Being a citizen in a
democracy imposes a variety of obligations upon its members. While a democratic
system can be structured in several different ways, all democracies must conform
to certain principles or they will be unsustainable as democratic entities.
America’s democracy is not unique in this regard, it also must abide by its own
chosen principles as well as those foundational principles upon which all
democracies are built.
Democracies are dependent
upon its citizens being the underlying power of the government and society.
This power is exercised through the social contract that each person accepts
and acknowledges as due to every other citizen under the Democratic
covenant. Under this social agreement,
the people must have legal equality, political freedom and an adherence to the ‘rule
of law’. Each democracy will incorporate other aspects of their principles and
aspirations that are key to their values; but without eroding the foundational
democratic pillars upon which they stand. So there are a number of American
freedoms that we have enumerated to ensure our collective ability to maintain
our democracy: freedom of speech, freedom of religion, freedom of the press,
and freedom of assembly to name a few.
Surprisingly there are a
few other facets of a democracy that are rarely noted and emphasized as
essential to it preservation. Democracy requires its citizens to be
well-informed. It demands that they elect representatives who dedicate their
efforts toward the society’s interests consistent with the social contract.
And, a functional democracy requires that its citizens accept their
responsibilities for their government; that is, they accept the laws of physics
operate, they see the connection of the nation’s balance-sheet of the costs of
the benefits, and they understand there are consequences to decisions. In other
words, not what we see America doing today.
Are we as a nation
sufficiently responsible to fulfill our obligations?
Question A: For
a democracy to provide the functions and services necessary to the
society/nation or that are approved and promised by its government; which of
the following are required?
(1). A
budget that does not exceed expenditures
(2). A
tax system to generate the revenues to fund government expenditures
(3). A
federal branch that prepares and authorizes the budget based on national needs,
priorities, and affordability
(4). Voters
who accept that all funds come from them and the voters must pay for government
(5). An
Executive that runs the government as a CEO would run a corporation
Question B: The
2016 Federal Budget was in what funding range (Trillion)?
(1). $2.5T
- $3.0T
(2). $3.0T
- $3.5T
(3). $3.5T
- $4.0T
(4). $4.0T
- $4.5T
(5). More
than $4.5T
Question C: What
percentage of the 2016 federal budget comes from individual income taxes?
(1). Less
than 10%
(2). 10%-20%
(3). 20%-30%
(4). 30%-40%
(5). 40%-50%
(6). More
than 50%
Question D: What
percentage of the federal budget comes from corporate income taxes?
(1). Less
than 10%
(2). 10%-20%
(3). 20%-30%
(4). 30%-40%
(5). 40%-50%
(6). More
than 50%
Question E: What
percentage of the federal budget comes from payroll taxes?
(1). Less
than 10%
(2). 10%-20%
(3). 20%-30%
(4). 30%-40%
(5). 40%-50%
(6). More
than 50%
Question F: What
portion of the federal budget is mandatory/entitlements (Soc.Sec., Medicare/Medicaid,
Interest on Debt), and what portion is for Defense?
Designate Entitlement’s answer as “E-#”, and Defense as “D-#”.
Designate Entitlement’s answer as “E-#”, and Defense as “D-#”.
(1). 20%
to 30%
(2). 30%
to 40%
(3). 40%
to 50%
(4). 50%
to 60%
(5). 60%
to 70%
Question G: What
is the consequence of reducing the discretionary portion of the budget to cover
an increase of $54B to Defense and $100B to Transportation?
(1). Nothing
(2). 20%
of all discretionary government work is eliminated
(3). 40%
of half of all discretionary government work is eliminated
(4). The
funds are lost to some areas of the economy and gained in another.
(5). National
Debt increases
(6). Short-term
is like (4), long-term will depend heavily upon the effects that result from
the changes that are made. This could be a net positive or a net negative
outcome to the nation.
Question H: If
you reduce US tax rates and impose an import tariff do citizens pay less or
more taxes to the government?
(1). Less
(2). More
(3). Some
pay more, some pay less
(4). There
is no difference, if the rates do nothing but balance Revenues to a neutral
level
(5). You
need to follow the money to know this.
Question I: How
much additional taxes would each tax payer owe each year, if the National Debt
had to be paid off over 10 years? For
citizens who pay federal income taxes.
(1). $5,000
per year
(2). $10,000
per year
(3). $20,000
per year
(4). $30,000
per year
(5). $40,000
per year
(6). $50,000
per year
Question J: What
are probable consequence of reversing Roe v Wade in terms of the Federal
budget?
