The 47 percent dogs

Now I’m not saying that these three dogs registered to vote and cast ballots, but they clearly are wearing “I voted” stickers*. 🙂

They are also members of the 47% Club. They have never paid rent, are on food stamps and get feee medical care. You get three guesses on who they voted for.

The first two guesses don’t count.

All in jest, of course, but here’s hoping you voted today!

*They did not really register to vote nor did they cast a ballot. That would be illegal. Even in Ohio.

Send to Kindle

Emergency rooms, magical thinking, and the poor

Emergency Room

To hear Mitt Romney (and many others) tell it, Emergency Rooms are the physical embodiment of Mother Theresa, treating indigents like Jesus treated the lepers. The great seas of health care are suddenly parted for the poor and ill, and outstanding bills just miraculously become absorbed into the ether of write-off’s and tax exemptions.

This type of magical health care thinking isn’t limited to multi-millionaire politicians. Many in the public also believe ER’s effectively fill the wide gap between sickness and insurance. It’s a fallacy that has become so engrained that its standard line — get sick, get treated by an ER, get the tab picked up by someone else — goes nearly undisputed by those on both the right and the left.

That’s simply not the way it works.

Setting aside the fact that ER’s are not mandated to treat what their doctors may consider a non-emergency — a subject which merits its own, separate discussion — many uninsured ER patients find themselves saddled with bills they can’t hope to pay. These bills are not just from the hospital, but from outside physicians, diagnostic services, and laboratories, none of whom are mandated to treat the indigent or uninsured for free.

Depending upon the state and the hospital, uninsured patients may meet with a hospital social worker who will have them fill out forms for state aid or other programs. There is no guarantee of approval, and even when someone does qualify, benefits may not extend to other services rendered in the course of care.

On a trip across the US, I spoke to several people in dire straights due to medical debt. One of them was a homeless man in his 30s. John M. was a single laborer who was working a temp job when he was hit with over $8,000 in medical bills for non-work related wound that had led to a staph infection. In the hospital, he met with a social worker who helped him apply for aid. Later, he received notice that he didn’t qualify due to his income and status as a single person. The bills started pouring in, not just from the hospital, but from doctors whose names he didn’t recognize and labs that had processed his tests.

When bills like John’s go unpaid, hospitals and other businesses may “write them off,” but contrary to what many people may believe, this does not mean that they disappear. Collection agencies buy such debts for pennies on the dollar and then may vigorously pursue the patient-debtor, through judgments, wage garnishments, and bank account liens. To add to the confusion, medical debts can be bought and sold many times over, involving an almost incomprehensible string of collection agencies.

Like many people with medical debt, John attempted to work with the collection agencies on a payment plan, but there were too many of them, each demanding that their bill take precedence. Desperate for relief, John went to an agency that specializes in helping debtors reach payment agreements and was told he didn’t make enough to carry the minimum monthly payment that would be required. At that point, John considered filing for bankruptcy, but he couldn’t afford the attorney’s fees.

Four years after his illness, with his credit ruined and with several court judgments against him, John’s low wages were garnished and he could no longer afford his rent. He applied for a second job as a cashier at a home goods store and was told that they’d run his credit report as a matter of practice. It was the same at other places he applied. While he was never told why he wasn’t hired, he suspected that his low score had something to do with the lack of call-backs, particularly since he’d never had such a problem finding a minimum wage job before.

John scrambled for a cheaper place to live, but none of them were cheap enough to make up for the loss of wages, and all of them required better credit than his. He was told he’d need a cosigner or a larger deposit, neither of which he had. Feeling he had no choice, John quit his job and found work with another temp agency, hoping to outrun his garnishment and at least catch up on his rent. Within two months, the collection agencies had found his new place of employment and set the wheels in motion to collect their pay. John was eventually evicted. Jobless, he lived out of his 14 year-old truck for a while, but then his truck died and he couldn’t afford repairs. He sold it for scrap so that he could eat. He showed up at the county day labor office every weekday, hoping to make enough money to rent a motel room. Sometimes there was work, sometimes there wasn’t. Sometimes he slept in shelters, but many times he slept in the streets. When winter got to be too much, he scraped together enough to take a bus to a warmer climate. When I met him, he was among many of Florida’s homeless and his prospects for crawling out of the hole were dimmer than ever.

Of course, not all stories are as extreme as John’s, but the fact that some are is a stark reminder of how easily a life can be unraveled, particularly when medical debt can bring a host of life-altering consequences.

