The US needs an election rout

Divided government is no longer a good operating environment in Washington - at least when it comes to Congress.

We need an election rout and one of our parties to dominate. It's the only way to get the country moving in a healthy direction.

The current situation in which nothing seen as a victory for the other party can pass leads us stuck in a debt straight jacket. It's no good.

But the question remains which party will dominate. And that assumes the status quo doesn't prevail. But I'm starting to expect a rout might be in order. There is too much unhappiness with our elected representatives. We are collectively still trying to determine where exactly to aim our ire.

If Newt Gingrich is the candidate, I'd expect the Republicans to be sent packing. And my earlier prediction for a GOP disintegration still seems possible.

If Mitt Romney is the candidate, I think we'd see a close election and neither party dominating.

But Ron Paul could muddy the GOP picture - leading most likely to a Democratic dominance.

Why do some people run for office?

I still can not understand why somebody with a history of affairs and allegations of harassment would run for president. It must be sheer ego, but stupidity as well. I hope the price of his fame is worth it.

If the race comes down to Newt Gingrich, Ron Paul and Mitt Romney, how would that turn out? It's completely unpredictable. But I'll give it a shot.

My prediction:

Newt implodes. Surely it is coming.

Romney barely scrapes by with the Republican nomination.

Ron Paul runs as an independent.

Obama gets re-elected.

That's just how I see it right now.

Brilliant in Greece

Greek Prime Minister Papandreou has been brilliant. This is the serious game being played out in Greece:

The government "bows" to European demands and forces austerity on its people.

The government forces a haircut on its Greek debt owed to banks, easing the country's debt burden.

The government then withdraws from the euro, with a newly austere government that the people were forced to accept and a greatly reduced debt burden. The withdrawing from the euro? The plan all along. Everything else was just the best way to get there.

And now a newly introduced, devalued drachma will finalize the chess game.

Brilliant. Truly.

And now the government can hope it clings to power long enough to enjoy the spoils.

Romney vs. Cain

The choice for the Republican base is shaping up this way:

Do you want a tinkerer whom you don't really trust but who will watch out for corporate interests?

Or do you want a bold, unproven likeable optimist who presents grand plans without really fully vetting them?

Rick Perry

Rick Perry unveiled his flat-tax proposal, and it further buttresses my point of view about him: He's a panderer.

This flat-tax proposal does not seem a serious effort to fix our problems. Let's keep the crummy old tax code, make everybody spend the time figuring out that payment, then give them a simpler choice that only the rich really benefit from? Or people can just use the 20% flat tax if they don't care to sweat the details.

As I see it, nobody pays more taxes, but the wealthy pay less. Small businesses would not be helped. Those making money off the stock market would be helped. That seems like a good way to fix the deficit.

Perry will probably argue that massive cuts will solve this problem, when it gets pointed out to him. I'm waiting to see how he does at that.

Herman Cain's 9-9-9 plan

Can Herman Cain rebut his critics who point out his tax plan might not raise the revenue first expected? It's completely unclear to me, but this needs to get fleshed out and analyzed more. I do appreciate that Herman Cain is still crafting this plan, and he is announcing more and more exceptions to it. But this gets us closer to the current mess of a system.

I like the elimination of the payroll tax. I don't mind the national sales tax. It's just possible that 9-9-9 really should be something else, such as 10-10-10 or 15-0-15.

I still like Herman Cain. And I've long considered him likely as a VP candidate. I still do.

President takes a pass til next election

With President Obama's latest budget-cutting suggestion he seems to have taken the easy and resigned way out: He's putting forth ideas he already has in the past, taking on hard-core Republican antitax positions, but not really putting forth the answer to our problems. He is not fixing entitlements longterm. He is making campaign moves.

This, in my opinion, is the president resigning himself to not solving serious problems in the remainder of his term. He's given up. But he's hoping to point out the insanity going on in the Republican Party and win another election.

And he's giving Congress a chance to tackle the harder issues.

But he won't take full blame for whatever they come up with.

Obama's jobs speech

President Obama gave the American people and Congress a politically calculated call to action last night that was many things: just non-controversial enough to put real pressure on Republicans to go along, just concrete enough to forestall major criticism, and workable on the margin to improve the economy in a minor way.

This was a successful speech for the president. In some respects it was the same old rehashed proposals, but they went a bit further in areas such as hiring the long-term unemployed and offering more payroll tax cuts than we've seen before.

