$15 Trillion in Hundreds

Here's an interesting graphic made by designer Oto Godfrey.  It shows what $15 trillion dollars (a little more than the national debt limit) would look like if stacked-up in hundred dollar bills.

$15 trillion USD

It's a lot of money, whether or not it dwarfs the Statue of Liberty, but the graphic puts it into an interesting perspective.

Cain Repents

Herman Cain has apologized for his anti-Muslim comments.  The GOP presidential candidate had previously claimed that communities had the right to prohibit Muslims from worshiping within the community.  As was argued last week here at ANR, Cain's commentary and understanding of the constitution was not only wrong but "unfortunately damaging to legitimate Republican candidates who have been unfairly linked to this Islamophobic mentality".

Fortunately, Cain has seemingly received the message after meeting with a Virginia-based Muslim group.  Cain released a statement saying:

While I stand by my opposition to the interference of shariah law into the American legal system, I remain humble and contrite for any statements I have made that might have caused offense to Muslim Americans and their friends.... I am truly sorry for any comments that may have betrayed my commitment to the U.S. Constitution and the freedom of religion guaranteed by it. Muslims, like all Americans, have the right to practice their faith freely and peacefully.

Thankfully, his Muslim counterparts believe that his change of heart is sincere.  Leaders from the Muslim group say that Cain was able to clear up some of the misinformation that had been fed to him, enabling Cain to draw fruitful parallels between the plight of Muslim-Americans today and that of African-Americans during Cain's childhood.  This was a linkage Cain had refused to making in his original discussion with Fox New's Chris Wallace.

It is laudable that he realized the errors in his thinking and comments - hopefully it will stick.  America is far too torn by divisiveness for this type of behavior to continue.  Furthermore, Republicans have far too much to accomplish in reforming this country to be distracted by demagoguery that is not only hurtful but far removed from the realm of serious issues.

The Entitlement State

The Wall Street Journal provides what they call "a short history of the entitlement state."  Unsurprisingly, the essay concludes, "The looming debt downgrade only confirms what everyone knows: Congress has made so many promises to so many Americans that there is no conceivable way those promises can be kept."


The Journal is right to peg so much of our dire fiscal straights on the over-inflated welfare state.  Beginning under FDR in the 1940s, the WSJ tracks the growth of entitlements through LBJ's Great Society and the Social Security problems of the 1970s and then onto Obama's profligate spending today.  While correctly arguing that the left's counter-argument of military spending is a red herring ("But national defense spending was 7.4% of GDP and 42.8% of outlays in 1965, and only 4.8% of GDP and 20.1% of federal outlays in 2010. Defense has not caused the debt crisis."), the editorial is fair to pin some of the blame on the GOP.

Mr. Bush and Republicans did prove after 9/11 that the Washington urge to spend and borrow is bipartisan. Republicans launched a Medicare drug benefit, record outlays on education, the most expensive transportation bill in history, and home ownership aid that contributed to the housing bubble. The GOP's blunder was refusing to cut domestic spending to finance the war on terrorism. Guns and butter blowouts never last.

Whatever nuanced disagreements one has with this argument, the fact is clear that the federal government is spending far beyond its means.  Much of this is arguably the by-product of a process that encourages a lack of forward-thinking.  The American system - and to some degree human nature - encourages politicians to dole out perks today while placing the costs on future citizens.  As time progresses, entitlements are increasingly piled on and rarely are forward-looking politicians able to remove these newly constructed "rights".  Political and moral arguments are marched out to defend these handouts and so the fiscal burden grows.

To be fair, the blame cannot solely lie with politicians, but must also lie with the electorate who votes for politicians who swing perks their way.  Individuals and groups across the political spectrum lobby politicians for special treatment, not realizing or simply not caring that someone else will have to pay for it.  Even the most stalwart small-government folk are resistant to relinquishing the handouts that they receive (Medicare?).

This is a losing mentality - a short-sighted and fatal way-of-life.  Americans have, for far too long, thought about the benefits they receive from the government separately from the costs that are required to pay for these perks.  It has always been someone else or some other generation that will pay.  But this model of government has proven it cannot endure for any prolonged period of time.

The fiscal sanity of our government and the future of the state demands that we, as a nation, rework our way of thinking.  We have become far too comfortable, as individuals and a society, living beyond our means, but it cannot continue.  Citizens need to reevaluate what they expect to have and what they want others to provide for them.  Remember the government does not produce anything.  Whatever is provided by the government comes in one end and, with some loss along the way, goes out the other.

