. . . there are no paradigm-busters, few challenged assumptions, little input from nonunion labor, the middle class elderly, or youth activists who will be living with these establishment policies for years
Note: We are pleased to welcome local financial and investments manager Rocky Boschert as the RoundUp's Financial Editor. Rocky currently is writing a weekly short-tips column for the Personal Finance page. In addition, he will be providing a monthly front page column about broader financial and economic issues. Here he offers a timely commentary on the highly publicized deficit reduction commission reports now in the news, with some of his own homespun suggestions. Agree with Rocky or not, his suggestions make a lot of sense for a critically important issue that is overblown with rhetoric and political stalemate – and no real action from either side of Congress to speak of. Be kind to Rocky. Try your best to keep your comments on topic without resorting to personal attacks and name-calling. Thanks.
Send your comments and news tips to roundup.editor@gmail.com, to Mr. Boschert at arrowbiz@texasorp.com or click on the "comments" button at the bottom of the story
By Rocky Boschert
Financial Editor
The recent reports by the two deficit commissions – one appointed by President Obama (fiscalcommission.gov) and the other from the private Bipartisan Policy Center (bipartisanpolicy.org) – do not lack specifics.In fact, they are so specific that they obscure the drastic need for a more diverse public finance philosophy that is really eating away at the heart and soul of a sound American economic system.
Clearly, the professional composition of the two task forces were designed to achieve a legislative consensus on Capitol Hill, where there are self-styled centrists, moderates, conservatives and liberals, but all with a clear corporatist bent. As a result, there are no paradigm-busters, few challenged assumptions, little input from nonunion labor, the middle class elderly, or youth activists who will be living with these establishment policies for years. Even union advocacy is glaringly lacking.
Warring factions
In other words, middle class Americans are asked to sacrifice much, but certainly not the top of the economic heap. Both panels include very modest cuts in the vastly bloated military budget whose sector empire takes half of the entire federal government’s discretionary spending (not including the insurance programs Medicare and Social Security). Yet already a tentative suggestion by the Commission’s Co-Chairs to “save” $100 billion in the Pentagon budget by 2015 was called “catastrophic” by Secretary of Defense Robert M. Gates.
Not surprisingly, the two reports make no mention of ending the economically disastrous Iraq occupation or Afghanistan war, or stopping defense contractor lobbies from bleeding the Pentagon budget with the development of outdated and low tech war machinery.
Herein lays the problem throughout these reports. They do not come to grips with the need for fundamental changes to expand the economy as if people matter first – to locate new revenues, launch long-overdue public works programs with their job creation throughout communities in America, and reduce the kind of deficits which are empty economic programs that create no real wealth, such as corporate welfare bailouts and giveaways.
For example, there is much reference to tax reform that rearranges tax rates. The private task force — chaired by Alice Rivlin and former Senator Pete Domenici (R- NM) would eliminate special tax rates for capital gains and dividends. Ok, but why not shift the incidence of some taxes from middle class workers to a Wall Street tax – a tiny sales tax on purchases of speculative derivatives that are engaged in primarily by the rich; or a one penny a trade tax on stock and bond transactions that economists say would raise several hundred billion dollars a year?
Since Wall Street banks got blank checks from the US Treasury during the bailouts, it is time they paid some “interest” on the free loans that allowed them to maintain their elite lifestyle.
Unhealthy fiscal prescriptions under health care
Both reports go for what they call medical malpractice reform. What they mean is they would not do anything about the over 100,000 Americans who die and many more sickened every year from hospital and physician malpractice, not to mention adverse affects from over-prescribed drugs and hospital-clinic infections. No, by reform they mean cutting back on judicially-decided damages now being awarded to far less than the one-out-of-ten victims who even file a claim. Prevention is the way to save lives and money – a policy entirely ignored by the bogus attention to medical malpractice lawsuits addressed by the two commissions.
In reality, the best policy outcome would be a government mandate to contain future health-care costs by allowing Medicare and Medicaid to use its bargaining power with drug companies and medical suppliers to reduce or control rates; by allowing Americans to buy drugs from Canada; by applying the antitrust laws to health insurers; and yes, by giving the public an option to buy their health care from a government-run public option. If people don't like it, they can simply buy their health care from the insurance companies.
More policy inadequacy
There is no mention in either report about ending foreign corporate tax havens for U.S. companies that would bring in nearly $100 billion a year. And, remarkably, though some mention is made of tax compliance, they ignore the regular estimate by the Treasury Department of $300 billion a year in uncollected corporate taxes.
Three other large areas were ignored
First is cracking down on corporate crime, including at least $250 billion dollars in annual health care billing fraud and abuse. (See: http://www.corporatecrimereporter.com/sparrow091409.htm). Both the fines, the disgorgement back to the defrauded and the deterrence to corporate crime amount to very large sums of money.
Second, the commission-co-chairs and the task force avoided recommending the proper pricing of our commonwealth assets that are regularly given away free (e.g. the public airwaves and hard rock minerals, such as gold and silver, on federal land) or at bargain basement fees (the national forest timber and other minerals).
Third, although both reports emphasize the need for economic growth, there was no reference to revising global trade agreements that have left our country's huge trade deficits and its workers in dire straits. Keeping industries and jobs from moving to repressive regimes like China so US corporations can re-export products to the U.S. should not have been ignored.
But then, with all the real life solutions not addressed in the two deficit reduction reports, we simply have to look at the professional composition of these elite establishment Task Forces, and we see why.


















