LJWorld.com

The Senate finally passed legislation last Friday that would reverse the 21% cut in Medicare (seniors) and TRICARE (Veterans and serving military families) payments that took effect on June 1. Leadership form both parties agree the cuts needs to be reversed. House leaders, however, are saying that they will not fix the problem unless the Senate passes House-approved jobs measures.

So Mrs. Pelosi is holding medical care for seniors and soldiers hostage. Why must these citizens suffer because the Republicans are demanding we pay for any additional extension of unemployment (we are already paying for a year)? The Senate found funding to pay for the Medicare fix. Why doesn’t Mrs. Pelosi find the funding for the jobs measures?

Why are we doing this? Why have we not heard about it from the media (FOX, CNN, all the rest)? Are we playing politics with our soldiers and seniors?

We have been enjoying the dialogue in this space over wealth, taxes, entitlements and the like. Lots of strong heartfelt opinions- almost diametrically opposed.

We have the free market advocates who wrap around themselves the riches of our country as a prime exhibit of the success of that approach. In opposition we have those abhorring the very skewed distribution of wealth that has resulted. . The former abhors government intervention in the marketplace to “fix” it and the latter demands it as the only way to restore some sense of equity within the system.

Is there no middle ground? There is truth in the notion that the individual efforts of those trying to improve themselves has produced more broadly shared wealth per capita then in most countries throughout history. There is also truth that in recent years in particular that wealth has not found its way to the average citizen and has been aggregated at the top.

How do you fix that assuming you want to “fix” it? Will it fix itself? No! Greed being a perennial motive for human accomplishment those that have it rarely will share with those who do not. Is the government the way to “fix” it? Perhaps? However, the government can and has had duplicitous motives. NAFTA certainly allowed us as a nation to better compete. It also has caused the loss of many, many well paying domestic jobs. Good? Bad? Might depend on whose ox has been gored. A third way we tried for a while was employee representation such as unions. Bargaining power did certainly advance the cause of the workers.

From the standpoint of some the current administration is trying to use “government” to redistribute the economic pie. The discretionary portion of the budget has been increased by 25%. New entitlements for the lower socio-economic have been created. We are running a massive deficit and printing money to pay for it. We are looking at massive deficits for years to come. Taxes have not been increased at the federal level although committees have been established to make suggestions on how to tame the deficit. The outlook is bleak. Now what?

In a few weeks our state legislature will meet to set a budget for next year. There is a projected deficit of about $300 million dollars from last year’s expenditures (about 5% of the general fund). The deficit would be about $600 million from the governors originally proposed 2011 budget. There are many proposals to address the situation. They include reductions in projected expenditures as well as significant tax increases. The piper is here.

We have already reduced our state general fund budget about 10%. Further reductions will likely impact schools, colleges and programs for the poor. Cutting is easy. A proposal to reduce the budget to the expected revenues of $5.2 Billion for the general fund is on the table (total reduction over two years of about 13%).

Sin taxes (liquor, smoking, etc.) are on the agenda and a strong majority supports increasing them. There is just one problem - they will not cover the shortfall.

Restoring sales tax exemptions and other taxes for businesses cut in recent legislative sessions is also on the table. The legislature has been very generous in reducing taxes on this group citing the action will produce jobs. One could argue that a fair amount of the current shortfall results from these reductions. Strong elements of our legislature do not support this option.

Extending sales taxes to utilities and various charitable groups is proposed. There is a lot of money in taxes on utilities as they would increase our utility bills by as much as 6% in addition to the every increasing (> 20%) overall rate increases already programmed. Taxing religious activity could help defray cuts if we can sustain the legality of our actions – this action alone will not cover the shortfall.

A general sales tax increase of up to 1% is on the table. For the math phobic that would be about a 20% increase that would hit hardest on those least able to afford it. This option can go a long way to covering the shortfall depending on how much the increase.

An increase in income taxes for the very wealthy has been proposed. This option did not fair well in the polls. Do we really have that many people with taxable incomes over $150K? This option by itself will not cover the problem although some might argue that when combined with a smaller sales tax increase it might be more equitable.

Now for those of us in Lawrence we face a property tax increase for Library improvements. We also face the costs of new recreation facility to be paid from already existing but no longer required sales tax revenue. It appears that we may also get permission to increase our local option school budget – a property tax increase locally. It is not yet clear whether the county of the city have designs on a property tax increase but noises from down under suggest one may be coming.

All of the above suggest a hefty tax increase for many of us – and I have not even presented the federal situation where we have a continuing deficit of over a trillion dollars a year that will undoubtedly lead to tax increase on many of us – not to mention increases in the costs for medical insurance and fees resulting from the new health care entitlement.