Government should be restructured to perform the essential duties for which a government is needed; namely providing certain common goods (roads, defense, rule of law) that all citizens benefit from and are unsuccessfully provided by the private market.  It should largely cease its role as a wealth re-distributor, both across time and class.  Whatever the argument one has about this program or that program, the fact is they are unsustainable in our society.  The welfare state has only been maintained over the past seven decades because of the wool over America's eyes - it has been stomached because nobody has been paying for the full extent of the entitlement state.  This ultimate grand bargain has allowed politicians to appease both those who want more and those who do not want to pay more (oftentimes the same people).  But the free lunch has ended and Americans must reconcile themselves to reality - we can never over the long-run get more than we produce.  Americans must realize that government is not a magical tool to solve society's woes or to enact some vision of morality, but a limited means of coordinating essential services that a society needs.

Not Such a Hard Deadline

According to a New York Times report, August 2nd is not really the "hard deadline" that the administration has been arguing will signify the end of the federal government's ability to pay its bills.  For months pressure has been building to raise the debt limit by this date to avoid the catastrophic event of default.  However, as the Times reports it seems that there is at least another week of cash available to pay the government's bills.

It turns out the federal government is sitting on some extra cash.  

Thanks to an inflow of tax payments and maneuvering by the Treasury Department, the government can probably continue to pay all of its bills for several days after Aug. 2, providing potentially critical breathing room for Congress to raise the debt ceiling, according to estimates by several Wall Street banks and a Washington research organization.  

The consensus is that the government will not run short of money until Aug. 10, when it would be unable to cut millions of Social Security checks without borrowing more money. ...The government will exhaust its ability to borrow more money on Aug. 2, which is equivalent to maxing out a credit card. But there still will be cash in the federal wallet.  Some Republicans have expressed skepticism about the Aug. 2 deadline, describing it as an artificial line drawn by the Obama administration for political reasons. Analysts emphasize, however, that the deadline is real; it’s just the date that is inexact.

Obviously this does not obviate the need for some deal to, at least in the short-run, raise the debt ceiling with concomitant cuts in spending and some tax reform.  It does however provide the markets with some much needed time before "crisis" hits.  If these numbers are legitimate, it would be prudent for the White House and congressional leaders to seize upon them to quiet market psychology.  Winning a political battle is not worth sinking the economy.

Redefining Poverty

There is a problem of definitions in American politics.  Although not a new phenomenon, it is unfortunately one that is rarely discussed.  In many instances, challenging the accepted political definition of certain words leads to harsh, acerbic, and often unwarranted attacks by those who wish to defend a political definition for their own partisan uses.

In a recent report, the Heritage Foundation has courageously taken a stand against the definition of one of these words - "Poverty".  The abstract to the full report states the following:

For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.

The report continues by discussing the standard of living experienced by most "poor" Americans and how high these are, both in historical comparisons and vis-à-vis other countries.  It makes the key argument that there is a need to separate the truly destitute (eg. those that chronically lack shelter, food, or clothing) from those that are just defined as poor.  Due to limited resources, this expansive definition of poverty has not only injured the truly destitute but provided for those that are arguably not needy.

The U.S. Census Bureau, which determines the poverty thresholds, bases their calculation of these thresholds on a 1963 study that looked at the Department of Agriculture's low cost food plan.  Surprisingly, it was not designed to reflect the daily needs of an individual or family.  "...[They] did not develop the poverty thresholds as a standard budget... a list of goods and services that a family of a specified size and composition would need to live at a designated level of well being." 

While the Census Bureau's "poverty thresholds" are only used for statistical purposes, the Department of Health and Human Services (HHS) further complicates issues by setting forth "poverty guidelines" for administrative purposes.  While these are generally based on the Census Bureau's numbers they are modified for various programs (for instance scaled up by some percentage).  These guidelines are what are used in most welfare programs.

Arguably both the Census Bureau's and HHS's definitions are exceedingly arbitrary.  As the Heritage report empirically supports, far too many are able to achieve substantial luxuries while nevertheless being deemed poor by the government.

A secondary source of definitional challenge comes from politicians who often use the term "poverty" in a relative sense.  A relative definition of poverty signifies that poverty is determined by some distance from a measure of "middle-class" - for instance the median income. This necessarily implies that the problem of poverty can never be solved, unless all incomes become very narrowly distributed around a median income.  Taken to its logical conclusion, in some perverse world, poverty could easily be eradicated by evaporating the wealth of the richest in a country without any concomitant change in the position of the poorest. By thus diminishing the "wealth gap," relative poverty would no longer exist. Obviously such a precept is laughable - no state would be better off by removing wealth from society - but it nevertheless is the natural conclusion of a doctrine of relative poverty.  In reality, "relative poverty" is nothing but a euphemism for "income inequality."