And Republicans are feeling the pressure to go along. So I do expect the payroll taxes to pass in some similar form.

Let's talk about what was more controversial: paying for the plan. The president promised to offset the expense with savings that the congressional supercommittee on the debt could identify. This is a half measure that really does not quite pay for itself yet, but it's enough for the American people to accept, and in this sense, the president will get a pass for this approach. Obama promised a more concrete proposal later in September. I heard a lot of questioning about why he didn't provide the specifics last night, but it seems like a shrewd move to me.

By parsing the specifics out Obama does a few things. He calls for immediate action on the non-controversial payroll tax, which has a chance for passing. He also puts immediate pressure on Congress while buying time for more specifics. And he guarantees his proposals can not just be rejected out of hand - the country and Congress must tune in for weeks into where Obama wants to lead this country. And we were all just about to start tuning out.

These are campaign moves. But if it takes a campaign to get real proposals from our politicians, than I guess campaigns are a good thing.

Why Obama is unpopular

Besides the obvious reason that the economy is lousy and the country is going down the tubes, this independent thinks the reason President Obama's poll numbers are falling lately comes basically down to this: he has increasingly and even somewhat suddenly become ineffective.

I know conservatives might disagree here. They might think that the country wants him to be ineffective; after all, when he's effective, he's passing legislation on health care and stimulus and regulations for business. They probably do prefer his inability to get things through Congress these days.

But I think many, many Americans are realizing that this is an intolerable situation. We need something to be done. And if Obama can't do it, then we'll need somebody else who can.

So President Obama now gives us nothing. No stimulus, no fixes, nothing that can pass Congress at all. Washington is broken. And Obama can't fix it.

And it's now quite obvious. There was a chance for a grand deal that helped solve some of our longterm problems, but conservatives shot it down. This works for them. It doesn't work for the president. Hence the plunging poll numbers.

Will Ron Paul run as an Independent?

I think we can all basically agree that Ron Paul is not really a Republican. It's quite obvious he is a mainstream Libertarian. But he's running as a Republican. The question is why?

My answer: He's milking the two-party system for visibility.

That's reasonable enough. But I'm starting to get curious about his end-game here.

Does he plan on running as an Independent once he loses the Republican nomination? Maybe. That could be a genius way to do it.

Does he plan on setting himself up for a future role in some other election year? Does he want to be vice president?

I think he's hedging his bets here, garnering visibility and support. He knows full damn well he's not winning the Republican nomination. But he'll be around when the dust settles, with a large base of support. We'll see if he can take advantage of it.

Age may become a question for him, though. How long does he have to wait? He's 75 now. Maybe this is his last gasp for fame and influence. And he'll take fame and influence if he can get it.

Our consumer-driven economy

I hear a lot of theories about what's wrong with our economy: Regulation. Taxes. Offshoring jobs. States cutting jobs to balance their own budgets as the federal government tries to stimulate, which offset into zero stimulus. Housing bubbles. Credit and financial crises that take a really long time to get over.

But it's none of that. Not really. The problem is that the consumer has been lied to by politicians for the past 30 years and they are now waking up to economic reality. And they DO NOT LIKE what they see.

This is what consumers are now facing, lit up in full view with stadium lights:

- Entitlements that they were planning on relying on are going to be cut back.
- Their nest eggs and net worth have been hurt and are going nowhere anytime soon. Stocks are down. Housing is down. And it looks like a long steady slow climb from here.
- Jobs are vanishing. Especially those good paying jobs with decent benefits.
- Their skills are increasingly out of date.
- Education is too expensive for what you get out of it.
- A career path that seems good today might blow up in your face tomorrow.

And this is the good result - if you haven't lost your job and still have savings in the bank.

So consumers have throttled back. This "retrenching" as some financial types call it may be permanent.

That's the problem. It's plain old reality kicking us all in the ass.

And now let's watch our politicians to see who has the wherewithal to deal with it. Because we're tired about being lied to. And I think they are all starting to realize it.

Populism will destroy the GOP

When the American people wake up and realize that they've been supporting a Republican party that really stacks all the economic cards against most working people, what's going to happen then?

