Romney Military vs. Education

What is more important to the long term survival and prosperity of the United States, our military or the education of our citizens in order to compete in the world of today and tomorrow? Both are necessities and we must put both in perspective of each other so we will properly allocate scarce resources in the most efficient manner possible.

Most would say the military takes priority because it is a mandate in the constitution that the federal government “provide for the common defense” while the governments role in education is justified under the “general welfare” section of the founding document and is not specifically mentioned in the Constitution. However, most would also say education must be a top priority.

An article in the New York Times on June 11, 2012 summarizes Mr. Romney’s position on the federal governments role in education as

“…taking his party back to its ideological roots by emphasizing a lesser role for Washington, replacing top-down mandates with a belief in market mechanisms. It is a change driven in part by Tea Party disdain of the federal government. In the Republican presidential nominating fight, candidates competed in calling to shut the Education Department.

Mr. Romney, who never went that far, also seems hemmed in politically by the fact that President Obama promotes many solutions that were once Republican talking points, including charter schools and teacher evaluations tied to test scores.”

We look at the need to have a strong military as a national “must” while looking at the need for high quality education as a local, or even a family, “must”. Intellectually we look at both as necessities for future success in this competitive world. The rest of the world is catching up with us and we do not have an unalienable right to be the most powerful and prosperous nation on the planet. We must work for it.

In an unbridled free market society, he who has the gold makes the rules. In our country free markets should not exist in a “wild west” manner where resources that would help the nation attain its goals are underutilized because of someones lesser social-economic status. This approach would put us at a competitive disadvantage to the rest of the world. If the 2012 version of Einstein is living in poverty and in a broken home, it is in this countries national interest to make sure she is provided with an education allowing the nation to take advantage of this resource. She is a live “national treasure”.

Therefore, we need federal government involvement in financing education. If the federal government partially provides the funds for education, it must be involved in overseeing how the funds are utilized including the monitoring of results. We have yet to find the proper way to do this; however, we should not stop trying. The consequences are too important.

Stimulate, Export, Plan & Cut Military

Stimulate, export, cut deficit and military and restore equality are all related..

We are in the fourth year of a Great Recession that could have been a depression. The end is still not in sight. The net worth of all Americans was affected negatively, as has their optimism and willingness to go on spending binges as they have over the last several decades. To make the recovery happen, part of the answer is to stimulate our economy by investing in our future including infrastructure, education and the internet.

 Our ability to presently stimulate is somewhat limited by the debt burden our country is currently carrying as depicted by the chart below. If we cannot show how we can afford to stimulate now and implement a debt reduction plan in the near future, we could be facing the same problems as Greece, Spain and Portugal.

Ccircumstances after World War II , when we were the last modern economy standing, no longer exist. We were ready to convert to a peacetime economy and ready to help the remainder of the world to rebuild.

Today there are many nations in the world competing for the same consumer. Further, the American consumer is not willing and able to consume as he did in the past. He cannot use the equity in his home as a piggy bank. Restraining the consumption binge is a good thing; however, it means that we must find another engine for our growth rather than the American consumer.

The new engine is exports. The rest of the world is rushing to catch up to our life style and wealth. They want to consume and someone is going to fill their desire. People throughout the world are looking to increase their consumption of goods and services. If we do not meet this demand there are other nations clawing to fill their needs. These consumers are in China, Iran, Brazil, Russia, Southeast Asia, India, Pakistan, Eastern Europe, South and Central America, Africa and the list goes on and on and on.

Exports will only work if there is indeed free trade with the rest of the world.

Romney is right. Today China is not practicing free trade. China is artificially keeping its’ currency low. As a result, it is more expensive to buy goods from the US then it should be. Chinese goods for Americans are artificially cheap. This results in Americans, and the rest of the world, buying more goods from China then they would if the Chinese currency was valued to the market. At the sme time, our goods and services would be cheaper for the Chinese consumer.

The US has been weak-kneed on this issue. If we are going to get back to prosperous times, we need to address the currency issue. This is not going to be easy. China is a major creditor of ours. We all know how much power and influence our lender has over us in our personal lives. China has that same influence over us as a nation.

Other free trade issues need addressing. For example, Japan places a very high tariff on cars that we export to Japan. This also has to change.

After World War II, the United States defended the free world at great financial cost to this country. We also assisted the free world in getting back on its economic feet. That was then; this is now. We are proud of what we did to help the world to recover from the devastation caused by World War II. We were equally proud of what we have sacrificed to help our allies get back on their economic feet. What we did defines who we are. We are a caring, loving and giving people. We would not want it any other way.

Many of the countries that we have helped, both economically and defensively, are now some of our biggest economic competitors. If we want to prosper, we can no longer subsidize their defense and accept unfair trade restrictions. It is unfair of them to expect us to continue doing so.

