Saturday, April 9, 2011

Common sense isn't found in headlines or sound bites

I've been watching headlines go through my various social media outlets, and, to put it bluntly, it pisses me off.  The amount of spin by the 2 major parties is out of control, and the blind supporters of these parties are as bad or worse.  What is frightening is people are making decisions based on these polarized headlines or blogs or party statements.  And even when a party is making a decision that is probably for the best when you look at a pros and cons list, they justify it from a completely different point of view, which can actually cause people to lose support for their position.  Here's a few examples:

Headline #1 : Total jobs lost under the GOP budget = 30,699

This was a tweet posted by the MN House DFL.  Previous to that, the MN DFL posted an MPR story as their proof.  As the story says, what the DFL is claiming is true, but the truth is stretched to its limit.  First, the jobs actually haven't been lost yet.  Second, a number of the jobs will be eliminated through attrition (retirements, people leaving etc.) and simply not replacing those workers.  Even the MPR article states this in the verdict - the DFL leaves out important points in its claim.

To me the tweet is very misleading because it insinuates the jobs have already been lost.  Even if they had, the GOP has only been in charge of the MN legislature for only 2 months.  It would be like the GOP trying to take credit for the unemployment in MN dropping.  They haven't had enough time for any of their actions to have large effects on the MN economy.  Besides that, state government action has very little effect on the economy or jobs.  The jobs referred to in this headline are government jobs, which is one of the biggest ways to save money in government.  Even President Obama's debt commission suggested eliminating government jobs through attrition by replacing 3 workers with 2 new ones.

Headline #2: Harry Reid says social security is fine.

In a sense this is true. But take a look at the details.

If you look at this Washington Post article, you will see that even Social Security's own actuaries have said if we don't start reforms now,  payroll deductions will increase by 16.1% in 2037, and benefits will be reduced by 22%.  Thinking of my own parents, uncles, aunts, and other relatives that will be heavily dependent on social security at that point.  A 22% cut would be devastating.  Social security is already spending in the red ($54 billion in 2010).  None of the money is actually there since it was borrowed back to the federal government, which means our retirees are dependent on foreign creditors to pay part of the retiree benefits.

I don't know too many of my friends that have confidence in social security being a big portion of our retirement by the time we are of age.  It would be ludicrous to think so.  Let's start working on changing it for our generation so our parents and grandparents can spend their retirement confident we will take care of them, knowing we made the right choices on their (and our) behalf.  Raise the age of full benefits for those under 40.  As much as I hate to think about it, raise the payroll tax a small amount.  Let's change the social security tax window to increase collections.  We need to take care of our older generations, and  I would be proud as someone younger to do so if it is done correctly.

Harry Reid is right, technically the trust fund wont run out for 20 years.  But that evaluation has serious problems.  We have to fix it, or as I've said many times, we will leave alot of people with nothing.

Headline #3: NPR funding is vital to the nation.

I love NPR, and more specifically MPR.  Who doesn't love Car Talk, Wait, Wait Don't Tell Me, A Prairie Home Companion, the great news coverage, and many other things they provide.  But is the funding from the government vital?  Here's where I have a problem with the justification.

First, by NPR's own admission, government financing only accounts for 5.8% of the overall revenue for public radio.  I don't know too many companies that haven't had revenue go down in this recession, so is it unreasonable for NPR to have to make some cuts if they lost 6% of their revenue?  Second, government funding for NPR was originally put in place so they could be an independent news source free from influence by businesses or other outside influences.  Note: I couldn't find a good resource for this point, so I won't expect it to have as much weight, but I am making it anyway. 22% of public radio finance now comes from businesses (and don't we all love those underwriting messages in our programs).  It is hard to believe that some of the programming doesn't carry some bias to those companies and organizations that sponsor programs.

Finally, is it really fair to say that everything NPR does is vital to the nation?  I love the weekend programming, but does Car Talk really educate the public (or is that its primary mission)?  No, they entertain, and we should have the option of patronizing the entertainment of our choice, and not be forced through taxation.  Full disclosure: I used to contribute yearly to MPR until I saw how much tax money is given to public radio.  It was disturbing to me, especially when you see the salaries of some of the people that work there.  I will say if all public funding goes away, I will contribute again because I do enjoy the radio and online content.  I just don't want to pay twice.