Some people do end up qualifying for State programs, and there are some hospitals which have developed their own foundations to assist in care, but there’s no national uniformity to the system. While an uninsured person at one hospital may qualify to have their ER charges reduced or paid for by another entity, another person, at another hospital, may not.

In any case, medical debt is on the rise and collection agencies are becoming increasingly aggressive in pursuing debtors.

The Commonwealth Fund, a private foundation that sponsors health care research, estimates that 22 million Americans were contacted by collection agencies for unpaid medical bills in 2005. That increased to 30 million Americans in 2010. – March 2012, USA Today

As the article in USA Today points out, credit may be wrecked even when medical debt is paid. Slow and late payments can stay on records for seven years, and as much as ten if there is a judgment involved. There is also a valid and growing concern that collection agencies are misusing the court system to have debtors thrown in jail, adding the element of warrants and jail time to people’s background checks which, like poor credit, may diminish their future employment and housing opportunities. Poverty by itself is a vicious cycle that is difficult to escape. Adding collections, garnishments, judgments, bad credit, and arrests to the list of obstacles can make it nearly impossible. In the bigger picture, it would seem to do more harm to our economy and social structure to keep people locked in the cycle of medical debt for years on end, rather than to offer them a real solution.

Despite receiving tax exemptions to care for the uninsured and poor, some hospitals have gone so far as to sue these patients for what they are owed. Others, as noted, turn their debts over to collection agencies. In the mix are the outside services which are not given the same exemptions, and which aren’t subject to the same guidelines.

The result of all of this is that both patients and the medical care industry are suffering, while collection agencies are growing richer. By 2007, the number of collection agents had doubled from the early 1990s, while industry revenue tripled to $15 billion (on $40 billion in collected debt).

So, no, emergency rooms are not the answer for America’s sick and uninsured. The illness that’s treated today should not result in years of financial consequences, which not only affects individuals, but society as a whole. To what end is a culture that binds people to medical debt in ways that may cost them their homes, jobs, and futures? To what end is a medical system that only increases the need for shelters, welfare, and other social services — while burdening the healthcare industry with millions of dollars in extra costs? An America that grows poverty is not as valuable as an America that grows potential. Anyone who would argue against that is as short-sighted as they are unreasonable.

Send to Kindle

I apologize, Governor Kasich

Northmont Kindergarten Sign

Dear Hon. John Kasich, Governor of Ohio;

I apologize for my sight-sightedness with respect to my opposition to your state education budget cuts and SB5, which sought to limit bargaining rights for teachers. Clearly these were bills designed to give smart-ass bloggers like me an endless supply of content for free.

Please forgive my lack of vision. I look forward to the endless bounty of your labors.

I remain your loyal subject,

Rufus Dogg

Northmont Kindergarten Sign

Send to Kindle

Meet the head of your new HOA; The Bank

Common wisdom was once upon a time that the bank did not ever want to own your home. It would try so hard to not own your home it would fall over backwards to work with you if you ever fell behind on your mortgage.

Until the housing bubble burst in 2007-08.

Everything has now changed. Banks want so badly to own your home that they will literally dodge your phone calls and letters attempting to restructure your loan or even work out terms with you.

Being rather old school, this sort of behavior puzzled me at first. What would a bank do with a house? They are not in the real estate business?

But they are. Getting into the real estate business is their way of turning lemons into lemonade.

When the foreclosure rate was insanely low, the cost to the bank to manage a house that was foreclosed on was too great for the return. But look what has happened since the bubble burst. The foreclosed homes have consolidated. Where there was only one home in a subdivision, there are now 20-40 homes or more. It now makes sense to hire property management companies to flip the house, maintain it and manage the renters*.

The banks are slowly owning large tracts of private property. They are becoming the de facto Home Owners Association. Eventually, they will be the loudest voice at city council meetings and zoning boards.

Are you noticing? Is anyone in Washington?

*We have had one such company rent out an old church and set up shop just right outside of Englewood. Their signs are on almost every distress property in every subdivision for miles. Like watching McDonalds expand.

Send to Kindle

Drug testing our way to a Master Race

Drug testing

Drug testing

In October, Linn State Technical College in Linn, Mo., notified its 1,200 students that they will have to take a drug test to enroll there

Florida requires citizens applying for pubic assistance to submit to a drug test. Supporters of the policies note that public assistance is meant to be transitional and that drug tests are increasingly common requirements for getting jobs. So, the argument goes, people get drug-tested all the time so it must be ok.

