Archive for January 2013

What is the National Debt and Debt Ceiling? A Plain Language Summary on Basic US Government Financial Terms

January 29, 2013

I originally wrote and published the piece below on July 29, 2011, as politicians wrangled over the debt ceiling.  Through a failure to reach a timely agreement, the unthinkable happened a week later: one of the three credit rating agencies reduced the country’s credit rating (essentially the equivalent of an individual’s credit score) from the highest rating.

http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm

This means for the first time in history our word on repaying our debts was brought into question, an action directly attributed to our leaders’ actions.  How does this reflect on the standard of integrity we as a country value?

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July 29, 2011

This is not a silly question, but rather an essential one if we as voters, the constituency, are to uphold our responsibility of being informed citizens.  It seems that the current corrosive political debate on US public finances would benefit from some clarity on definitions.  There seems to be uneven education among citizens that politicians, aggressive to forward their own agenda, are abusing to make inflammatory but logically flawed public statements.

The annual budget is developed by the President and presented to Congress annually.  Congress than debates it, modifies it and votes to see if a majority approves it.  Congress then forwards the approved budget to the President, which may or may not contain changes from the President’s original version, for Presidential approval to become law.  If the President vetos or rejects the budget, Congress can force the President, and by extension the Executive Branch and the US Government, to accept it with an affirmative Senate vote of 2/3.

The annual deficit is the negative difference between the country’s revenue and expenses (meaning as a country we spend more than we make).  As detailed above, both Congress and the President, unless a Presidential veto is overridden by Congress, approve an annual budget with a deficit.

The national debt is the total amount of money we have borrowed to pay for the cumulative annual deficits. This is comparable to growing credit card debt as it is unsecured, backed only by the full faith of the US government for which we have an intention to pay.  The US government has not defaulted on its debt.

The debt ceiling is the statutory or legislative limit Congress places on the Executive Branch which limits the total national debt the country is permitted to hold.  From time-to-time, Congress has voted to increase this limit to support the budget deficits both Congress and the President have approved.

[writer’s note: A finer point is that “the debt limit only allows the Treasury to borrow funds to pay for existing obligations that Congress and the President have already agreed upon.”1  Politicians are arguing whether or not they should borrow money to pay for something they have already agree to spend money on, when they knew would need to borrow money when they made the decision to pay for it!]

What appalls me today is that current politicians continue to push items to the edge.  The United Stated borrowed all that it was allowed to by Congress on approximately December 31, 2011.  To make it to mid-February as the popular press reported, this took extraordinary, emergency  measures that are now commonplace just to pay interest on our bonds and other financial commitments.  While not the financial gimmickry of WorldComm, Enron, or financial institutions during much of the 2000s, it is uncomfortably close to robbing Peter to pay Paul.]

A beautiful part of the American government is the numerous checks and balances in place.  There are many public comments about the abuses of one branch or another.  If one looks at the system of government in place, there is little action a branch can take that another branch does not have Constitutionally protected means to question it.  What appears to be increasingly happening is a minority voice screams that it is not getting its way because the other side is “cheating the system.”  The only way this can truly happen without recourse is if the voters approved a combination of a president and a majority in one or both house of Congress (the House of Representatives and the Senate) that lets the minorities’ vote be heard but also be overridden by the majority.  This is not cheating the system.  A Republic, a Representative Democracy, or a True Democracy does not mean one gets their way, only that the majority prevails and the minority has an opportunity to be heard.  Only through clarity, truth, and acting in the best interests of the whole can our system of government reach its true potential.

References

1. Felsenthal, Mark,  et al., U.S. debt limit vote set for Wednesday; Obama likely to sign, January 20, 2012, Reuters, Retrieved from: http://www.reuters.com/article/2013/01/22/us-usa-fiscal-obama-idUSBRE90L0QC20130122

Notable Gun Violence that Spawns Gun Control Debates: Underpinnings and Difficult Questions

January 18, 2013

There are four heinous acts of gun violence repeatedly being referenced in recent media stories.  Each appears to have strikingly different circumstances and equally thorny questions.  The four are: the movie theater shooting in Aurora Colorado; Sandy Brook Elementary School, Newton Connecticut; Columbine High School, Columbine Colorado; and Virginia Tech, Blacksburg, Virginia.  I think an objective examination of these difficult questions is necessary before rushing contentious solutions whose very debate elicits a visceral, emotional response.  There is a lot to unpack in a discussion that requires much exploration.