We are all going to have to face this and decide what we want done and how we intend to pay for it. One way or another we must now pay the piper. Make your choices known.

The LJW is all for the city revitalizing the old Farmland property on the east side of town. The argument appears to be future growth. The details are at best vague- as they seem to be for all our economic development activities. Just who will benefit from these efforts and who will pay?

Now, I would suspect that the latter is obvious. Current and future taxpayers will pay – for a long time. The money has to come from somewhere and last I looked there is no printing press in the city building basement. Yes, there will be some federal money, but given our federal over-commitment can we be sure it will be there?

Who benefits? I am having trouble with answering that question. First, I am not sure that “growth” for growths sake is such a good idea. Lacking detail as to the type of growth to be sought, I can only wonder. If we are to bring in more jobs such as the predominant type in our eastern business park and in our recent history, I suspect most of the new hires will not even be able to afford to live here. If we extend tax rebates to the owners of whatever we obtain it would seem to lead to a net loss. Why would we want to do this?

If we are going to be highly selective as to the growth to be obtained - where the new jobs will be well paid and perhaps actually contribute to our tax base - then maybe this could benefit our community. However, it would seem that to obtain such growth we would have to offer something unique. Competition for high paying jobs such as in biotechnology is keen and many other communities have a university and in some cases an existing biotechnology business base. What do we have to offer to trump their offers?

What I am afraid of is that this is another misrepresentation where our lawgivers are more interested in lining the pockets of some of our local business interests (developers come to mind). After we acquire various facilities and pay developers to upgrade and or repair them we will be unable to attract the kind of business that will make for a positive return Our law givers will then lose interest and like past city investments we will be left holding a less then attractive “bag”. Worse, with the acquisition of the farmland property we run the risk of open-ended costs to ameliorate environmental deficiencies. There is no guarantee our exposure is limited.

What is driving this sudden spurt in economic development? Do we have a plan? Has anyone seen that plan? You would think that responsible civic leaders would know where they are going and how they plan to get there. Is anyone clear as to the total costs to do whatever we are going to do? What are the steps? What are we expecting from KU? Is the state a party? Where will the investment come from if not the taxpayers? It would seem to me a philosophy of “if you build it they will come” is a very poor approach to nurturing the future of our city.

Does anybody know where we are going? Could our lawgivers, some of whom have ties to the development community, be working their own futures at our expense? Maybe, I am just out of touch! What do you think?

This morning, a letter to the editor suggested that there might be other options to improving the downtown library such as creating satellite facilities. Some people thought that might just be a good idea. Someone identified such a solution as a potential for the “haves” to further exploit the “have nots”. The definition seems to be geographic – west of the campus is the domain of the “haves” with the rest of the city inhabited by “have nots”.

I started to think about that and wondered if it is just that simple. I concluded it is not. We all, at least most of us, know that there is a significant amount of income transfers in our taxes at all levels. Rent subsidy, child care, child support, medical care, ownership incentives, job training and so on are there to help the “have nots”. Is it enough? I honestly do not know but I do know we are trying.

So could there be another issue in Lawrence that drives this debate? Could part of our business community be using this issue to further their own interests? Certainly, they will not come out and say they want more for themselves. However, if you wrap their interests in the “have-have not” issue does that not benefit them? Just exactly who benefits from our tax money to “downtown” – the “have nots”? Maybe the obvious is correct, certain business interests do.

I just might point out that those very interests have actually contributed to the “have not” problem. Lawrence is below the Kansas average in pay to employees (and Kansas is no shining star). So we exploit the students (and everyone else) by paying them low wages and conceal our ploy by constantly raising the “have- have not” issue as a distraction.

If I am right, and I just may be, how could we all fall for this? Must we constantly use tax money to subsidize business interests in the name of the “have nots”? Why have we allowed this artificial east-west issue to be used to divide us?

Thomas Jefferson once opined that “an enlightened citizenry is indispensable for the proper functioning of a republic. Self-government is not possible unless the citizens are educated sufficiently to enable them to exercise oversight”.

I n our modern information age, is it any longer possible to be enlightened on all the major public policy topics of debate? The idea for this blog originated in a set of threads elsewhere that are questioning the boundaries between opinion and fact. Being able to recognize that difference is IMHO very important in being enlightened. At first I thought it would be obvious. But, is it?

Today our society IMHO relies heavily on data, statistics, polls, studies and the like to inform us on public policy options. Many of these sources are quite complicated. The media and our political leadership tend IMHO to reduce that complexity to short “talking points” as a means of informing their various constituents.

Does that work? Are we getting the full story or even an accurate story? Is opinion to include spin manipulating the underlying facts? Do we know what assumptions were used in generating the information – IMHO sometimes assumptions drive the outcome. How do we know that this information is factual and very importantly that the interpretation of that information is well informed, accurate and free of bias?

