Who Else?

I watched a very interesting interview with Robert Rubin who was President Clinton's Treasury Secretary and is a very knowledgeable man on Wall Street. Normally I shy away from the guys from the Street but Rubin had some interesting things to say and he refused to be trapped into accepting the normal definitions of what our fiscal and financial problems are. He made a very revealing statement of what the budget deficit is and I will repeat it to you. He said, and I am paraphrasing, that the deficit is the difference between what we ask government to do and the revenues we generate to do it. So simple yet so profound.

This is why it is so necessary to have intelligent debate over what we want government to do. Do we like Social Security the way it is? Then we have to tax to support it. What about Medicare? Same thing. What about the wars? We have not established revenues to support them. Same with Medicare D. During the Clinton years there was an understanding that we would not begin any programs without establishing a revenue stream and it worked. It was Rubin's point that the sane and sound fiscal policy is what created the climate for the expansion of the national economy. At the end of that Presidency we were running a budget surplus and would have paid off the national debt in ten years. We were speaking of fully funding Social Security and Medicare. So much for that.

So, what do we want government to do? Health care? Personally I don't like the idea of leaving millions of people without access to health care. I also think that the burden of caring for those people as emergency cases costs more than providing preventive care. So, I am OK with a tax for that. You may not be. You may have an excellent plan at work or you may be able to afford a good plan. If so, that is great but I don't believe that scenario will continue and neither does big business or the insurance companies.

Social Security was established because elderly people were dying in poverty without any income at all. The program has been expanded to include some other groups of people, each time with some opposition. My view is that Social Security is an excellent program that does its job well. There are some tweaks that may be done but I am not convinced they must be done. We will see. So, I'm OK with supporting that.

Medicaid is a mess and, in my opinion, should be folded into the National Health Care Plan. Yep. OK with that, too.

Military? We need to define what we expect our military to do other than respond to threats. Yes, there are a lot of things we use military for besides responding to attacks. This consumes from 1/3 to 1/2 of our budget. We are seriously overbuilt in my opinion. Certainly, we will have to fight sometimes but we don't have to be stupid about it.

Transportation? Personally I don't think a 10 lane highway is much improvement over a 6 lane highway. Just remember the last time you were in Knoxville or Atlanta and tell me if you think the situation would have been improved with more lanes of craziness. Eventually we will have to bite the bullet and accept mass transportation and that will take money. Bridges are failing and buildings are falling because we have neglected maintenance. Someone has to pay for that. That is what taxes do.

Consider this, we are the only major industrialized nation in the free world without universal health care. We now rank 13^th world-wide in standard of living. Where we used to be the unquestioned leader in innovation now we see less developed countries gaining rapidly. Why? Because they have a plan and we don't. That plan will cost money to develop and implement. Is that the role of government? Well, who else will do it? Headhunters say there are all kinds of jobs out there but we don't have the skilled people to fill them. Is it the role of government to guide efforts to ensure the viability of our economy? Who else has the resources?

Lee Kwan Yew, the former Prime Minister of Singapore, when asked what his opinion was of the potential for the decline of the power of the United States said that the United States is a very rich country. It has the resources to do anything it wishes to do. All that is necessary is a plan. Lee Kwan Yew led the rise of Singapore from a small colonial Malaysian backwater to one of the most productive city-states in the world and is considered a global player whose opinion is respected anywhere.

I may disagree with some of his proposals but I agree totally with his assessment. We are still the richest country in the world and have the greatest resources in the world. We just have to decide how to use them.

Wouldn't it be great to talk about that next year instead of hurling threats and accusations?

That's my take on our fiscal opportunities and obligations. Do you disagree? Write me.