We now have Republicans split into two factions. The common people are gravitating toward the Tea Party movement. The mainstream Republican Party is now being found out as the protector of all corporate moneyed interests everywhere. Everything else they care about is just window dressing to keep people in line. The problem is that this policy of protecting the wealthy and big business is not trickling down to the rest of us. And it's becoming painfully obvious. It's not just liberals who understand this anymore.

The conservative social views that have helped hold together the Republicans will weaken as brutal economic facts sink in.

I predict the Republican Party is not going to survive this schism. You heard it here first. This next election should pretty much destroy what's left of a cohesive party.

Democrats

I never talk about Democrats in this blog, and I think that's because they bore me. But I've seen questions about their lack of fire in the belly. Why don't they have a backbone? Why don't they stand up for what they believe?

There are several possible explanations here that come to mind:

- They think the American center is not on their side. And they think they are the only game in town for the American left.

- They are being patient while the GOP plays out its cards. They are waiting for the inevitable backlash against Republicans. The Democrats will be seen as the more responsible alternative.

- They don't have a good long-term solution to the country's problems.

So I don't blame them for staying silent. What are they going to say that helps their case?

Final debate post

Huntsman: Much more ehhh. I think he'll have a likeability issue.

Bachmann: Keeps things interesting. She has star power. Not that I'll vote for her. She has a warm side as she makes her points quite clearly and forcefully.

Cain: Glad he's in the race.

Romney: Can you stop speaking now so that I don't have to listen to you?

I'm watching this on a re-run. I thought I saw that Romney came out OK in this debate from early commentary. Huh?

Newt: Becoming less likeable as the evening goes on. Each time he speaks I like him less. Now he's getting angry. His face is turning red. And he likes to lecture. I like him best as a thrower of Republican bombs into the idea mix. He can't succeed as a candidate.

Huntsman: Please stop. I barely know you and I already can't stand you.

Pawlenty: I think he's doing OK here. I'm not entirely sure he looks presidential. But that's possibly over-rated. Important and necessary, but over-rated.

Ron Paul: I have a hard time thinking he'll be embraced by the heart and soul of the Republican Party.

GOP debate progress

Found Rick Santorum. Figured out who he reminds me of: Joel Osteen. Just not quite as sweet. He's not turning me off or wowing me. But I'll put him on my list of needing to know more. But I feel he's earnest and believes what he says.

Pawlenty: Mixing it up with a variety of folks. He's trying to establish himself in this campaign right now.

Romney: Still annoying me. He is a really bad campaigner. But he has good moments and bad. Sometimes he believes what he says and it comes out better.

Bachmann: Has moments of likeability, especially while she's actually speaking. Seems a little odd while she's standing there waiting to speak. Wax-like. Frozen.

Ron Paul: Getting his points across.

More debate thoughts

Forgot Ron Paul: I like having a few candidates that offer real choices and different options than the rest. Ron Paul adds to the debate. He broadens the options under consideration in the Republican field.

Mitt Romney: Back to his lousy campaigning now. He's trying to justify his record in Massachusetts with smoke and mirrors again. He sounds defensive and peeved.

Taxes: The candidates are back to group think. The litmus test is clearly on display. Let's watch them all bow down before America and swear their Republican credentials now.

Republican debate - first impressions

I'm watching the Republican debate in Iowa now. The candidates are all seeming fairly likeable and I'm feeling more Republican as it gets under way.

Early thoughts on the candidates:

Congresswoman Bachmann: Likeable immediately until she mentioned her debt ceiling position. Suddenly unlikeable.

Mitt Romney: Started fine, which surprised me as I thought he has been a very bad campaigner based on reading news articles and hearing his sound bites.

Herman Cain: I like him. I like what he says. I like how he says it.

Gov. Huntsman: Ehhh. Need more information.

Gov. Pawlenty: Need more information. I currently feel very neutral toward him.

Newt Gingrich: Let's all admit that he is too wonkish and not presidential material. Although I have always found him interesting.

Rick Santorum: Did he speak? I must have missed it.

S&P downgrades U.S. credit rating

So the Standard&Poors credit rating agency actually downgraded their assessment of the United States' credit worthiness to AA+, as opposed to the superior AAA credit rating we previously shared with Germany, Canada, France and the U.K.

There were some interesting things in their assumptions and predictions about U.S. debt:

1. As opposed to those other countries whose debt is expected to stabilize, the S&P said the most likely outcome is that the U.S. will be in a deteriorating debt situation after 2015. Our debt, now at 74% of GDP is predicted to rise to 79% in 2015 and then to 85% by 2021.