Only it isn’t ok.

The question is not if it is ok that we test welfare recipients but that we are testing people at all for drug use. It is not an invasion of their privacy. It’s about assuming they are guilty of using and proving they are not. It assumes that people who test positive (whether or not they really are positive) are unemployable, bad credit risks, stupid or unworthy of basic human assistance

We don’t test for alcohol yet alcohol kills more people and contributes to more workplace accidents than marijuana does.

If we are wondering how to create a “Master Race,” this is how we do it. Only employ people with high FICO Scores, no prison record and a clean drug test. The rest with any human faults and frailties we can leave to the ravages of poverty.

But that is probably ok as we work toward privatizing prisons and then replace public sector employees with prisoners who make less than a $1.00/day. They are already being put to work as highway workers and firefighters.

Maybe we can replace teachers with prisoners one day as well.

Send to Kindle

The vast chasm between the haves and the have-nots

Urban Street

Back several year ago (actually a lot of years ago) I found myself in Philadelphia for the first time ever, in a rental car, in the middle of January, very lost. I just needed to get on the freeway pointing to the airport.

Me and my travel companion got out at a gas station and asked someone how to get to the freeway. The man did not know. After several minutes, I realized this man was not being intentionally unhelpful, he just simply didn’t know. He had never driven a car in his life and had no reason to ever use the freeway. He probably never ventured outside his neighborhood his whole life.

….

Send to Kindle

Taxes and a disturbing trend

I have never filed a late tax return.

Ever.

It is not uncommon for state, local and federal tax departments to send my corporation a letter, asking for some explanation or asserting that I had not filed correctly or filed and paid on time, etc. I run a very tight ship and these matters usually get cleared up with a prompt letter and excessive documentation proving the date of filing, the date the check cleared and whatever else is needed to satisfy the anomaly.

I hire very good people. They have never been wrong.

It used to be that we would get a random letter every other year or so. It happens. Tax departments are very complicated with a lot of gears and levers and people pushing and pulling those levers. But lately, I’ve noticed that we are receiving letters almost quarterly from every tax department; from Ohio Department of Taxation to Ohio’s Health and Human Services to The City of Vandalia to the Internal Revenue Service. As of today, we have five outstanding tax issues.

FIVE!!!

I have no doubt that all of these will be resolved, but I have to ask: What the hell is going on here? Are these tax departments understaffed? I’d like to think that is the problem because the other alternatives is they are either stupid or malicious. That is not a road I’m willing to go down.

I have noticed, though, that no matter the outcome, the tax department always insists on assessing a late filing fee, even though the return was not late. Yes, we fight that but it is one more step in the process.

Maybe public sector cuts are not the answer. Small government may just mean that critical services gets rushed and too many mistakes happen. Mistakes like this cost private business a lot of money in extra payroll, time away from development, paranoid documentation practices and just needless pain-in-the-ass. All of this is real money.

As a private business, you can’t just ignore a tax letter. Really, not wise. It doesn’t matter how small you are, it has to be attended to right away.

This isn’t a “I hate paying taxes” rant. I get why we pay taxes. Like everyone else (except Warren Buffet) I would like to pay less. But mostly, I would like to not be on the crap end of these letters that seem to come in without rhyme or reason. If that means we should be increasing taxes to hire a few more people to make sure these mistakes don’t happen, I’m for that.

But this random “wheel of fortune” game we seem to now be on ticks me off more than higher taxes. This makes me feel like a sitting duck.

Send to Kindle

The I Could Do it Better Syndrome

InvisiblePeople.tv

You know them.

They’re the people who yell at the television on Monday nights, insisting that they could have caught that pass or avoided that tackle. They’re the ones who can’t attend a conference or event without telling other people how they would have made it more interesting. They’re the people who believe they can do everything better than anyone else, whether it’s blogging, forging a career, making choices, having a relationship, or even serving a charitable cause.

The I Could Do It Better Syndrome seems to affect only a small percentage of the population, but they’re a persistent and vocal minority that demands not only to be heard, but somehow validated. It’s not enough to address their criticisms — they want nothing less than complete capitulation. Yes, you are right and I am wrong. How may I serve you? What can I do to make you happy? Until they get the attention and agreement they want, the I Could Do It Betters won’t let up, at least until they find a new outlet for their hostilities.