At Columbine High School, Columbine, Colorado, the two students apparently legally purchased at least some of the weapons used.  There were accusations of excessive bullying of the two gifted students by other students and that teachers let kids-be-kids and did not intervene.  While not the only factor, should there be better guidelines for the teachers for intervention?  What is the responsibility of the parents?  What do we as a society accept as the social norm for tolerating bullying?  What are acceptable responses to those who intentionally and excessively agitate?  It seems that this may have been a delayed response from a child without socially accepted (or even defined) responses who resorts to violence.

At Virginia Tech, Blacksburg, Virginia, in 2007, the perpetrator legally purchased two handguns though his mental health status should have made him ineligible.  Gaps between state and federal laws did not appropriately tag him as ineligible in the mandated NICS database check.  These gaps were later narrowed through revised state and federal statutes.  There were accusations that a previous institution, in complying with its interpretation of the US Privacy Act, did not notify Virgina Tech of its concerns regarding the perpetrator’s mental health.  It is uncertain to me if this knowledge would have prevented the killing of 31 students or stopped the perpetrator from violating the school’s firearm ban.

In the Aurora, Colorado movie theatre shooting, the perpetrator had legally purchased the weapons for illegal use.  Again, that is a difficult circumstance to non-intrusively screen for.  The perpetrator is still awaiting arraignment as of this article’s writing.  I am interested in what the defendant’s plea is and if an insanity defense is pursued.  Further did the mental health services or professors fail to detect or act on the knowledge of these mental health claims.

In Newtown, Connecticut, the perpetrator shot through the locked doors of Sandy Hook Elementary School after murdering his mother with her weapons in her bed.  Before weighing the pros and cons of requiring bullet-proof doors and windows, were the weapons used locked in a firearms safe or otherwise secured?  How did the perpetrator gain access to weapons there were not his?  What is the gun owner’s legal responsibility to ensure positive, secured control of one’s weapons?

I do not believe that there will be absolute security and that we can eliminate all public acts of violence in school or otherwise.  The level of control required seems oppressive and, hopefully, unacceptable to American Society.  We have already seen this on a notably larger scale with “terrorist acts,” itself a slippery phrase: The September 11, 2001, attacks on the World Trade Center and the 1995 Sarin gas attacks on the Tokyo subway system.  Those determined to perpetuate acts of violence will find a way regardless of the safeguards put into place.  We can increase the safeguards to reduce the probability, but I do not believe I will be perfectly safe.

On the whole, I think the underlying issue is less gun control but rather the tension between two sides: a civilian’s right to all rights—unless restricted by federal or state governments–and those rights which the government regulates in the best interest of the citizenry as a whole.  We have seen this play out in history as those on each side struggle for dominance and enforcing its will on the other.  Prohibition is an excellent example.

At least three of these attacks show premeditation, two of which were substantial.  At least three directly involve mental health professionals.  All perpetrators were of the legal age to purchase firearms.

A common thread appears to be the inability, unwillingness or lack of a framework from those in a position to evaluate or stop the contributing factors to act.  Conversely there is a point where rules and regulations cannot be enforced all the time with 100% effectiveness.  It seems impractical to close an open-college-campus and require airport level security at its boundaries.  Even if implemented would that have prevented the killing?  An equally impractical solution would be requiring all students to  undergo mandatory mental health evaluations at regular intervals starting in elementary school,

There are some less invasive, but no less uncomfortable questions, that I have not heard answers to in the mainstream press:

  • How old must one be to purchase a handgun? to purchase a rifle?
  • What is the age to posses either?
  • Do states differ between the ability to posses/own and use?
  • Is there a different age for use with and without adult supervision?

For example, can a 15-year-old use a rifle hunting with his dad but not by himself?  When can he use one by himself?  When could he legally be given one as a gift?  When could he purchase it himself?