Super Committee & Sequestration

The Super Committee has failed resulting in automatic cuts of $600-billion in both defense and non-defense spending beginning in 2013. This sequestration provision demonstrates how thoughtless lawmakers really are. They agreed to $600-billion in military cuts without forecasting our military needs in the future.

Military spending is not discretionary. It is necessary in this world for our survival. Before answering what must be cut we must first identify what we need. The President is just as guilty of jumping the gun by saying he will veto any attempts by Congress to try and reduce the required military cuts. First, let’s determine what is needed.

I personally believe we can find more than $600-billion in practical cuts to our defense budget, however it must be reviewed.  For one thing, we need to stop being the military for other parts of the world including Germany, Japan, Korea and the rest of Europe.  They either need to pay part of our defense budget or get their own armies. By subsidizing their defense, we are subsidizing their economies. No wonder Germany and Japan are kicking our butts when it comes to exports.

It is time our politicans do things right. It is not time to stop legislating and start campaigning. It is time to get things done by doing it right! More: http://bit.ly/nJ9f4w

Role of Government: How Large & How Active?

“Do It Right, Or Don’t Do It At All.”

Anonymous

There is a divide in America between those who want a smaller government and those who want a more active, and thus larger, government. The issue is what is governments role. This will dictate the size of government.and spending

The Preamble of the Constitution says:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

There is little debate that the role of government includes assuring domestic peace and providing an army for defence against foreign tyranny. The quarrel between liberals and conservatives centers around how large should our military be and what to include in defining general welfare. The dispute is in the center, with the extremes being a small contingent of the American people.

The moderate liberal and conservative does not want government to take anymore of their income and distribute it to others in the form of welfare programs.  They also want to curtail borrowing. When liberals say we should help the needy, they are suggesting the help come from someone else. The middle class conservative is unwilling to have government take any additional wealth of theirs for the needy.

We need to go through the complete budgeting process outlined below.

1. We must define what is meant by “general welfare” as referred to in the Constitution.
2. We must decide whether the nation still has special obligations to our black citizens as a result of allowing slavery for almost 100 years and discrimination far beyond that.
3. We must decide whether government has a role in protecting small business from big oligopolies that destroy free markets and jobs.
4. We must review all departments, agencies and programs and cut back or eliminate any that are not warranted.

This will not be easy and there will be disagreement; however, it must be done. We do not have unlimited resources. Further, the answer to many of the issues will be subjective rather than objective. I cannot recall any department, agency or program created by government that was eliminated. There must be some; however, there are not many. Surely there is allot of fat to cut. Here is an outline to do that.

Simultaneous with the above process our current and next years budget needs to be reviewed and developed. Many opportunities to reduce expenses will be glaring and agreed on before clearly defining what we mean by general welfare. Thees cuts must be made immediately.

Over the last half century our budgeting process was to first determine what we wanted to do and then figure out where we get the money to do it. This is backwards and needs to Change and here is a good approach.

1. Calculate projected revenues for the fiscal year
2. Calculate projected expenditures for the fiscal year, including any pay-down of existing debt.
3. Do one of the following
• If expenditures exceed revenues, ascertain what expenditures to cut.
• If revenues exceed expenditures, decide what to do with revenues.

Washington focuses on new laws and it is weak on implementation.  No company would exist very long if its senior executives created a plan but had no means of controlling and reporting on the implementation of the plan on a continuing basis.

Roger Wagoner, former CEO of GM, must be tempted to call all member of Congress to Detroit and have them explain how they got into this mess. No Congressman would be allowed to fly a government jet to the meeting.

There will be some reading this who will say “hogwash”. We should just start cutting where we can without understanding what is trying to be accomplished. That would be an unfortunate approach; however, that is exactly what we are telling these 12 individuals to do.  The results will be a mess.     

Future of NATO

NATO has been acting just the way we have trained them. I agree with Gates, see post of November 29, it is time Europe start paying more for defense. However, within a span of 25-years there were two world wars in Europe and we were happy to demilitarize Europe and Japan. It was part of our strategy to prevent a 3rd war.

Today we cannot afford it and it is handing them an economic competitive advantage not needing to spend on defense.

The tone of Mr. Gates is what is troubling. His speech made it sound like the above strategy occurred against our will and we finally decided enough is enough. In fact, we were the ones that created the plan. Through the years we also allowed our allies to use unfair trade practices against us. We knowingly allowed unfair trade practices to help rebuild the rest of the world. Well, Europe has healed from Wield War !! and communism has been defeated. It is time for a level economic playing field in the world.

Therefore, what Mr. Gates said in his recent speech concerning Europe paying their share of for defense is correct, but let us acknowledge that we were the major architect of the western defense. However, it is time to change.