Fix It: Episode III – The episodic thing makes me feel like I am writing the next Harry Potter or something. OK, enough fantasizing. On to the real stuff.

Energy: The “fix” for our energy problems is actually one of the simpler ones. And, the reason it is simple is not because of any action of Congress or the President. It is not even because of our founding fathers. It comes from God.

This country is blessed with enormous natural resources. We have more coal than any other country on earth. We can make electricity from coal. We also have enough natural gas, by some estimates, to last us for a century. We make electricity from natural gas. We have a number of nuclear plants that generate electricity and we can build more. And, we have rivers to create hydroelectric power which can be harnessed to create more power should we need it. I have just described four sources that currently create more than 90% of all the electricity in this country. And, we can expand them all if we want or need to without importing anything from any other country.

But, you say, you haven’t mentioned anything about our… Read More

In the second “episode” of our saga on fixing our problems and bringing America a new period of growth and optimism, I will address an issue that none of you will be surprised to see me tackle – the debt and deficit. Since I was first elected to the California State Assembly in 2000, trying to get government to tax, spend and waste less has been a major priority for me. As such, you have heard a lot from me on this issue. So, I will not repeat much of what I have said incessantly for years so that I don’t become electronic Ambien for you.

Instead, let me put this problem/opportunity in the context of the larger issue we are talking about. Implementing a plan to gradually fix our deficits and reduce our debt is a necessary but not sufficient condition for growth. Fixing the deficit will not in and of itself free the economy for sustained prosperity. There are other things we have to do that I will write about in future episodes. Suffice it to say, fixing the deficit is not a sufficient condition. But, it is a necessary one. If we don’t do it, we will certainly bring on a crisis which will plunge us into a long and… Read More

There are a lot of things messed up in America today. On this, there is pretty much universal agreement. We have no energy policy, no manufacturing policy and an antiquated tax code that is complicated and inefficient. We are facing crushing deficits and debt that will soon lead to a European-style collapse. The economy continues to be weak and fewer people are working today than over 3 years ago when Barack Obama was sworn in as president. So many people have become discouraged that the number of people working or trying to find work is the lowest percentage of the eligible workforce since back in the Jimmy Carter recession days. The critical housing market is stuck, gas prices are high and going higher and the costs of our health care system keep rising and reform is needed. The public’s confidence in Congress and the President is low, perhaps even at an all-time low, and there is little trust out there for major institutions, be they public or private. We are mired in a seemingly endless conflict in Afghanistan even as we face new and changing threats all around the world.

Makes you want to fill your bathtub with beer and go drown in… Read More

Disaster in Washington: Last week was a disastrous one in Washington, DC. No, there was not a tsunami or a hurricane or another earthquake. But, the effects of last week will be felt much farther, longer and wider than would have been the case in any of those natural disasters. Everyone of every political stripe understands that our debt and deficits stand as the largest threat to the prosperity and hegemony of the United States in the years and decades ahead. But, in spite of this acknowledged reality, actions in Washington last week served to make this situation dramatically worse, not better. However, almost disturbing is how this happened. The same political dynamics that led to these deficits in the first place have been left unchanged and are currently causing the deficit to increase rather than shrink. Let me explain what happened, and more importantly, how and why it happened:

President’s Budget: The President’s campaign slogan of late is an “economy built to last”. Well, this is a “budget built to collapse”. It astoundingly increases spending, taxes and the deficit, both in the coming year and… Read More

A New Year: It has been over a month since you last heard from me. I have not disappeared nor have I lost interest. This gap in communication was caused by a combination of holidays, work volume, some writer’s block, and a nasty cold that had me flat for nearly a week. Some have speculated that the latter was caused by the Obama Administration trying to dim my effectiveness by slipping something into my Jack Daniels. I think that is a low probability explanation. I think it’s more likely that I succumbed to the Petri dish that is winter time in the Longworth Building in Washington.

CBO Truth Serum: OK, enough insignificant jabber. Last week, I had the opportunity in the Budget Committee to question the Director of the Congressional Budget Office (CBO), Doug Elemendorf, about several things. He confirmed for me that repealing the Bush tax cuts only on the “rich”, defined by the Obama Administration as people making $250,000 or more, only represents about 15% of revenue “lost” from all the tax cuts enacted since 2001. And, it would only raise enough money to cover about 10% of the deficit over the next… Read More

Merry Christmas, Happy Hanukkah and A Happy New Year! I usually end my final missive of the year with these wishes. But, since the rest of this e-mail is loaded with lumps of coal, I thought I would start out with the happier note! Now, on to details that could just as easily have been provided by Ebenezer Scrooge.

Post-Thanksgiving, there were basically two issues remaining for Congress this year. I will address each separately:

Funding the Government: A bill to fund the government for the balance of this fiscal year passed both Houses on a bipartisan vote and is expected to be signed by the President very soon. The total spending in this bill was determined by the “debt limit agreement” in August. So, all that had to be worked out were the specifics within that number ($1.043 trillion). So, that means no government shutdowns before September 30, 2012. Additionally, it is standard practice in election years to fund the government from October 1st through at least the end of November on a Continuing Resolution (CR) rather than try to get enormous spending bills done weeks before an election. So, I expect that next year… Read More

Europe’s Effect: Europe is a long ways away. It may seem like what happens there can’t be of that much consequence to us in America. But, that’s not true. Just as conflicts that ignited in Europe in the 20th century dragged us into two world wars, the effects of economic unrest on that continent will involve us, as well – whether we like it or not.

To coin a phrase, Europe is in economic deep doo-doo. They are suffering a huge crisis born of too much debt of which the causes and potential cures are far too complex for a meaningful analysis in this short format. Suffice it to say that Europeans have given themselves a lot of socialistic benefits without paying for them, instead choosing to borrow the money. The resulting union-dominated socialism has led to very little growth. Italy, for example, has had zero GDP growth in 10 years! Without GDP growth, you cannot grow wages, benefits, government, or social and environmental policy. But, they have tried to do all of that. Germany is the most prosperous country in Europe, but even their prosperity has not been pure. Note that 50% of all of Germany’s products are exported; most… Read More

Regular readers know that I am not surprised by the failure of the 12 members of the “Super Committee” to come up with an agreement for $1.2 trillion in deficit reduction over the next 10 years. But, I am surprised that Speaker Boehner and Senate Majority Leader Reid did not come up with something. Now, because there was no agreement, the so-called “sequester” or automatic cuts are scheduled to become law on January 1, 2012, although the cuts do not actually begin to occur until one year later.

So, you might ask, what happens next? Because of the 23 Senate Democrats who are up for reelection next year, the Senate majority is extremely risk averse. They literally seem as though they don’t want to vote on anything with any controversy for fear that either a yes vote or a no vote will cost them popular support at home. Dozens of bills that have passed the House, some by large bipartisan majorities, have not and apparently will not even be considered in the Senate. So, it looks like nothing much is going to happen in dealing with the deficit for some time to come, right?

Actually, not right. Congress has become even more… Read More