There’s a man online who has been doing a remarkable job of bringing light to the issue of homelessness. It was his vision, his idea and his efforts that resulted in a mission that has gathered steam, sponsors and many, many supporters. And while I’ve been neutral in the past about social programs that “raise awareness” — believing that direct, one-on-on support is more critical — Mark Horvath’s InvisiblePeople.tv has gained my respect. His pinpoint focus and tireless travels across the United States and Canada have resulted in more than just awareness and sympathy. His interviews with homeless people have spurred real offers of help and assistance. Further, in giving the homeless a direct opportunity to tell their stories to the world — to look into the camera and in their own words talk about their situations and feelings — Mark has given a powerful voice to those “invisible” people whom society has often ignored or dismissed.

I’ve followed Mark’s journey online for about a year. While it doesn’t surprise me that his mission has been attacked recently by a group of I Could Do It Betters, what I do find disturbing is how far they’ve been willing to go to get other people to jump on their hateful (and I must say, seemingly jealousy-driven, bandwagon). They’ve tweeted his sponsors and threatened to never do business with them. They’ve made YouTube videos questioning his ethics. They’ve accused Mark of exploiting the homeless for his own gain, of being a limelight seeker, of not answering questions to their satisfaction — even of passing out the wrong kind of donated food. Their claims have gotten ridiculous and out of hand — they’ll criticize anything from Pop Tarts to socks — but they seem to delight in any opportunity to assail Mark’s “motives”, his tactics and his character.

Having followed Mark’s mission for over a year, I know that not even one of the accusations are even partially true. This is a simply a bold case of I Could Do It Better by people who, hypocritically, are seeking attention for themselves. They seem to resent the (well-deserved) praise InvisiblePeople.tv has received and believe they could do a better job with the resources Mark has gathered.

My question to the armchair critics would be — if you believe you could do better, why don’t you? Instead of all that energy spent denigrating one person’s efforts, why not build your own mission from scratch? What’s stopping you from rallying support for your own better ideas and solutions?

The answers are, of course, apparent. Lacking their own will, drive and ideas to actually affect change and improve the world around them, the I Could Do It Betters would rather imagine that they could — if only they were Mark. If only they had had the idea and put the work in. If only they had spent the great amount of time and care that Mark has gathering support. If only they were given the opportunity.

However, the I Could Do It Betters have to know that Mark wasn’t given his mission — he created it out of his own vision and ideals and then worked very hard to make it a reality. There’s nothing to stop others from doing the same (or even better) should they ever choose to leave the comfort of their armchairs and take the real-world actions they believe would be an improvement.

You can learn more about Mark Horvath and his mission to help homeless people by visiting InvisiblePeople.tv, or by following @hardlynormal and @invisiblepeople on Twitter.

Today’s post is a guest post by the novelist and essayist, Jane Devin. We’re delighted she stopped by to bark and walk in our back yard and welcome her any time she wants to wander in. If you haven’t already, buy her book, Elephant Girl. It is nothing short of amazing.

Send to Kindle

Jobs

Barack Obama on Labor Day

I was going to skate past Thursday and not comment on this big jobs speech that President Obama is going to deliver tomorrow, but then @caroljsroth tweeted this morning:

I want to know what #jobs creation efforts/policies you are looking for as a small business owner. What would incentivize smallbiz to hire?

Oh, crap! I took the bait and replied:

Guaranteed customers. Seriously, that’s what I want.

I know, I know, it was flippant and snarky but it was what bubbled up on my brain at that exact moment. And I just blurted it out. I think a lot of other small business people are thinking the same thing. Washington and the media keep asking the wrong damn questions.

Here is the small business reality: Yes, we know that by hiring someone, that person will then spend money into the economy and eventually, when there are lots of other small businesses hiring, that will create more demand for the goods and services we provide. We get that. We really, really get that.

Theoretically.

But on a practical level, we’re all sticking our heads out the store front, not seeing any potential customers and saying, “I’m not gonna try it; you try it.” just like the Life cereal Mikey commercial.

In the back room, the banks — who have nothing to lose because they will get bailed out — are pressuring us for personal guarantees on any loan we sign. If I am the first to stick my neck out and nobody else follows, it is MY house and MY car and MY retirement fund that I will lose. And my government will not give a puppy’s pooch about me. Same with the SBA and other government-backed loan programs. Modern-day natural selection.

But back to the original question.