(1). Nothing,
there is no connection
(2). Federal
budget will be reduced
(3). Increase
in crime rates
(4). Increase
in Income Protection / Welfare costs
(5). More
state Supreme Courts and federal Supreme Court lawsuits
(6). Increased
population growth
Question K: Which
of the following will result from reducing the tax rates on individuals and
corporations?
Select all that will occur.
Select all that will occur.
(1). US
economy grows
(2). Wages
will rise
(3). US
National Debt will decline
(4). Employment
increases
(5). The
middle-class will expand
(6). Federal
spending is reduced
(7). US
National Debt will grow
(8). Income
inequality will decrease
(9). All
the above
(10). None
of the above
Question L: Outside
of the Mandatory and Defense spending areas, does the Federal Government has an
obligation to deliver other functions and services to the public?
Select all items that would require funding.
Select all items that would require funding.
(1). No.
There is no obligation to fund any other part of the federal government.
(2). Food
and Agriculture
(3). Transportation
(4). Housing
and Community
(5). Education
(6). Energy
(7). Environment
(8). International
Affairs
(9). Science
(10). Administration
of Justice
(11). Administration
of Executive Branch
(12). Congress
(13). Judicial
Branch
(14). Health
and Human Services
(15). NASA
(16). Commerce
(17). Department
of Treasury
(18). Any
other department or agency that you benefit from
(19). All
the above (excluding 1)
ANSWERS:
Answer - A: 2, 3, and 4
Rationale - A: Item 2 is a consequence of the real world. You can’t do anything without money, not even run a nation. There are a limited number of ways to get those revenues, and taxes are the most democratic and safest. The public’s concern about taxes is their fairness and proper use.
Item 3 is another reality requirement. A government must have individuals and resources to deliver its functions and services. To manage these activities entails the management of the costs which means that there has to be a budget unless the public is willing to allow the government to spend whatever it chooses, which is not the case in America.
Item 4 is a reality check that citizens (and even voters) understand the connection between having a government and having to pay for it.
Item 1 isn’t a requirement. It may be a desirable objective but there is more to operating a government than its balance-sheet.
Item 5 is a poor analogy in that while they are the Executive, they are elected as a ‘servant of the people’ and only the head of one branch of government. Add to that that the government isn’t a business and assuming that it can be run like one assumes a set of principles that would not be consistent with a democracy.
Item 3 is another reality requirement. A government must have individuals and resources to deliver its functions and services. To manage these activities entails the management of the costs which means that there has to be a budget unless the public is willing to allow the government to spend whatever it chooses, which is not the case in America.
Item 4 is a reality check that citizens (and even voters) understand the connection between having a government and having to pay for it.
Item 1 isn’t a requirement. It may be a desirable objective but there is more to operating a government than its balance-sheet.
Item 5 is a poor analogy in that while they are the Executive, they are elected as a ‘servant of the people’ and only the head of one branch of government. Add to that that the government isn’t a business and assuming that it can be run like one assumes a set of principles that would not be consistent with a democracy.
Answer - B: 3
Rationale - B: The 2016 budget is at $3.99T in estimated outlays. Not surprisingly, the budget has grown every year for 50 years with 3 exceptions (2010, 2012, 2013). The budget expenditures has averaged 20.3% of GDP and 2016 is 20.9%.
Answer - C: 5
Rationale - C: Individuals paid 49% of the 2016 federal tax revenues. This was higher than the historic average of about ~45%. Whether this is due to corporations getting some extra advantages relative to prior years, or using exemptions from the tax code for corporations, or from improvements in the economy for those who pay under the Individual’s tax code, or some other confluence of reasons is unknown; but the Individual taxpayers are carrying the biggest load as usual.
Answer - D: 1
Rationale - D: Corporations constituted just 9% of 2016 tax revenues. The historic average is 14%, so the corporations are using their tax code as well as or better than they have usually done. Given that relative to GDP the federal budget is near to its normal percentage this would seem to be a good sign for the corporations.