Has the complexity of public debate led to our acceptance of the facts and conclusions as portrayed by various information sources. Not only does an inability to determine what is “fact” potentially compromise our nation’s future, it IMHO is influencing our public debate as we throw around concepts using unvalidated and perhaps inaccurate information to advocate our position and demean our opponents?

Are we willing and able to educate ourselves on what is “fact”, how to determine it and how to interpret it? If we are significantly dependent on others (many of whom hold an advocacy position) to inform us then maybe we should no longer be an element of the political process and simply allow the “experts” to formulate and execute public policy?

In our local blog world are we reflecting this dilemma by using the terms opinion and fact interchangeably. If it is my opinion it is obviously fact but if it is your opinion it is just that and worse. Do we have a common perception of what the terms mean and how to distinguish them in an article? Are we trying to separate them or are we deliberately mixing them to make points? Are we using those terms in ways that discredit those with whom we disagree?

IMHO this is very important. If we can be easily bamboozled by the “experts” or those who manipulate their ideas than why even bother to hold elections since they will frame the debate so as to drive our decisions anyway?

What do you all think?

I have intended to write on this topic for some time but Mr. Pitt’s column today upped the priority.

We all know from our history that the notion of “guilt “runs throughout the fabric of our society with roots back to the initial colonists and before. As an aside, I do believe it may be declining with each new generation. That said it is still in my humble opinion widespread.

Think about it, why are we saddled with collective guilt about the environment, the economy, international relations, treatment of minorities and more?

Did you consciously do things to try to hurt the environment or have you, like many Americans been making efforts to reduce your “footprint” at ever increasing personal costs? Just what forest did you destroy? Do you really believe that we should all live as our grand parents did or should we use available resources to responsibly improve the human condition?

Have you actively supported actions by our government to hurt the weaker elements of the international community or have you contributed public and private resources to try to improve it? Do you believe we have economically subjucated the world as charged or have our collective efforts sought out and paid appropriately within the period for resources used? Do you believe we have repeatedly waged aggressive war or have we reluctantly responded to threats against ourselves and the weaker members of our community?

Have you been living way beyond your means, incurring debt you could not pay, or have you been using credit prudently in order to try to improve your family’s circumstances or meet unique obligations such as college? Did you have a clue that our financial elites were trafficking in high-risk securities with the blessing of our government elites? Just how did your personal debt, a dept you were servicing as required, drive the economic collapse in 2008?

Have you been actively working to suppress our minorities or have you been working slowly and incrementally to make our community more diverse? Do you buy in to Mr. Pitt’s assertion of our collective exploitations of gays? Are we somehow unique and evil in the way we treat others or does most of the rest of the word have a much less responsible record in dealing with human diversity?

I suspect most of you believe that you have been at least trying to improve things and believe you will continue to do so. You do not look upon yourself as an active participant in the exploitation of our planet or the people on it. So why are we barraged by media and political élites trying to portrait us as evil despoilers of almost everything? Could they be exploiting our historic propensity toward guilt and if so, why?

If one thinks back in history, political movements have used misrepresentation of ones neighbors to justify all sorts of undesirable goals to include mass murder and worse. Just think of Mr. Hitler. Could our political and social elites be using guilt for their own purposes? Are these groups selecting out elements of our society such as bankers, “tea baggers”, people who disagree with them, people of faith and others in order to accuse them of actions retrospectively determined by those élites to be evil. Are the standards being promulgated by the elites way too severe and ultimately self-serving? Are we really evil or is our collectively record superior to most countries, even if not as advanced as we might desire.

Is it not past time to apply a more appropriate standards to measure our past actions and acknowledge all of the good we have done while learning from those actions that in retrospect should have been avoided? Retrospectively blaming our whole society for things done mostly by our elites does not seem to be very productive in our efforts to improve that society in the future

Well, we have gotten ourselves in another fix. We do not have enough money to run our schools as some of us would like. Of course, we have seen our state contribution decline significantly as the state has addressed declines in tax revenue – heavily weighted by individuals experiencing reductions in their income. Our local contribution has been increased – although the decline in property values will probably reverse that. Consequently, we have a real problem.

I doubt the state will reverse the trend of declining school contributions. We will be lucky to break even this session. There is a glimmer of light as there is a bill before the legislature that may allow us to increase our local contributions. For a variety of reasons it may pass. That could mean a local property tax increase. Before the rocks start to fly maybe we can have it both ways.