Instead, poverty should be measured in relation to what a person needs to achieve certain necessities, such as food, shelter, and clothing. By using an such an absolute measure, poverty is defined by essential characteristics not an arbitrary statistical formulation or relative comparison. This is undoubtedly a more just definition of poverty and puts the state in a better position to provide resources to alleviate poverty. It also provides proponents of the welfare state with a better position from which to defend the need for state assistance in eradicating poverty.

[By claiming the American definition of poverty is wrong, one does not mean there are not people who truly are in need, nor that there are not those who are truly poor in America.  But it does imply that a changed definition can have significant implications for welfare policies.]

It is to be expected that vested interests will attempt to avoid any discussion, let alone any changes to the definition of poverty.  Expansive definitions of poverty allow numerous constituents (particularly but not exclusively of the Democrats) to gain benefits at the expense of others.  It is unlikely that recipients of handouts (whether low- or high-income) will be willingly to abdicate their lucrative positions.  This is unfortunate and unfair.  In such times of economic difficulty and budgetary disorder it is necessary to carefully study if our current definitions and resulting policies have stepped beyond what is appropriate and into the realm of social and economic largess.

Arguably, much of our welfare state has become a system of wealth redistribution rather than a social safety net.  This is not so much a critique of the concept of the welfare state but of its abuse to fulfill abstract notions of social justice.  As Heritage points out, our working definition of poverty has become one much more about "income 'inequality'" than one of need.  This has arguably caused the state to venture far outside of its appropriate bounds and has indubitably contributed to our expanding fiscal woes.  According to the authors of the study, "President Obama plans to make this situation worse by creating a new 'poverty' measure that deliberately severs all connection between 'poverty' and actual deprivation... giving the President public relations ammunition for his 'spread-the-wealth' agenda."  A redefinition of "poverty" to more accurately reflect individuals' needs may not only help alleviate America's budgetary problems but allow a misappropriation of the system to revert to its moral underpinnings.

Cain and Un-Able

Herman Cain should be ashamed.  In a weekend interview with Fox's Chris Wallace, the Republican presidential candidate argued that communities have a right to ban the construction of mosques.  Cain argued that

[o]ur Constitution guarantees separation of church and state. Islam combines church and state. They're using the church part of our First Amendment to infuse their morals in that community, and the people of that community do not like it. They disagree with it.

Cain's interpretation of the First Amendment is undeniably erroneous.  The separation of church and state is meant to both protect religious institutions from undue influence from the government and protect individuals from undue influence from a state religion.  It was never meant to be used as a weapon by communities to persecute or restrict those of another faith.

Even if one assumes that Cain's understanding of Islam is correct - namely that as a religion it is unable to separate its religious doctrines from its conceptualization of the rule of law - his remedy is far from appropriate.  Religions or other groups that profess ideologies that run counter to precepts in the constitution are not to be repressed due to their beliefs.  Every Muslim may want to turn the United States into an Islamic state (most assuredly do not), yet that would not warrant preventing them from practicing or even preaching their ideas. 

Instead, it is the responsibility of the state to disallow violations of the constitution.  The courts, for instance, should strike down laws and regulations that violate the precept of separation of church and state, whether such laws are based in sharia, Christian or Jewish law.  If such checks function properly (and they largely do), from the perspective of the First Amendment there should be little reason to interfere with the religious practices of any group in America.

Protection of minority religions is precisely why the concept of separation of church and state is necessary.  Muslim-Americans should be protected by it not persecuted under it.  Whatever their beliefs may be, as long as they stay within the community and are not being forced upon others they should have the right to worship as they see fit.  Only when such forms of worship cross the line and lead to religiously-based law should the state step-in to prevent such behavior.  A mosque in Tennessee is absolutely acceptable; a law requiring the donning of burqas is not.

Cain's understanding of the constitution and his comments are an embarrassment to all Republicans.  Not that this long-shot candidate was every taken seriously, but his perspective is unfortunately damaging to legitimate Republican candidates who have been unfairly linked to this Islamophobic mentality. Republicans need to disavow such candidates and rhetoric if they hope to be taken seriously amongst the pivotal independent voters.