The president will most likely do some tax policy deal. Ugh. Tax policy tinkering never works for small business because the only thing we hear is the ear-piercing screaming of our CFO who just got back from a workshop learning about all the changes to the tax code from the last time Congress messed with taxes. Yeah, we all hate paying taxes, but taxes are a sign of success. If you make money, you pay taxes. If you spend money, you pay taxes. If you are neither making nor spending money, taxes don’t matter; even if they are set at 100%. 100% of $0.00 is still $0.00! Congress can’t give us a big enough tax incentive to hire anyway, so just quit trying. Please quit trying.

Policy change #1: Quit farting around with the tax code. When you make these “deals” it only sounds like someone is getting screwed somewhere. And that someone be us. Leave it.

Put your money where your mouth is. US government, YOU hire people to do stuff. Start with writers, artists, sculptors, filmmakers and musicians to create works open to the public. If we see that work, chances are people you are paying will start buying our goods and services and we’ll have to hire people to staff up. Pretty soon, the private industry employees every other small business is hiring will start spending money on our stuff and Uncle Sam can quit hiring people. We’ll probably offer better wages and benefits anyway and then those government jobs will just dry up.

Policy change #2: Direct hiring. Do not give money to the states and private contractors to hire people. They will just use the cash to shore up their bottom lines and bloat their stock prices.

That’s pretty much what I want to hear tomorrow. I’m not going to, but that is what it will take.

Otherwise, it will be the same ol’ waiting game we’re all playing right now.

Send to Kindle

The real voting fraud in America

About two months ago, my 20-year old daughter needed to get a replacement driver’s license. I didn’t ask why because she came home, very excited and told me “I registered to vote. Now I can vote against SB-5.”

A few weeks later, she received her voter registration confirmation card letting her know where to vote and her specific precinct. All set, right? That was all she needed.

Not really.

About a week later, she gets this letter in the mail from the Montgomery Country Board of Elections.

This almost went unnoticed by her and me. Apparently, they could not verify her last name by her Ohio BMV records. The same BMV that issued her a driver’s license and maintained her identity for the past six years could not verify her last name which means she would not have been allowed to vote when she showed up at the polls in November unless she returned the “card.”

Seriously?

While I would not go as far as accusing the Montgomery County Board of Elections with purposely stalling adding a young, first-time voter to the rolls because she is likely to vote Democratic in a very Republican county, this sort of thing gives me pause.

A lot of pause.

Add to the fact that the letter was sent in a non-descript, non-official looking envelope, the letter looked like it was run through a copy machine several times and the “card” that needed to be sent back was just printed on the bottom of the letter, without perforation.

They are either trying to frustrate my daughter from voting or the State of Ohio is staffed with some incredibly inept employees. Either way, as a taxpayer of this state, I’ve got some serious questions.

And I need answers.

Send to Kindle

The stock market spiral. It may not be what you are being told

Stock market downturn august 2011

The broadcast media loves a good, tight narrative. Here is the narrative for the stock market downturn for the recent events happening on Wall Street.

Congress squabbles over debt ceiling, Tea Party was obstinate about debt and deficit, we came close to default, S&P drops rating, stock market reacts. Package that up with some pundits, repeat over and over and it becomes fact. Next story.

Only part of this is true.

Here is what I think is happening with the stock market. It is about as simple as the narrative, but admits that human behavior is behind all the numbers so that is always scary territory for economists. But we’ll give it a go anyway.

In 2008, the economy came to a grinding halt. Millions of people lost their jobs, many were on their way to losing their homes and since poor people don’t spend money, millions of businesses quit stocking inventories.

Corporations shed jobs and cut expenses and immediately became more productive and profitable just in the way we measure these things. When the economy started growing slowly, they did not re-hire people; they replaced them with technology that shows up every day, do not need a medical plan and will never saddle the corporation with a pension plan. Investors like that so they buy more of that company’s stock. And they bought a lot in the past two years, pushing stock prices higher. Investors were getting richer.

But you can not cut your way to long-term profitability. The life span of a “cost-cutting to profitability” plan is about 18-24 months. After that, if you are not growing revenues, your profitability will start to decline. Business knows that but they also know that the average “dip” between recessions is about 18-24 months. After that, people get tired of austerity, they start spending, jobs get created and the economy kick-starts itself into gear.

Investors also know this, but they never know exactly when they should be selling the stock. But the smart ones know they will sell the stock eventually because companies will start hiring based on product/service demand and their stocks will take a hit before going back up. Investors hate when companies hire; it means lower short-term profitability and long-term obligations. They like to sell before that “hit” happens.