Headline #4: GE paid no taxes.

The New York Times really worked hard to stir the pot on this one.  It was a very cleverly written article, which made it seem GE not only didn't pay taxes but they were getting a $3.2 billion refund.

This article does a pretty good job of explaining what the article is really about.  GE did dramatically reduce their tax bill from the normal 35% corporate tax rate (second highest corporate tax in the world by the way).  There is no company in the United States that pays 35% of their profit to the IRS.  That's why every large company has accountants and lobbyists - to make sure they don't pay too much.  Even small companies take write-offs to reduce their tax burden.  It's not unusual.

GE is not getting a refund.  the $3.2 billion tax benefit is a way to report what GE did to save money over the standard tax rate through various activities.  Let's say they sold a $200 item that cost $100 to make.  GE is going to record it as $200 revenue with a cost of goods of $100 and a $35 tax on the $100 profit.  At the end of the year when they write off various tax benefits, they need to put the difference back on the books to report the profit to shareholders.  Not a refund, but in a sense a correction.

GE plays the tax game like every other corporation.  In fact, one of their major tax credits is green energy tax credits.  It is so ironic that progressives push so hard for green energy tax credits, but when a corporation uses them for producing green energy, they get attacked by the same people.  Republicans are guilty too.  In 1997, they passed a tax law allowing companies to hide alot more profit overseas which costs the treasury billions.  The easy way to solve this is to dramatically simplify the corporate tax code.  Lower the rate.  Eliminate almost all write-offs.  Allow expenditures to be taken all in the year they are incurred.  This would keep the flow of money more stable, it would be easier for smaller companies to plan for taxes, and it could even spur spending since buying equipment or inventory would be one way of still getting a write-off through immediate expenditure write-off.

Headline #5: The budget for the rest of 2010

It's a tiny start, but still a disaster. $39 billion in cuts doesn't come close to filling a $1500 billion deficit (yes, I put $1500 billion on purpose so the scale of the numbers is more obvious).

The democrats got their Planned Parenthood funding.  I know it has importance, but if President Obama's health care is supposed to take care of everyone, why do we need Planned Parenthood?  Also, the democratic blogs saying republicans are against women?  Come on, get real.  We are trying to cut the budget and put more responsibility on people.  The government can't take care of everyone all the time.

The republicans got a $5 billion increase in defense spending.  Another joke.  We are in 3 wars and several peace-keeping missions.  Time to get out.  We have no clear mission in Libya, in Iraq, in Afghanistan.  If our mission is to stabilize these countries, is it working?  If we left today, what would happen?  We can't make every country like our country, so we need to keep our troops safe and our country safe by bringing them home.  Then we can cut the military budget.

As an aside: I love how the $100 million a day we are spending in Libya is used as an excuse to spend elsewhere (If we can spend that on Libya, why can't we fund programs X,Y, and Z).  Because, we need to cut them all.  Get out of Libya and cut programs X, Y, and Z.  It isn't a choice of one or the other, it should be all.

Overall, I see both parties telling have truths.  The blogs are worse.  It's politics as usual with the "That side is wrong and sucks," rather than compromise or solutions.  We need to think differently.  We need to get back to real American values of hard work, self-reliance, and liberty and freedom.  Leave us alone government, we can take care of most things by ourselves.


  1. Politically, we sit on different sides of the aisle. But your opinions (even the ones I don't completely agree with) are well reasoned. If politicians could come to the table with tempered expectations and well-reasoned arguments, steeped in historical data, as you do it would be a lot easier to arrive at reasonable compromise solutions to problems that arr too real to be used as political footballs.

  2. Thanks. That's how I feel too. Opinions should be heard, and our leaders have to be willing to listen, compromise, and maybe even change their mind. Citizens, rich and poor, need to be part of the discussion. And once a decision is made, we have to be willing to accept it and try it even if we don't agree with it. That's true progress.