Answer - E: 3
Rationale - E: The Federal Government gets 33% of its Revenues from payroll taxes. Understand that these are paid for by the companies that employ workers and the workers (or by the self-employed for themselves) and represents taxes that are for Social Security, Medicare, and other worker related programs. The average is ~30%. In general, this indicates that workers and those that employ them are hoisting more of the costs of Government. These taxes are for government programs that are mandatory and almost universally expected by the public. Whether they want to pay for them is a different question, but then we have to deal with a requirement on a democracy. (See item 4 in Question A)
Answer - F: E-5, D-1
Rationale - F: Our Entitlements: Social Security, Medicare/Medicaid, Interest on Debt, and a couple of other activities* reaches 60% of the 2016 budget. The entitlements have been growing year over year with only 2 years (1999, 2000) since 1967 that did not add to the debt.
Defense is at 21.3% which though described as a discretionary requirement, it doesn’t allow the government to change its funding level without understanding and anticipating the consequences to many other aspects of the nation: economy, jobs, security, trade, …
This means that 81% of the budget is not amenable to simple solutions. Yes, it will require a complex approach that is based on understand the world as it is and not as you want it to be. The problem-space that we exist in will impose the ‘laws of physics’, the ‘principles of economics’, and the application of ‘cause and effect’ without consideration of your wishes and desires or your ideologies. Given the complexity of the systems at play in our nation and the world, what is required is solving the problem based on knowledge and understanding. Not in our politicians’ skill sets.
* While not treated as mandatory the costs of some activities are required to have a functioning government. There are budget items for activities like: police, courts, prisons, law enforcement, and other governmental work that those termed ‘discretionary’ can’t be totally unfunded.
Defense is at 21.3% which though described as a discretionary requirement, it doesn’t allow the government to change its funding level without understanding and anticipating the consequences to many other aspects of the nation: economy, jobs, security, trade, …
This means that 81% of the budget is not amenable to simple solutions. Yes, it will require a complex approach that is based on understand the world as it is and not as you want it to be. The problem-space that we exist in will impose the ‘laws of physics’, the ‘principles of economics’, and the application of ‘cause and effect’ without consideration of your wishes and desires or your ideologies. Given the complexity of the systems at play in our nation and the world, what is required is solving the problem based on knowledge and understanding. Not in our politicians’ skill sets.
* While not treated as mandatory the costs of some activities are required to have a functioning government. There are budget items for activities like: police, courts, prisons, law enforcement, and other governmental work that those termed ‘discretionary’ can’t be totally unfunded.
Answer - G: 5
Rationale - G: Consequences from the changes will depend on what the expenditures were expected to accomplish. Thus, there could be positive or negative net impacts to the overall economy and feedback into higher or lower government costs and taxes. There could also be consequences to national goals and objectives, either being achieved or in failing to be met. In other words, redistributing funds from one government program to another doesn’t just affect the activity that lost or gained funds but ripples into other areas. Jobs change from one location to another location. The economy of one area rises and the other declines. Trade may increase or decrease. Risks will change.
Items 2 and 3 are nothing more than examples of how funding levels change depending upon on where they are made.
Item 5 is an outcome that is likely to happen if all you do is move funding around without being able to guarantee the overall net consequences. Change because you like it, isn’t the same as change that has defined benefits for its defined costs and a contingency plan if you are wrong.
Items 2 and 3 are nothing more than examples of how funding levels change depending upon on where they are made.
Item 5 is an outcome that is likely to happen if all you do is move funding around without being able to guarantee the overall net consequences. Change because you like it, isn’t the same as change that has defined benefits for its defined costs and a contingency plan if you are wrong.
Answer - H: 5
Rationale - H: Remember, It’s complicated. Tax cuts don’t change the federal budget, they change what you pay the government. Tariffs are a different source of revenues for the government, but ultimately a tariff is a tax by another name. And regardless of what you call the taxes, citizens pay for all taxes. Not every citizen will be at the first-order impact from a tariff; that is, if you don’t buy goods imported under the tariff you don’t incur them at a first-order level. However, it doesn’t stop there.
If a company imports products/goods that are tariffed, and then incorporates those products/goods into their products/goods that you buy from that company then you pay for the tariff costs (a second-order impact) that the company incurred and possibly even more if the company adds an additional profit to the costs of the tariff to them.
There can be additional order impacts if the chain of involved entities between imported items and you grows, particularly if it includes other tariffed items along the way.
As the tariff shifts costs on those items it is applied to then there is less money for those products outside the tariffs direct impact. Consumers either pay more for items that are effected by the tariff and have less for other items, or they don’t buy those products at the same level as they did before the tariff. So, of the thousands of products that consumers buy, which ones do they still buy at higher prices, which ones do they buy less of, which ones do they no longer buy? Some of these decisions effected US companies and US jobs. Some jobs may have been gained and other may have been lost. Did the tariffs cause the economy to improve?
