Tuesday, February 2, 2010

A House Divided, A Loan Again, Naturally


It appears that the Americans have left Capitol Hill to groups incapable of working together towards a common goal. They call themselves “Democrats” and “Republicans,” but the labels are interesting predictors of how they will vote. Yes, the Democrats are divided, seemingly into two sub-parties: the Blue Dog fiscal conservatives and the traditional liberal factions. Republicans will predictably oppose most any major policy shift recommended by the President, because, it seems, they believe if they support such a program and it works, Obama and the Democrats will get the credit, and frankly they have the Democrats on the run and pinned against the wall.

“One day after the president upbraided Congress in his State of the Union address for excessive partisanship, Senate Republicans voted en masse against a plan to require that new spending not add to the deficit (it passed anyway as all 60 members of the Democratic caucus hung together). And some Republicans peremptorily dismissed Mr. Obama’s main job-creating proposal, expressing no interest in using $30 billion in bank bailout money for business tax credits [for new hires].” New York Times, January 29th.

If corporate profits are at stake, unless conservative voters clearly say otherwise, Republicans seem to be uniformly in favor of letting companies act within a “market economy” that clearly failed the nation in the most horrific way in this recession. If there is a social program that can create a spending allocation that looks like it might solve a problem or please a union constituency, liberal Democrats will fall all over each other to find the votes. Blue Dogs appear to be wandering about with no clear direction at all. What’s missing here? Americans.

Yes, Mr. President, the Union is in a state. You want to prioritize economic, national security issues and education… and lower the expectations on healthcare. Your Democrats are deeply divided, and the Republicans want lower deficits, lower taxes and vastly fewer programs. Good luck. If you are on Wall Street, you can spend on political campaigns without restriction, the numbers are jolly and the recession is so over… we do not need those job stimulants you seek. Look at the way economists are looking at the numbers: “The U.S. economy grew at 5.7 percent annual rate in the fourth quarter, the highest rate of gross domestic product growth since 2003 and up from 2.2 percent in third quarter. The rise, which beats expectations, was driven by business inventories.” Washington Post, January 29th. Forget about the unemployed and those who have lost or are losing their homes or the life savings that once was tied up in those homes.

Mr. President, you talked about crossing party lines to build new policies that will benefit the average Americans. But about half your legislators have already discovered that if they oppose such efforts, they become heroes to their constituents, so your efforts have fallen on deaf ears. It’s back to what’s best for “getting me reelected” even if that may be bad for America. Sorry, Democrats, you will have to live with the “horse-trade” that became the poster for all that’s wrong in Congress: Nebraska Democrat, Ben Nelson’s willingness to vote in favor of the Senate healthcare bill if his state could be treated differently from every other state in the union and avoid paying its fair share of Medicaid payment.

And an issue that has absolutely no business being partisan has become a political football… again. Education – with infrastructure – the only long-term investment that could even begin to hope to pay down the massive deficits we are incurring. And without dramatically improving our educational standards at every level, this country has nothing but a severe, dark downward spiral as its future. We will not be able to compete anymore. Young adults are being crushed by high tuition rates generating loans that they cannot possibly service. At every level, educational programs, both at public and private universities/colleges as well as primary and secondary schools, are being hacked to death, notwithstanding federal pledge of financial assistance.

As federal legislation aimed at making student loan repayments manageable stalls in the Senate, it seems pretty clear that Congress has given up on genuine long term goals that can only benefit the nation as a whole. The controversy is over whether the government should simply take over the student loans they have guaranteed, eliminating the banking sector as a middleman. Fiscal conservatives don’t want to take banks out of this profitable and low risk sector. They also say that making loans easier to pay back (by capping monthly repayment obligations to students) will take pressures off of universities and colleges to be cost-efficient… as if colleges and universities are spending in profligate ways in this current economic crisis. $80 billion is at stake, and eliminating a middleman definitely generates savings to the overall lending process.

And without infrastructure and education, exactly how do we generate enough future income to rise again? Think this is just hogwash? Look at the numbers. The Feb. 1st New York Times analyzed the $3.8 trillion budget recommended by the administration… showing a deficit of 11% of the nation’s gross domestic product, a staggering number, but this is even worse: “By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. In fact, in 2019 and 2020 — years after Mr. Obama has left the political scene, even if he serves two terms — they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water.

“For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.” We need Republicans and Democrats to stop pushing their own selfish, ideologue-laden agendas without regard to what’s best for America; we’ve got some real problems that require a united and focused leadership.

In the end, if this bickering does not stop, how do we convince our Congressmen and women that they way they are acting seems to be hell-bent on destroying a democratic process necessary for the survival of this nation? This factionalism is one of the most significant hallmarks of a civilization in decline… a beginning of the end… accelerated by a deficit caused by an unregulated economy run wild… a bursting bubble that could take America with it. Frankly, I’m not ready to throw in that towel… it really cannot be “every man for himself” at the expense of the country. I think we need to take a very careful look at what it really means to be a patriotic American.

I’m Peter Dekom, and I love this country!

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