Final Word, Next Step: Preparing for America's Plunge…

THE SIGNS simply aren’t visible yet. We’re in a world where people’s minds can’t process the difference between millions, billions, and trillions…where borrowing costs remain very low…where the stock market is going up, bipartisan budgets are getting passed, and fears of deflation actually loom larger than those of inflation. So nothing substantive addressing our long-term outlook is going to happen anytime soon….

Nothing will happen until America’s essentially apolitical citizenry begins seeing signs of trouble and decides to become politically engaged. And that’s not likely to occur until the mid-2020’s. But the problem is, even when it does, we won’t be able to overcome our very steep and sobering challenges unless we have, in the meantime, managed to create a political system where legislators are once again rewarded politically for making tough decisions that advance the Greater Good, and NOT for pleasing a few narrow factions that have been meticulously drawn into their districts.

In other words, if incumbents are still choosing their voters and their opponents’ voters when the Crisis comes, then we’re screwed…really screwed.

Living the Dream:  Still Waters before the Falls

Much is made of our current single digit unemployment rate, and any number of other “crises.” But all in all, historically and globally speaking, we’ve got it pretty good, with secure supplies of affordable energy and a slowly recovering economy. Relatively affluent “Baby Boomers” are enjoying “their time” and are entering retirement at an average rate of 10,000 people per day. And most of the rest of us have sufficient employment and/or “eligibility” to collect enough wages and benefits to at least keep our heads above water.

But we’re not paying for everything we’re consuming. And while annual budget deficits are indeed falling, the Congressional Budget Office (CBO) expects them to begin moving up again in 2016. The CBO further projects that Uncle Sam’s pile of I.O.U.’s is expected to grow by another $8.8 trillion over the next decade, meaning we’ll consume about $8,8000,000,000,000 more than we’ll pay for, forcing 2024’s Treasury Secretary to finance over $26,000,000,000,000 in national debt and make preparations for financing even more.

Some may say that since the Dollar is the world’s Reserve Currency we can loan ourselves as much money as we “need.” And actually, we’ll do just that … until one “surprising” day when we suddenly can’t… That day will come, and it will represent the world’s “small time” economies finally (collectively) becoming more competitive than the Dollar economy – an economy that will ultimately stall under the burden of servicing a debt that's perpetually growing to ever-larger multiples of America’s annual economic output (GDP).

And it won’t be some super-economy’s currency like China’s that supplants the Dollar's supremacy all by itself. Rather, it will be a “pack” of vigorous global currencies that, in addition to China’s Renminbi, may include those of South Korea, Indonesia, Canada, Mexico, Brazil, Australia, Japan, the UK, and a re-engineered Eurodollar that's bolstered by an increasingly vibrant Germany and the departure of the likes of Greece and Spain. Transnational virtual currencies like Bitcoin will be in the mix too…

One inevitable day, global investors will spurn the U.S. and begin directing their investments to the economies mentioned above. U.S. interest rates will spike in a vain effort to win them back. And our cushy, fabricated world will come to an end.  Down the Falls we will plunge….

Surviving the Plunge

When the Crisis comes, Radical Moderates will be needed to lead us through it, because only RMs will be willing to do what’s required – namely make every American equally mad. Surviving America’s economic plunge will require making Servicemen and Veterans just as mad as postal service customers, who will be just as mad as federal employees, who will be just as mad as affluent and middle income Medicare and Social Security recipients, who will be just as mad as heretofore subsidized corn farmers and ethanol manufacturers, who will be just as mad as multi-millionaires unable to deduct mortgage interest on their third homes from their taxes, who will be just as mad as healthy people no longer able to scam SSI Disability Insurance for benefits, and so on and so on…

RMs solve major issues because they’re comfortable in the Real World. Take the issue of immigration reform, for example:  Here, Conservatives possess the technically correct policy – "illegal" immigrants are in fact illegal. But Reality confounds Conservative policy-making because any plan to deport roughly 11 million people won’t be worth the totality of its costs, both direct and indirect. Besides, America doesn’t have the stomach for enacting such a plan, so the Conservatives' plan must be moderated with pragmatic inclusions of Amnesty.