Did the tax cuts make this all balance out?
It complicated; and there’s no guarantee that the Government made the right decisions to cause the results to be what they wanted. It is almost absolutely certain that the Government will not include a ‘fallback’ plan if the consequences are more harmful than good, assuming they can even measure it to know.
If a company imports products/goods that are tariffed, and then incorporates those products/goods into their products/goods that you buy from that company then you pay for the tariff costs (a second-order impact) that the company incurred and possibly even more if the company adds an additional profit to the costs of the tariff to them.
There can be additional order impacts if the chain of involved entities between imported items and you grows, particularly if it includes other tariffed items along the way.
As the tariff shifts costs on those items it is applied to then there is less money for those products outside the tariffs direct impact. Consumers either pay more for items that are effected by the tariff and have less for other items, or they don’t buy those products at the same level as they did before the tariff. So, of the thousands of products that consumers buy, which ones do they still buy at higher prices, which ones do they buy less of, which ones do they no longer buy? Some of these decisions effected US companies and US jobs. Some jobs may have been gained and other may have been lost. Did the tariffs cause the economy to improve?
Did the tax cuts make this all balance out?
It complicated; and there’s no guarantee that the Government made the right decisions to cause the results to be what they wanted. It is almost absolutely certain that the Government will not include a ‘fallback’ plan if the consequences are more harmful than good, assuming they can even measure it to know.
Answer - I: 2
Rationale - I: Taxpayers are sitting on approximately $13,000 in debt owed each year for 10 years. To pay it off, you can cut spending I suppose; but with debt at 7% of the annual budget it would be significant. Remember from Question F has 81% of mandatory funding, so you’re asking to pay-off $2.T a year which is 50% of the budget. There’s clearly a problem with even the objective let alone the reality of doing this.
Ok let’s make it only $5,000 a year. It will take 40 years and all other government work and programs would have to be eliminated. That would include not paying for Congress and the Presidency/Administration. While that may sound like something that they deserve, it has consequences that citizens in a democracy may find unacceptable.
Remember, it’s complicated.
Ok let’s make it only $5,000 a year. It will take 40 years and all other government work and programs would have to be eliminated. That would include not paying for Congress and the Presidency/Administration. While that may sound like something that they deserve, it has consequences that citizens in a democracy may find unacceptable.
Remember, it’s complicated.
Answer - J: 3 and 4 are the salient answers, 5 and 6 are also likely but not as important.
Rationale - J: This is one example of a “Law of Unintended Consequences” question.
Crime rates will begin to increase after 16 years and put pressure on law enforcement costs, correctional/prison costs, court costs, crime prevention costs, and … . Remember, the world isn’t simple and it doesn’t react to what we do only in terms of what we wanted the outcome to be. You may (or may not) get the outcome you wanted, but you may get many other results as well.
After Roe v Wade the crime rate continued to rise for 16 to 18 years, and then it began to fall and has reached historic lows. Just when criminal activities for those who were not born would have begun. Is this a proven cause-effect relationship? No, but it’s not an unproven one. It just illustrates that there may be some relationship, some ‘unintended’ consequence from one decision.
What are we to learn from this? The world is complex, and our actions have consequences that are filtered through the complexity of our reality. The dominos fall wherever there is another domino that falls on it.
Crime rates will begin to increase after 16 years and put pressure on law enforcement costs, correctional/prison costs, court costs, crime prevention costs, and … . Remember, the world isn’t simple and it doesn’t react to what we do only in terms of what we wanted the outcome to be. You may (or may not) get the outcome you wanted, but you may get many other results as well.
After Roe v Wade the crime rate continued to rise for 16 to 18 years, and then it began to fall and has reached historic lows. Just when criminal activities for those who were not born would have begun. Is this a proven cause-effect relationship? No, but it’s not an unproven one. It just illustrates that there may be some relationship, some ‘unintended’ consequence from one decision.
What are we to learn from this? The world is complex, and our actions have consequences that are filtered through the complexity of our reality. The dominos fall wherever there is another domino that falls on it.
Answer - K: 10
Rationale - K: Any of these results might occur, but none are required to occur because of a tax-rate cut.