The underlying reason businesses are not hiring is because they have no need to hire. There are few customers on the horizon. Regardless of what the GOP spins about tax cuts and regulations, the number one — and only reason — businesses are not hiring is because they do not see any customers. Period.

Taxes and regulations are things to either comply with or figure out how to get around when you really, really want to get to the dollars on the other side. To date, I have not met a businessperson who does not believe that in his/her heart. Have you?

We are at about the 24 month mark when the economy should be swinging upward. Only it isn’t and the only organization with the will and means to spend money to get things kick-started — the US Federal Government — is now in a Tea Party-forced cost-cutting frenzy. Even if the President were to introduce a jobs bill, he could never get it funded. What the market heard during the debt ceiling debate and Mitch McConnell’s comments afterwards is the government is going to keep cutting way past the 18-24 month window. Way, way, way past.

“Holy crap!” think investors who are looking at history and know they are at or near the end of the “cost-cutting to profitability” plan of most corporations. “I’m not going to lose my butt in the private sector. I’m going to buy the most secure stuff that exists; US Treasuries.”

Standard & Poor’s did the only thing they knew how to do; lowered the rating for the US Government. Not entirely the best strategy, but they could do little else. S&P also gave a narrative as to why they did something, anything. But neither side heard the rationale. I’m not a fan of S&P as they have been wrong more often than right, but this time, I think they got it right, even if their math was off.

The problem does not lie in the math; it lies in the human assumptions behind the math.

And that is exactly what is going on, regardless of what rating Standard & Poor’s gives the US Government.

Now, all we need to do is package that in a nine-second sound byte.

*Sigh*

Send to Kindle

President Obama was a bad man on the twitter yesterday

Barack Obama tweets GOP twitter accounts

Shortly after his speech yesterday morning, President Obama started tweeting out the twitter accounts of the Republican members of the Senate and House of Representatives on his twitter stream. All in all, he sent out about a hundred tweets throughout the day.

And some people got so enraged they unfollowed him. Mashable reported that he lost about 36,000+ followers.

Seriously. A handful of ideological lawmakers are holding the faith and credit of the United States of America hostage and you are complaining about an extra hundred tweets in your twitter stream? And the “bad twitter behavior” pisses you off more than what is going on in the House of Representatives right now?

You self-absorbed bag of bones.

Look around you. Being in the United States of America is what makes something like twitter even possible. Your being incensed that the president would dare send multiple tweets to sully the purity of your twitter stream are the threads that will undo what has been built by men and women who have endured far more than the annoyance of a few extra tweets.

Seriously, have a little perspective.

I’m beginning to think that social media is bit like giving a loaded gun to a monkey.

Send to Kindle

There is no right or left, only power. The real debt ceiling crisis

us constitution article one

Before I begin, I would like to disclaim that I am not a Constitutional lawyer nor do I pretend to be. But I am an avid reader, one who has read a lot of literature surrounding the pre-Civil War through Reconstruction period. The “mood” of the country, including its values about government, is richly portrayed in these works. I can also read the Constitution, especially the plain language parts that have not been seriously mangled by case law.

Since the end of the mid-term elections last year, the media and Tea Party have been debating this issue of the debt ceiling, mostly as a taunting device against the Tea Party debt and deficit ideology. It made for a good story line of hypocrisy. Most Americans had never heard of such a thing before this, but it sounded bad. Real bad. And for the Tea Party, it also sounded like something that could be used for political leverage.

But since few Americans have ever read the Constitution, fewer still have any idea what the issue is really about. The issue has nothing to do with debt or deficits; it has everything to do with the separation of powers. Congress needs to avoid forcing the Supreme Court to “fix” a glaring hole that House Speakers have been successful at covering over since 1787.

John Boehner knows that. So does president Obama. And by sending a letter to the Speaker in January asking for a clean debt ceiling vote, Timothy Geithner demonstrated that he also supected how the markets would react if it were ever seriously brought to their attention.

And the Tea Party has done just that. Oops. Really, really big oops.

The Constitutional issue:
Article I, Section 8 gives Congress the “Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts” and “To borrow Money on the credit of the United States.” In short, it gives Congress and Congress alone the power to tax, pay debts and borrow. Despite what the Republicans would like all of us to believe, the president has no taxation, spending or borrowing power. Zip, nada, nothing.

Article 1, Section 9 says specifically, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” That means that not even one dollar can be spent that is not appropriated by Congress. The president may have a discretionary budget for the various executive branches, but all of them exist and get paid for through the laws Congress passes.