2. They assume 3% GDP growth, and the extension of the Bush tax cuts for all after 2012. They also assume we will actually cut $2.1 trillion through this year's debt negotiations, as agreed on. Of that, $1.2 trillion is still to be negotiated by a congressional committee this fall.

They view these likely outcomes will leave us with a negative outlook for managing our medium and longterm debt. In other words, doing these things still leaves us in a bad and worsening spot.

What was also interesting were their "upside surprise" and "downside surprise" scenarios. In other words, how we might turn out better or worse, and why:

Their upside surprise scenario would still leave us with the AA+ rating, but they would consider it a longterm stable rating and would come about through the following actions:

- The Bush tax cuts would expire for high earners. This would essentially leave us with a stable debt situation - very slightly deteriorating in 2015 and 2021.

Their downside surprise scenario would leave us subject to a worsening credit rating from the agency and would involve the following actions:

- The further $1.2 trillion in cuts to be hammered out by a congressional committee this fall do not occur. This would lead to higher interest rates and continued loose monetary policy.

- They continue to assume the Bush tax cuts would remain in place as in their most likely prediction.

- This would leave us with a much worse debt situation: 74% of GDP now, 90% of GDP in 2015 and 101% of GDP in 2021.

It was very interesting to see their debt projections and how various policy decisions might affect that.

But it was most interesting to see what they viewed as the most likely outcome of all. In a sense they are examining our political environment and making a hard call about the likely result. Their prediction: We will extend the Bush tax cuts, cut $1.2 trillion more this fall and be in a negative longterm debt outlook.

But they also point the path to longterm stability for anybody paying attention: Just cut the Bush tax cuts for high earners. That's it. That might do the trick.

Debt limit raised

I've been quiet during the final hours of the debt debate - not knowing the eventual shape of the deal that would be forged. I wasn't against the Boehner plan - but didn't like the balanced budget amendment thrown in at the end. I also didn't like the need to almost immediately revisit the budget limit again once passage was over. But other than that, the proposal did not seem that different than Harry Reid's proposal in the Senate. It seems like a lot of split hairs to fight over so vigorously. I guess everybody was jockeying to call the end result a "victory."

I also don't mind the final deal. It doesn't cut a lot. It demands a congressional committee to come up with the real cuts. And it allows an up or down vote on those. That's fine. If they need that kind of structure to get controversial things done, than so be it. I guess hard decisions are nearly impossible to make in Washington.

Here is my score of the participants:

The Republicans: It's hard to lump them together, as I feel there is a major split here amongst those who favored compromise and those who didn't. So I won't score them as a group.

The Democrats: They came out fine, even though they caved in a major way in the end. But that's OK with the people, so I think they'll be fine.

The Republicans who favored compromise: Thank you. We need some compromise in government.

The Tea Partiers: It's hard to like them. They are infuriating. But they also are dragging the country to cutting spending, which is needed in the long term. So I give them a grudging show of support for moving the focus of the debate rightward. But I feel they are going about it all wrong in many ways. Why focus on current spending? Why focus on next year's spending or even this decade's spending? We need long-term entitlement and Medicare reform. So why back away from that deal and force the country to something less worthwhile. I think the tea partiers in their stubbornness missed the grand bargain out of spite.

President Obama: Believe it or not, I think he came out fine. I didn't need a detailed budget out of him. I needed the spirit of compromise. And I got that. There was no question in my mind that he would cave to whatever deal Congress came up with in the end. And I placed most of the onus on Congress to solve this problem. That's their job. It's the House's job to lead the way. Obama did what he had to do.

So in the end there really were no clear winners or losers. Perhaps that's the way Washington muddles through. It's awfully distracting though, during the mess of a process we have. And now everybody is going to hunker down and start saving for retirement. I don't see how that helps our immediate economic prospects.

But I look forward to seeing what that Congressional committee comes up with by Thanksgiving.

Waiting for a tax/spending plan from the president

Isn't it the legislature's job to come up with the detailed budget and spending plan? Why must they wait for an exact suggestion on how to do it? The president has signaled the overall approach he would be OK with, without all of the fine details sorted out. It's time to sort out the details if Congress wants much of a say in it.

