems and since then we have been well over a trillion dollars.

Whatever the history, currently it is the Republicans who are pushing to reduce the deficits. The Democrats who control the Senate have not even bothered to do a budget in over 1200 days, even though they are required to do so by law.  Without a budget, it is hard to take their claims seriously.

I also disagreed with Cornwall’s claim that that the belief that the wealthy create jobs is “nonsense.”  The problem is that the current Democratic definition of wealthy includes a lot of small businesses, the sector that creates most of the jobs in the country.  I do not believe that this is an either or proposition. You need consumers who can purchase, and employers who can hire.  Many businesses also need investment in order to expand and grow, and thus hire more people.  This investment often comes from “the wealthy.”   No new investment, no new growth, no new jobs, and therefore no new consumers.

Sep 11th, 2012

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