Friday, July 31, 2015

Designated Giving, Loss Leaders, and Planned Parenthood

Encouragement of designated giving can be an effective fundraising tool but, except in the case of major capital campaigns for specific projects, has little or no effect on programs of non-profits using the method to raise money. I am reminded of the confession of a police department that, although their fund raising campaign was focused on bullet proof vests for officers, they were going to buy the same number of bullet proof vests regardless of the fund raising result. It was just that bullet proof vests support an effective emotional appeal for money. 

As a young adult, I was a member of a Southern Baptist Church that taught tithing and essentially forbade designated giving, unless pre-approved by the Board of Deacons, because it was seen as a way for church members to vote with their money and personally impact church priorities, a clear responsibility of the Board of Deacons. It was also a nuisance for the church treasurer to keep up with the various designated funds and make sure they went to the right place.

About that same time, the local Community Chest was raising a million dollars or so each year to fund locally popular non-profits serving the community. Over the next couple of decades, the Community Chest gave way to United Way, and some of the agencies being funded under the new regime were extremely unpopular with some of the donors pressured to give to the annual drive. To assuage their concerns, donors were allowed to designate their gifts to one or more agencies and leave the others out. It made no difference of course in the distribution of the funds except in the very rare case that designations to a particular agency exceeded the budgeted amount for that agency. I doubt that ever happened. And money of course is fungible, making it impossible for a designator to track his or her hundred dollars and make sure it went to the Boy Scouts or whatever other agency he or she might have designated and not to some organization with goals perceived by him or her as suspicious.

Loss leaders of course are those products sold in groceries and other retail outlets at a "loss," less than their fully allocated cost of acquisition, selling, and distribution, because they are known to increase store traffic and total sales revenue and thus result in greater profits even if showing losses as individual items. It has been a long standing tradition, for example, for groceries to feature Coca Cola products one week as loss leaders and Pepsi Cola the next. (Both soft drink companies were rumored to require the stores to feature their products at least fifty percent of the time if they were to have the privilege of selling them at all, and that was judged by smaller soft drink companies as a grossly unfair trade practice.) The point is that revenue is revenue and always contributes to the bottom line profits whether the particular product generating the revenue, based on the accounting system in place, shows a profit or not.

What are the points of this rambling? There are two: 

  1. Whether the $500M in federal funding going to Planned Parenthood is designated for services other than abortions is absolutely immaterial because money is fungible and enables the organization to grow and increase impact on society while directing whatever other income it has to expansion of abortion services. So long as the books show spending on services other than abortion is equal to or greater than the federal funding, the organization can claim that none of the federal $500M went to abortion services. Accounting is a wonderful art.
  2. Whether the collection of revenue from transfer of fetal tissue, in the form of body parts, shows a profit based on the accounting system in place is absolutely immaterial. The claims of Planned Parenthood that they are only offsetting cost with the revenue collected would be like Publix Supermarkets claiming that it is not profitable for them to sell soft drinks as loss leaders. It obviously is profitable or they would not do it.

So, here is my recommendation for Planned Parenthood. Spin off whichever is the smaller of the two major parts of the organization, Abortion Services or Women's Health, and then let the Federal Government contract with the Women's Health part to provide Women's Health Services on a cost plus basis just as they pay through Medicare for elderly health services. If funds were to be transferred from the Women’s Health entity to the Abortion Services entity, that would be very difficult to hide with accounting manipulations. Then the Abortion Services part of the organization could look elsewhere than the US Congress for funding. I suspect there will be plenty of it, probably largely from organizations much more interested in preventing births than in Women's Health. PP Abortion Services might even become the larger of the two (if it isn't already).

And, to Congress, until Planned Parenthood engineers that divorce, there should be no federal funding of it.



Monday, June 29, 2015

Congratulations to President Obama

Regular readers know that I have been a frequent critic of our president's managerial and leadership skills and his apparent lack of interest in fiscal and economic issues, but, reflecting on last week, I have to say that heartfelt congratulations are in order.

The incredible confluence of four major events including two SCOTUS decisions in line with the feelings of a majority of the population and in support of the president, the gracious, loving, forgiving responses of Black Charlestonians followed by the coming together of Black and White in response to the tragic church murders, and the resulting unification of SC politicians over quickly resolving the confederate flag issue resulted in a week that will certainly be the high point of the president's two terms. And on Friday, responding to an opportunity presented with perfect timing, he stepped up to the podium in Charleston and claimed his victory with class as he warmly eulogized Senator Pinckney (with some politics and music thrown in.) 

Had the response to the same sex marriage question been negative or had the Affordable Care Act subsidies been terminated or had there been riots and destruction in Charleston, or had Governor Haley defended the Battle Flag of Northern Virginia, it would have been a much unhappier week. 

The simple truth is that all these events delivered results aligned with clear majorities of the American people. Less than a majority strongly favor same sex marriage, but a majority willingly accepts it. Far less than a majority have been digging into the details of the health care legislation and are happy it is in place, but very few wanted to see subsidies put in place by the government a couple of years ago suddenly yanked away by that same government. And less than a majority strongly favored removal of the flag, but more than a majority is quite willing and happy to see it go to a different display space. And I suspect only a tiny minority, mostly out of staters, as apparently was the case in Baltimore and Ferguson, had any interest in rioting and demonstrations in response to the murders.