If those in Congress would rather balk and let somebody else take the heat for decisions that they should be making if they were to actually do their jobs than they are a bunch of worthless blowhards.

Enjoyed a jab at the GOP this morning

Why is it so much fun to bash Republicans? I am practically one of them. I don't know. Is it because in the current form they are a bunch of con artists?

Take a look at David Brooks' blog: "The Mother of All No-Brainers" posted at the New York Times.

I enjoyed it.

Welcome to US Indy blog

This is the first week of this blog. It is a window into the thoughts of an independent: Somebody who understands Republicans and Democrats, even agrees with many of their views, but in the end can't stand their public posturing. I offer only my gut feeling reaction to the news of the day.

Thank you for stopping by!

Taxes the poor pay

There is a disconnect in public discourse that the media has done a really bad job of explaining. One of the big debates in politics is whether people pay enough taxes, and whether particular groups, such as the poor or the rich, pay enough taxes.

The GOP line is that nearly HALF the country pays no income taxes. That's true. A family of four making $47,000 pays no income taxes after standard deductions.

Democrats say you have to include all other taxes as well when discussing the taxes the poor pay - payroll taxes, sales taxes and Medicare taxes.

The Democrats are right of course that these matter. And that changes the overall picture incredibly. The poor pay a lot of taxes (unless they are working under the table).

That's just the fair way of looking at it.

On lock boxes

For years there has been debate about whether there are virtual "lock boxes" that our Social Security and Medicare taxes apparently are in. You hear that funds for Social Security will run out sometime in the 2030s and for Medicare in a few years from now.

This independent's view is that both concepts are nonsense. We have one big general fund that takes money in and pays it out. Everything else is accounting maneuvers. And now that we are paying out more than we are taking in for both of these programs, we are in trouble.

We are in trouble now, not in 2039.

Our fantasy that the money is set aside now means we can SAY we are spending our built-up savings in these areas, but in actuality we have to cut elsewhere to afford them.

Debt showdown - how fast to cut

Let's be honest about Republican demands to slash spending immediately rather than accept mostly longterm cuts.

The GOP is trying to sink the economy now so the election goes better in 2012.

There. I said it.

Let's focus instead on restructuring entitlements.

There. I said it again.

Paul Ryan's plan for Medicare

Here is an honest to God independent's thoughts about Paul Ryan's plan to change Medicare:

He's on the right track.

I know the public by and large hates it. Here is my answer to that problem:

It needs sweetening. Perhaps this modification could work:

Add in some cold hard cash annually beginning at 60 years of age into a health savings account. Give people $2,000 and let it start building over time, which it could if they are a bit fortunate and somewhat careful not to overuse medical care.

Then top that off with something akin to Paul Ryan's proposal.

Bachmann "misspeaks"

I suspect Republican presidential candidate Michele Bachmann might be a "lightweight" nominee similar to Palin, although this doesn't mean she's a political lightweight. She has no chance at the election, but she still could be plenty potent politically.

Bachmann acknowledges misspeaking re: her hometown history, comparing herself to John Wayne. Unfortunately the John Wayne from her hometown in Iowa was John Wayne Gacy Jr., a serial killer. Thanks for the laugh, Michele!

As an independent I'm not judging this as anything but a funny moment. It's no big deal.

She should stop that tendency ASAP, though, or we'll all start to conclude there's something wrong with her - kind of like Joe Biden.

Protests in Greece

Greece is voting this morning on austerity. The Greek people are in trouble - they let their nation grow on false hopes and false credit. And now the people are angry. They don't want austerity. And in many respects, although I disrespect how the country got to this point, I agree with the street. Where is Greece headed? Toward default. Toward leaving the euro. This is the only solution for them. They need a weaker currency. Why support a guaranteed recession/depression and further contraction when they should be focused on growing their industries through lower wages and export growth? A reduced standard of living is guaranteed either way.

But we all know where this is headed. Why should the Greek people protect European banks, who made bad loans to them? They should save themselves. Banks will have to deal with their own bad decisions. Bond holders will have to have their hairs cut. There have to be consequences for making bad loans.

I am starting to think, though, that the Greek government is wrangling cuts from the people, knowing it will default soon anyways, so that it will already have these cuts in place when it leaves the euro. And maybe in the end that is an acceptable strategy for it to have.

I am also thankful that this display is playing out right now as the U.S. struggles with its own debt showdown.