While economists disagree on the outcome, none of their positions are just based on an understanding of the economy in terms of a single variable (tax rates). This makes determining what happens when you choose tax-rate cuts as a solution to a problem an unreliable answer, especially if you don’t really understand the problem or the solution.
Each of the items may occur if tax-rates are cut, but each may not. Which results will happen as expected and which will have the opposite effect (I presume as unexpected) depend upon how the tax-rate cuts play out through the government budget and expenditures, the National Debt, which parts of the economy suffer from budget cuts and which parts benefit, how trade is impacted, and in a myriad of other areas where one domino falls on another.
Remember, it’s more complex than it seems at first glance. So, in your experience would you expect our political leaders to be good at this?
While economists disagree on the outcome, none of their positions are just based on an understanding of the economy in terms of a single variable (tax rates). This makes determining what happens when you choose tax-rate cuts as a solution to a problem an unreliable answer, especially if you don’t really understand the problem or the solution.
Each of the items may occur if tax-rates are cut, but each may not. Which results will happen as expected and which will have the opposite effect (I presume as unexpected) depend upon how the tax-rate cuts play out through the government budget and expenditures, the National Debt, which parts of the economy suffer from budget cuts and which parts benefit, how trade is impacted, and in a myriad of other areas where one domino falls on another.
Remember, it’s more complex than it seems at first glance. So, in your experience would you expect our political leaders to be good at this?
Answer - L: 19
Rationale - L: All the above is the qualified ‘best’ answer. This is because every item, including 18, has some relevance to the judgement of our elected leaders that the public would be well-served by the government providing some function, service or playing a role in these areas. For some items, you should appreciate that you can’t have a government without paying for it, and that includes the people, places and things that you have to have to just have the three entities that constitute our Government.
For many of the items, maybe all of them, the public can only be served by having the government perform the function. Even the most zealous ‘small’ government ideologue will admit that a ‘nation’ requires the government to perform some tasks that are not practical or possible for the private sector or reasonable for a collection (confederation) of states.
The trick for a democracy is to find and maintain an effective balance for who, what, and how a society fulfills all aspects of its economic, public, private, federal, state, local, societal, and generational operations.
The designation of ‘discretionary’ spending is in this context a misnomer. It’s not simply a decision about whether you want to spend or not, but more the management of how to balance the spending to the best results. As is often stated, “We need to make the hard choices.” sounds like it’s being made by someone who knows what needs to be done. However, this pithy statement is in reality a statement that you have to make choices; and in a democracy, there will be some who agree and some who do not agree with any choice. Recognizing that you have to make decisions doesn’t mean that those who are making them understand the choices, the consequences, the problems, or the alternatives. It just means that you are going to make a choice. Are you a satisfied citizen with the choices that Congress (and Congresses of the past) have made? What about Presidents and their Administrations?
Isn’t one of the functions of government to provide the competent knowledge and understand of the issues that our elected officials should have to make their decision about an issue? When you think of who is most informed, do you think it is the elected and appointed officials, or might it be those in the government that are part of the bureaucracy? It may be a combination of both, but that leads to a requirement that is just another part of the complexity.
For many of the items, maybe all of them, the public can only be served by having the government perform the function. Even the most zealous ‘small’ government ideologue will admit that a ‘nation’ requires the government to perform some tasks that are not practical or possible for the private sector or reasonable for a collection (confederation) of states.
The trick for a democracy is to find and maintain an effective balance for who, what, and how a society fulfills all aspects of its economic, public, private, federal, state, local, societal, and generational operations.
The designation of ‘discretionary’ spending is in this context a misnomer. It’s not simply a decision about whether you want to spend or not, but more the management of how to balance the spending to the best results. As is often stated, “We need to make the hard choices.” sounds like it’s being made by someone who knows what needs to be done. However, this pithy statement is in reality a statement that you have to make choices; and in a democracy, there will be some who agree and some who do not agree with any choice. Recognizing that you have to make decisions doesn’t mean that those who are making them understand the choices, the consequences, the problems, or the alternatives. It just means that you are going to make a choice. Are you a satisfied citizen with the choices that Congress (and Congresses of the past) have made? What about Presidents and their Administrations?
Isn’t one of the functions of government to provide the competent knowledge and understand of the issues that our elected officials should have to make their decision about an issue? When you think of who is most informed, do you think it is the elected and appointed officials, or might it be those in the government that are part of the bureaucracy? It may be a combination of both, but that leads to a requirement that is just another part of the complexity.
No comments:
Post a Comment