My hope and prayer are that peace will increase and discontent will decrease now that these issues have been resolved. That will require respect be shown to those who still believe, based either on their religious faith or on human physiology, or on both, that marriage is between one man and one woman, that continuous effort be spent by Congress on improving the Affordable Care Act, and that South Carolina legislators follow through on promises to deal NOW with the flag issue.

If all that comes to pass, freedom, peace, and joy will increase, the Affordable Care Act of 2030 will bear as little resemblance to the legislation passed in 2009 as the Social Security and Medicare of today bear to the original laws passed in 1935 and 1965 respectively. And docents at the South Carolina State Museum will enjoy telling visitors of the different flags flown by the Confederacy and the meaning and significance of each.

So, can we now turn full attention to the crisis of mayhem, torture, expulsion, and murder emanating from the Middle East and infecting the world, to meaningful tax reform at the state and national levels, and to paying down our federal debt? (Greece may have some excuse for spending so much more than they have. This rich country has no excuse.)



Friday, June 19, 2015

Some Thoughts About George F. Babbitt

My memory is not what it used to be and never was that good, so, when a FB friend asked if I have read Babbitt by Sinclair Lewis, I didn’t have a quick answer. On his recommendation, I downloaded it to Kindle and plowed through.

My first impression was that this is a great read for anyone going through the examination of conscience process in preparation for confession. The common though sometimes unrecognized sins committed by George Babbitt as he progresses from self-centered, self-righteous, successful businessman with questionable ethics through a period of wavering reflection, drunkenness, adultery, and rejection by the establishment, and back to where he began provides a good checklist for comparison with our own behaviors. I quickly lost count of the number of sin-remorse-resolve-relapse cycles experienced by rationalization champion Babbitt.

At the South Carolina Book Festival a few weekends ago, one writer/speaker on a discussion panel mentioned the importance of having at least one likable character in any work of fiction. In Babbitt, I found neither the protagonist nor anybody else in that category and was tempted to lay it aside about a third of the way through. I did, however, find myself curious about how the writer was going to resolve the mess created, and it was only that curiosity that kept me going.

Unfortunately, there was no redemption for Mr. Babbitt, his only hope being that his son would chart a different path. On the last page of the book, Babbitt offers his son the honest confession that he has “never done a single thing I’ve wanted to do in my whole life! I don’t know’s (sic) I’ve accomplished anything except just get along.” Then he warns his son of the pressures and bullying he will face and tells him to do his own thing. And the book mercifully ends before Babbitt has a chance for his next fall.

“Bullying,” by the way, is a theme of the book. A quick search on the Kindle revealed 17 instances of use of various forms of the verb. It is interesting that it is such a hot topic now, almost a hundred years later.

The most dislike-able thing about Mr. Babbitt is his insistence on categorizing, labeling, and demonizing anybody different, not in his own group or category, that insistence exceeded only by author Lewis’s insistence on categorizing and labeling and demonizing the business establishment in general. The book seems to be an incentive to class warfare, designed to stir up hate and resentment.

We can be discouraged because we know that, in the real world, every Babbitt launching demonizing attacks on the poor or minorities or immigrants is balanced by somebody demonizing the more successful. And the class war is on. Our only encouragement comes from knowing that the categories are unfair and that there are both saints and sinners in all such groups. It is individuals and not groups or categories who bear responsibility for sins.

The book seems timeless because the categorizing, labeling, and demonizing continues today with a vengeance, greatly accelerated by the 24 hour news cycle and social media. The current popularity of categorizations such as “red state” or “blue state,” frequent misuse of the suffix phobic, organized resistance to silence speakers on college campuses, boycott of businesses that don’t toe some currently popular line, and widespread use of the labels “haters” and "deniers" are some of the most obvious examples. It is often easier to create enemies than to make friends.

LORD have mercy, and help us love our created enemies as well as the real ones.

By the way, I am now certain I had not read the book earlier, nor will I read it again. It is too disturbing, with not a likable character in sight.




Monday, June 1, 2015

World Change, GDP Growth, and Debt

This is a followup to the previous post on GDP growth rate in the USA and simply adds a chart, covering the same time frame, of debt as a percent of GDP. The inflection point on the debt chart is pointed out, and possible reasons for it are on the GDP chart. Can the climbing debt be due to our failure to respond appropriately to, or adjust to, changing conditions? Click on the charts for high resolution views.




Saturday, May 30, 2015

Historical Perspective and Context for US GDP




Click on the chart for a high resolution view.

GDP, the total value of goods and services produced within the country in a given time interval and the key measure of national economic health, is of course unknowable, but there are a couple of methods of estimating it. 

The Expenditure Method assumes that GDP must be equal to total spending by government (G) and consumers (C) plus private investment (I) including investment in residential housing, plus Exports (Ex) minus Imports (Im).  (It is worth noting that government spending on transfer payments to citizens does not count.)  The formula using this method is GDP = G+C+I+Ex-Im. All the data I am plotting are from the BEA NIPA Tables and are based on this method.