We all know that the city has an uncommitted stream of sales tax revenue because we have retired the original debt. How about a deal. The city just lets that revenue stream die and reduces our sales taxes, thereby possibly making our community more business friendly. In return, we acquiesce to a short-term property tax increase to fund schools – to be revisited if the economic environment improves. I am not talking a tax to make it whole but a tax to avoid the worst of the impacts. If schools need to close to balance our student population and ensure equal treatment of our children then so be it.

Maybe there are other solutions but if we simply go for a massive tax increase to meet all the demands from portions of our community we will further reduce the attractiveness of our community by making our every increasing tax rate unattractive to businesses and new population. There is no future if we drive people away. Worse, many of our potential newcomers would likely be those who would increase our elementary school population to warrant the continued funding of all our neighborhood schools.

There have been many articles on the need for preserving certain neighborhood schools. Those articles have been uniformly silent on how we obtain the needed money. If you do not like my idea, how would you fix the mess?

The LJW ran an editorial yesterday and it has drawn out the continued debate. I read the posts and became increasingly confused.

Free Market solutions: Health care reform that allows for high deductible insurance, interstate sale of insurance and the like lacks any representation of where people get the money for the initial co-pay. Are the fees those renegotiated by insurance companies, or set by CMS or are they floating? How do we avoid interstate sale of insurance yielding a race to the bottom in terms of quality and coverage? Will the presumption of market forces on an inelastic product yield higher costs rather than cost control? One could go on.

Obama Care: Just what is it? Lots of rumors? There appears to be a big entitlement associated with it. There are also reforms such as portability, protection from pre-existing conditions and others. Others like tort reform are missing. Just what is the cost and who pays? Lots of noise but few supportable facts. Even the CBO could not really price it as the bill is structured to delay costs until the out years. Would it really raise costs for all those with existing insurance as it did in the Commonwealth? Would there still be commercial insurance/supplements? Who gets to pay for the massive unfunded subsidy- those already dependent on previously promised government programs? ? Can we really require people to have insurance? Are the savings projected real? One could go on!

National Health Care: Just what is meant by this term? Are we following a model where everybody works for the government? Are we following a Medicare model where the government pays but the program is administered in the market? A lot of numbers are thrown around. Where do they come from, which model are they following and what are the assumptions. Are things like the cost of transition, capital costs and the like included? There is one basic reality here; we do not really know what it will cost because all the numbers are the product of various advocates. I do not think we even really know the true costs of the current system as different advocates include different costs. One could go on!

How can anyone form an opinion about health care reform as it is being developed? I wonder if anyone has really interpreted the nearly 3000 pages. For example, are my insurance rates going to go up because I am overweight? Who defines that? Will we impose similar strictures on those on Medicaid or those receiving subsidies? What else is buried in there as a bone to the insurance companies to shut up?

Then there is the process. Two of the big bribes to Congresspersons have surfaced. What about the "gimmie" to the auto unions – insurance far in excess of what the average American has. How many more sweetheart deals are there? Transparency translates into traditional behind closed-door negotiations. I though we were against such or are we only against it if they are plotting torture?

Maybe the American People should be more involved in the process with shared details rather than grandiose promises, we all know about government promises like Medicare and Social Security. In distilling the numbers, it sounds like only about 15% of us lack health care and may not be able to afford it. Should we be in such haste to help these people that the rest of us have no input into what is going on? Maybe if we did this slowly and incrementally we could all participate and have results that are equitable and lasting.

Recently, I wrote a blog about my perception of inconsistencies related to our snow shoveling ordinance. The response seemed to tie social security to owing service to the state. A lot of discussion about social security ensued. A good topic. Next year Mr. Obama has vowed to try to tame that beast.

The exchange revealed a lot of misinformation or maybe just plain greed. In the interest of the former one would hope we do our homework before we end up in a massive generational fight.

The argument of the left at this point appears to focus on means testing social security. Not a bad idea if we don’t suddenly drop the bucket on those already on the program and who have paid a substantial sum for their expected benefits. Remember the very people pushing the notion of immediate major sacrifice are the very people who spent the trust fund on social programs and wars and make this an immediate problem rather than a 30 year out problem. The argument of the right has been to privatize the program (all or part). The left unified to block that approach during the Bush administration.

One interesting point. The very people who argue for health care reform conveniently forget that a major component of the Democratic Party bill is another massive entitlement- upwards of a trillion a year. How can we afford to make that commitment when we are talking about reneging on commitments already made?

We could pass a health care bill that reformed insurance, broadened availability, and eliminated abuses with out such a massive cost. We just need to strip the subsidies from the bill along with all the goodies for big pharm and big insurance.

What do you think? Should we all learn a bit more so we can make informed choices next year and not be driven by those who want to renege on promises made. Yes, whatever we do will be painful. Pain should be broadly and equitably shared