Deficit Reduction Act: A Modest Proposal

We've got to reduce the federal deficit. If interest rates rise even one percent we will be adding $0.14 trillion to the cost of running government. The following is a modest proposal.

First: Reinstate the tax on those whose incomes are over $0.5 million a year. We should address this issue clear of the Bush tax cut extension in which we gave away $100 billion.

Second: Make the tax rate on the income of derivative managers an income tax and not a capital gains tax. This is a tremendous give away to Wall Street who has bought a sizable majority of Congress.

Third: Royalties paid by companies to foreign potentates are currently allowed to offset against the corporate tax under the foreign tax credit. Exxon pays nearly nothing on its billions of earnings because of this credit. We have lost close to a trillion dollars in revenues over the past ten years.

Fourth: Eliminate the requirement that Medicare pay a claim within 2 weeks of a bill being rendered. Fraud has cost Medicare $100 billion in the last five years-particularly in South Florida.

Fifth: Eliminate cold war defense weapons from the Defense Department budget (do we need another nuclear sub, stealth bombers?) $100 million could be cut and no one would know the difference except Boeing and shipbuilders.

Does anyone in Congress have the guts to take on even one of these issues?

Retraining the Lost Generation

Our elected officials are enamored with spending funds we don’t have on “Defense,” like wars that have no significance for our homeland- Vietnam and Iraq. We do have a war we should be fighting, but we appear ignorant of it. All indications are we are losing this war, the training of a workforce that is competitive in this world economy.

Unemployment, today, can be traced to the construction industry. The overbuilding of the period from 2001-2007, spurred on by ridiculous lending by banks and mortgage companies, made available well-paying jobs for people who did not need education. Construction jobs stimulated jobs in ancillary industries for wood products and structural steel, to mention two.

I am old enough to remember to have worked on a similar structural economic problem that became acute in the early 1960’s. We had emerged from World War II and the Korean War. The defense industries that had thrived in this period were seeking government largesse that President Eisenhower warned against: the military-industrial complex. But the steel industry and its major ancillary industry coal mining were in increasingly desperate shape.

The Appalachian Regional Commission was created to seek solutions to the horrific poverty that we were seeing in states like West Virginia and eastern Kentucky. Leaders of cities like Pittsburgh saw its future in industries other than steel. The Congress was persuaded to invest in education through the National Defense Education Act.

Today, we do not have such leaders as the progressive, David Lawrence, and the ultra conservative, Richard Mellon, who combined to shift from the pollution of steel to transform Pittsburgh to where you can now see that the sky is really blue. We do not have the sharp political wits that made the Kennedy-Johnson period a political success story.

If it takes using the Defense budget, perhaps that is where our emphasis should be. We have a war in the U.S., but it is not in Iraq, Iran, Israel, but at home. We are growing an increasingly uneducated work force at just a time when just the reverse is needed.

Let’s shift our defense spending from planes, tanks and guns to educating our future generations and retraining the lost generation.