The US Treasury is responsible for managing the money and cutting the checks, but it can only do so under the authority of the Congress. Blaming the president for spending is like beating up the newspaper boy for bringing me a paper with bad news in it. It is dumb and misdirected. But, since he is right there, he’s smaller than me, and there is only one of him, not 535, it is easier to focus my rage. The bottom line is the president has no legal authority to spend money the Treasury does not have.

Or does he?

The Constitution makes no mention of what to do if the Federal Government has run up bills because of laws enacted by Congress for which there is no money to pay. The Constitution says that only Congress can borrow money, but it does not obligate them to make sure money is there.

But then along came the Fourteenth Amendment that cemented the obligation of the United States to pay its bills for laws enacted by Congress. “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” Still, it does not spell out specifically what to do if the United States Treasury runs out of money.

That, specifically, is the glaring hole raising the debt ceiling covers over and has for a very long time. Neither the Congress nor the President really wants the Supreme Court to decide how to fix this Constitutional issue. For each branch, it would be ceding power to the third branch; something that is even more loathsome to Republican legislatures (actually, all of them regardless of their party) than taxes.

More than likely, the Supreme Court would rule to compel Congress to act by either raising taxes or borrowing money to cover the shortage. And the debt ceiling approval from Congress would be lost forever as leverage. The House does not want to risk that.

But the Supreme Court could also rule that the Treasury Department can continue cutting checks without the approval of Congress, adopting the Gephardt Rule that had long been in place as law. Basically, the Gephardt Rule says by default, Congress is authorizing an increase in the debt ceiling when it enacts a new law. (More complicated than that, but you get the general notion. Google has more info.) That would put the president in the undesirable position of being responsible for increasing the debt and deficit of the United States of America. No more blame game. It would also destabilize the “borrow” powers, much like “declare war” and “wage war” is right now. Congress does not want to risk that.

The effect of pledges
I always found it somewhat perplexing that George W. Bush did not advocate to raise taxes after 9/11 to fund the War in Afghanistan when he clearly had the political capital to do so. Instead, Congress opted to borrow the money, mostly by selling US Treasuries to China. As it turns out, since most Representatives and Senators signed Grover Norquist‘s Taxpayer Protection Pledge, raising taxes was not politically possible. But borrowing money was. The pledge allowed for drunken spending by incurring unsustainable debt, but not increased taxes.

That was the first major step in plunging the United States into the debt it now finds itself. Add another unfunded war, Iraq and Medicare Part D on borrowed funds coupled with revenue reductions that Bush tax cuts created , the largely unregulated banking and mortgage industries and in short order, you clearly have a growing debt issue that is not easy to hide.

Follow the money
The first Secretary of the Treasury, Alexander Hamilton understood the United States of America was only as powerful as its ability to pay its debts. As a new country, the States could bluster all they wanted about life, liberty, pursuit of happiness, blah, blah, blah, but if it could not pay its debts, none of that mattered. The policy has held up well throughout history. We are after all, a market-driven race, sprinkled here and there with altruism. Sparingly.

But times have changed. The stock markets have gotten more global. There is no patriotism in corporations, only profit. The goal is to make money, whether you bet on or against the US Government. From what we have learned with the collapse in 2008, a lot of people can make a lot of money betting against the United States.

What has held and made Congress blink first in years past when the debt ceiling card was played with the threat of the Constitutional hole being exposed and the ability of the president to be able to clearly articulate the issue to the American people. Newt Gingrich tried it and quickly learned how skilled Bill Clinton was in talking plain language with ordinary folk. George Bush was never really challenged on raising the debt ceiling as he operated mostly with a GOP Congress, bound by the Norquist pledge.

But Barack Obama was something new. The GOP leadership — while apprehensive about going to the mat on the the debt ceiling issue — gambled that Obama would not be able to articulate the issue clearly enough to get the American people on his side. And they are kinda right. But what the “mature” GOP leadership did not understand fully is how cancerous and ideological the Tea Party would be.

I’m not sure if the legislators the Tea Party got elected are oblivious on the Constitution, are singularly focused on debt, deficit and taxes to the exclusion of their other responsibilities or are just stooges for the greater monied bosses that got them elected. I don’t believe in conspiracy theory, but I do believe in the power of mobs and the infectious contagion of simple ideology in favor of nuanced, reasoned thought. We are, after all, the country of fast food, the sound byte, CNN Headline News, Twitter and Snooki.