Those who assert that the deportation of 11 million people is in America’s interest or that we can solve immigration reform without ANY amnesty are being intellectually dishonest. Those who refuse to support ANY reform plan that includes some degree of amnesty are simply being disingenuous about actually wanting to solve America’s dysfunctional immigration system.

Ultimately, Reality complicates problems and Radical Moderates solve them. But here’s the Catch:  unless we end gerrymandering by the mid-2020’s, RMs won’t have the opportunity to work their magic during the Crisis, because they’ll never get elected – they’re just too much of a threat to the special interests that gerrymandering protects.

Gerrymandering:  America’s Existential Threat

Long ago, James Madison asserted that a Constitutional Republic would work in a large country such as ours because we could extend our Representatives’ “spheres of representation” to include multiple competing factions in each of their districts. Madison reasoned that Congressmen who were simultaneously lobbied on all sides by multiple and often opposing factions would eventually stop trying to please everyone and decide in the end to just “do the right thing.” They would judge partisanship political foolishness and would defend their votes based upon their likelihood to promote the Greater Good as opposed to how much they promoted the interests of their districts' factions.

Today, James Madison is rolling over in his grave… Computer assisted gerrymandering has generated an “Incumbent Protection Plan” that's rendered most American political races non-competitive and produced a class of representatives who have little incentive to apply critical thinking to torturous trade-offs, who focus instead upon pleasing the folks who were chosen to “butter their bread.”

Bottom Line:  If we don’t fix this systemic political cancer before the Crisis comes, then America’s best days are behind her. And for that reason, beginning January 1, 2015, I will begin leading a bipartisan effort called Fair and Independent Redistricting for Maryland (FAIRforMD). Its purpose will be to educate Marylanders on the existential threat that gerrymandering poses and to get legislation passed before Maryland’s next redistricting round in 2022 that will take redistricting authority out of the hands of Maryland’s incumbents and put it in the hands of a randomly selected citizens commission that is apportioned according to state party registration percentages and comprised of Marylanders who have voted before and are willing to learn the principles behind drawing fair legislative boundaries that advance the Greater Good.

I hope you’ll join me in this effort, because a united citizenry will be required to convince Annapolis’ incumbents that they’ve more to lose politically by supporting gerrymandering instead of fairness. Fortunately for us, according to an October 2012 poll, more than two-thirds of Maryland’s voters already support the notion of an independent commission redrawing legislative district boundaries instead of letting elected officials do it.

And so I close my 2013-14 Radical Moderate blog with a reminder of America’s top 15 priorities and the recognition that achieving #’s 2-15 will depend largely upon whether or not we achieve #1 first…

1. Fix our political process by instituting Independent State Redistricting Commissions to put an end to Gerrymandering.

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2. Pass comprehensive immigration reform similar to bill currently before Congress

3. Apply “Chained” Consumer Price Index government-wide for inflation adjustments

4. Reduce corporate tax rate by 20% (to 28%) to make U.S. corporations more competitive in the global economy; end corporate loopholes

5. Eliminate backlog of Continuing Disability Reviews (CDRs) for Supplemental Security Income (SSI, aka “Disability”) recipients— Every dollar spent gleans over $8 in savings

6. Extend the tax favored exclusion for health insurance “consumption” to small business owners, and raise the deductibility cap on health savings accounts

7. Give Congress 45 day Authority to vote on line item budget rescissions proposed by the President

8. Limit the mortgage interest deduction to 100% deductibility on the first $250K of a primary residence mortgage, 50% on the next $250K. Phase in changes and grandfather current mortgages

9. Embrace North American energy, building interstate energy infrastructure while surging scientific research on renewable energies and ending energy production tax credits

10. Repair Affordable Care Act

11. Reform Medicare and Social Security with up or down votes on comprehensive sustainability packages submitted by bi-partisan commissions

12. Replace unlimited federal matching funding of state Medicaid benefits with block grants, which incentivizes states to weed out fraud, i.e. stop paying benefits to dead people & illegals

13. Build infrastructure that lowers transaction costs, i.e. deeper ports, railroad tunnels that accommodate double-stacked rail-cars, rural broadband networks, etc.

14. Index Alternative Minimum Tax brackets to inflation

15. End tax subsidies for oil companies, ethanol manufacturers, and hedge fund managers

THANKS FOR READING!

Your faithful Radical Moderate,

Larry Smith