Further, should registering a weapon and a license to use a weapon be separate?  We have established a requirement for driver licenses for on-road vehicles.  There is an interesting graph in a Bloomberg article comparing traffic fatalities to firearm related deaths.

http://www.bloomberg.com/news/2012-12-19/american-gun-deaths-to-exceed-traffic-fatalities-by-2015.html

While one can argue over the statistics and the method for forecasting, both caused between 30,000 and 35,000 deaths in 2011 and offer up an opportunity to compare the two standards of regulation.

The more I explored, the more complex this topic revealed itself to be.  I believe the unraveling of this topic is yet incomplete and that presenting my thoughts on possible solutions is premature.  I do believe that a calm, rational, non-polarizing conversation needs to be had.

Finite and Infinite Games: How Politics Fits In

January 11, 2013

It has been insightful reading news articles and political commentary as 2012 came to an end. There was relief with the brief reprise from the political drama. Then there were individual politicians holding press conferences with posturing, grandstanding, criticisms and promises that next time the results will be more to his wanting. This was generally followed by the disturbingly continued use of yesterday’s news today as justification for political election plans years from now.

I was surprised to find most news articles in these fevered days before the automatic funding cuts placed focus on the coinciding expiring tax cuts and not sequestration itself. The latter is the far larger problem but its impact on the constituency is less direct than the then pending tax increase.

Perhaps because it is a significantly more complicated, politically charged issue, it just makes a more difficult, rare story. Perhaps this is the nature of politics, but to me it has the feeling of another poorly-scripted reality television show.

(Are you feeling lost in what sequestration is? The State of Arizona’s Department of Education contracted for an excellent summary on that here http://www.azed.gov/no-child-left-behind/files/2012/07/sequestration-cheat-sheet.pdf)

My question: If we made such little progress over the preceding 15 months, even with a bi-partisan committee formed to address the matter, what will be done differently in the next two months to avoid repeat of December 31. I do not see public reactions from politicians encouraging or desiring this. That is disturbing to me. Today’s colloquialism describing this is “to kick the can down the road” to describe the constant state of delaying the tough decisions.

I am suddenly reminded of “Finite and Infinite Games” by James Carse.  In his book, finite games are those governed by an agreed upon set of rules and have a defined beginning and end.  The rules cannot be changed and the object of the game is to win.  The outcome of the game is not known beforehand.  An example would be a football game.  The players and spectators know the rules, but no one knows for certain which team will emerge victorious.  Games do not have to be games or sports in the traditional sense and can be fun or serious.  War, for example, is a finite game played until one side concedes victory to the other.

Conversely, in an infinite game the goal is the keep the game in play.  Hence the rules must change if they will bring the game to an end.  It is a game without a defined beginning or end.  The philosophical example in his book is life.  The book then continues on to provide other lenses to view the world that, while not contradictory to this writing, would generate unnecessary clutter.

As I watch college football Bowl Games I contrast them with politics.  Interestingly, politics seems to be morphing into an infinite game.  Politicians, regardless of ideology, seem to prolong their time in office by avoiding the difficult questions for fear of failing re-election.

This exposes a critical flaw in American government.  What is the career path of a politician?  What does a 45-year-old politician do after holding elected office for only a single or a few terms?  There is not a compelling incentive for politicians to leave and there can be a sharp penalty for leaving voluntarily or involuntarily through a failed reelection campaign.

This introduces career politicians who act not in the finite game of a term but rather as the infinite game of maintaining political careers.  This conflict of interest between politicians and American citizens drive politicians to avoid difficult conversations and accountability.  These are both aspects of a finite game and run contrary to the career politician’s interest of an infinite game.

This maladaptation of the political process in not in the spirit of the Philidelphia Convention which drafted the US Constitution.  As history tells us, this was not a document created by unanimity.  The divides were startling and only 39 of the 55 delegates signed the final document.  Yet decisions were made in the interests of the country that were not to the complete satisfaction of all.  All of this happened in less than four months, between May 25 and September 17, 1787.  I cringe in dismay that the current Congress, irrespective of political party, could not accomplish a fraction of such a dramatic feat.

An interesting twist is that the finite games of political terms provide the necessary conditions to inspire action today.  For they inhibit procrastination and self-serving delays with a limited time for action before one’s replacement arrives.  This continual renewal is needed to protect perhaps the most important infinite game: freedom.