But the markets have become spooked, whether by sheer stupidity brought on by ignorance of the Tea Party-backed legislators or a long-formulated master plan I don’t know. And since we have ceded power of our credit over to the world-wide credit rating agencies (and kinda pissed them off with things like Dodd Frank) the great power of the United States of America is no longer really in charge of its own destiny.

What I do know is to follow the money and to ask who is likely to profit exponentially from the credit downgrading of the United States of America. I’m sure that is where we will eventually find our answer to what is really motivating the Tea Party, whether they are complicit or not.

Send to Kindle

Politics shut down Minnesota, but beer brought it back

Politics may have shut down the State of Minnesota, but the threat of having no beer brought it back pretty quickly. The only thing more dangerous than a drunk Minnesotan camping out in a tent in the wood is a sober Minnesotan who has no place to go.

Oh, settle down folks, I’m not ripping on Minnesotans. I is a proud native so it’s more self-depracating than anything. At least that is the one thing that is still not taxable.

DFL Gov. Mark Dayton and GOP legislative leaders announced yesterday evening they have reached a budget deal to end a two-week government shutdown. Both sides didn’t get what they wanted, each side will claim the other has caved, the voters have spoken, blah, blah, blah. I read through.. ok, well I skimmed through the majority of the … ok, I skimmed the first line of each comment on the blog post and most talked about the political crap that surrounded the fight.

It was really all about the beer.

But the GOP will use this “success” with other states and shut them down as well to get what they want passed. The voting public will become really fed up with the tactic eventually and the pitchforks will come out. In the meantime, it will be entertaining to watch supposed fully-formed adults run our government like they are negotiating playtime with the brightly-colored alphabet blocks in kindergarten.

The rest of us know government shutdowns don’t work because it is not really shutting the government down. It is a bunch of chickenhawks playing pretend freedom fighter on a fake battlefield. Here is what a real government shutdown would look like.

  • Close all the state highways and freeways
  • Open the doors to the prisons and penitentiaries and let the prisoners go. No guards need show show up for work.
  • Close all the gas pumps and convenience stores as there is no agency with taxation authority to collect taxes on alcohol, fuel or cigarettes.
  • Lay off the highway patrol.
  • Cease salary and benefits to ALL state employees, including the governor, legislators and judges.
  • Close the state courts. Counties and cites are ok, but no state courts.
  • Cease enforcing all state laws.
  • Cease collecting all state taxes. Any taxes owed during the shutdown are automatically forgiven.
  • Close ALL state departments, including the BMV, Attorney General’s Office, etc.
  • Close all the schools.

You get the idea.

If anyone is going to irresponsibly shut down a state, they should be prepared to have ALL state services deemed non-essential, not just the artsy-fartsy ones. By reserving things like law enforcement, roads and penal systems as “essential,” we are admitting we need government by default. By not shutting everything down, we are just faking it. By deeming some services non-essential, we are creating a dual class of citizens; those who matter and those who don’t. (GOP, take notice that the beer-drinking, hard-working, unwashed masses kinda matter here.)

The next governor — Democrat or Republican — who gets threatened by a shutdown should call the bluff. Shut down the roads, open the prisons and suspend lawmakers salaries. We’ll see how far this shutdown strategy takes us.

If you’re going to rattle your saber, you damn well better know how to use it. Or be prepared to die trying.

.

Send to Kindle

Something to think about over this Independence Day weekend

This week, the Chinese unveiled the largest sea bridge in the world. It only took them four years to build this at a cost of $2.7 billion dollars. They used Chinese engineers and Chinese labor. No American intellectual capital was sought out as none was needed.

Earlier this week, the New York Times ran a story about how the Chinese were supplying the finished rails to replace aging infrastructure on the Oakland Bay Bridge. It was cheaper to build in China and ship over the Pacific Ocean than to make in the United States. My guess is there was too much pain-in-the-butt-ism on who was going to pay for it, some Congressman railing over rejecting stimulus money for infrastructure projects, stuff like that to make it worthwhile to “make in the USA” before the bridge collapsed on itself.

And this week, Congress spent most of the time on vacation or railing against the president on how he insulted them by “lecturing” to them like the dick he is. And all I could think of when Rand Paul, Mitch McConnell or John Boehner was talking is why the Chinese showed up for work, rolled up their sleeve and built bridges while these guys whined.

Something to think about on our Independence Day weekend. If the Chinese keep up this pace, I wonder how long we will be independent from them.

.

Send to Kindle