The other method of estimating GDP, the Income Method, is based on an assumption that GDP must be roughly equal to the total income of all the providers of goods and services and uses total salaries and wages, profits, rent and interest received by individuals, with some adjustments, to estimate GDP. None of the data in this post are based on that method.

Given the complexity of the method of estimation, it is not difficult to see why GDP estimates are noisey and late and often must be revised. Just yesterday I read that the earlier estimate of +0.2% real growth for the first quarter of this year has been revised to -0.7%. That is a big shift in the wrong direction, but both numbers are depressingly low. You can read the full report here. (Don't get unnecessarily distracted. Such short term estimates of GDP are not the point of this post.)

One way to get around the difficulties, errors, and noise in measurement of GDP is to focus on long term running averages. In the chart above, I did that, plotting ten year running averages of "real" GDP growth (inflation removed) all the way back to the end of The Great Depression. These averages of ten years are good solid numbers that nobody is going to be revising.

I can think of only one reader of my blog who would remember The Great Depression and few who would remember the WWII years, but there are many who remember the post war boom years when people were getting good jobs with good incomes right out of high school and enjoying good raises and regular promotions as they watched their mortgage payments shrink to insignificance. And we are all acutely aware of the rising flood of complaints about lack of opportunity and low pay since the turn of the century.

I'm not going to write paragraphs explaining what should be obvious from careful examination of the chart, but I do want to call attention to the facts in the two red blocks, that average real GDP growth for the depression years of 1930 to 1939 was 1.3% per year and that today the average for the past ten years is 1.6%. And we wonder why jobs and raises are scarce! Click on the chart for a high resolution view.

Later: To see this chart with a debt as a percent of GDP chart on the same time scale, go HERE.





Friday, May 15, 2015

KRM's (Key Result Measures) and an Improvement Plan for the US

We are heavily entangled with, both supporting and depending on, two very large entities that we hope and pray are too large to fail. Unfortunately, those two large entities are also entangled with, supporting and depending on, each other, and the inevitable conflicts of interest combined with short term thinking and selfish behaviors have weakened both. The two entities are the United States Federal Government and the United States Economy.

Anyone responsible for an important enterprise must understand how the enterprise works and how well it is doing. An important first step in managing and driving improvement is establishment of KRM's, Key Result Measures, for the enterprise. Such measures must be carefully selected and based on accurate data designed to identify important trends and statistically significant changes. Such tools greatly facilitate diagnosis of problems and planning, implementation, and documentation of improvement projects.

In the charts below, you will see the results of an effort to identify high level measures for these two major entities. For all these variables, I plotted data from 1960 through 2014, the last full year for which government supplied data are available. I used ten year running averages because such averages eliminate noise and make each point very accurate, containing a lot of data, and because I didn't want to be accused of trying to correlate ups and downs with presidential terms. We attribute far too much of the good and bad news about our government and our economy to whoever happens to be in office. The actions a current administration or congress might take are far more likely to take effect a few years down the road rather than immediately. Our economic ship and our government ship are big and bulky and slow to turn. 

The most important measures are the size and growth rate of our economy. After that, the issues are how much of that economy is consumed by the federal government, how the money to fund the government is pulled from the economy, and how that money is spent by the federal government. Some of these measures are controllable factors, independent variables, and some are lagging results or dependent variables.

Variables that can be controlled over time
  • Spending as a percent of GDP
  • Percent of spending available for transfer payments
  • Percent of revenue coming from income tax, payroll tax, and corporate tax

Variables that are lagging and dependent
  • Total federal debt as a percent of GDP
  • GDP growth rate

The charts below indicate that we have opportunities with all three independent variables, one of them in serious trouble, and major problems with both dependent variables: 
  • A rapidly diminishing portion of our federal spending going to infrastructure and other key economic support items and a rapidly increasing portion going to transfer payments.
  • Unwillingness to match spending and taxing and resulting accumulation of unsustainable debt.
  • A corporate tax structure that advertises ridiculously high rates and motivates game playing to reduce the tax bills with the result that high rates are delivering low tax revenues even while complicating and discouraging business.
  • The federal debt continues to climb and is now at or above annual GDP.
  • GDP growth is in a long term consistent downward trend.
Click on the charts to read the paragraphs of explanation. The suggested "targets" are mine.

Chart 1 - This is probably not increasing as fast as many people suspect and has actually been relatively constant over the decades. Let's just agree that 20% of GDP is a reasonable target for federal spending. Of course we don't know what the GDP is until the year is over but adjustments for misses can be made in the following year so that the long term average homes in on 20%.


Chart 2 - This disastrous trend, so-called entitlement spending, is starving the federal government of funds needed for investment in infrastructure and other business and investment stimulating projects. Taking money from one pocket and putting it in another solves no long term problems, not even poverty.


Chart 3 - Income tax coverage is much narrower than in past decades with about half having little or no liability. We need lower rates with broader participation and no special treatment. A flat 15% on all earned income above poverty level would just about do it. And it would eliminate the need for tax returns on earned income and almost put the IRS out of business. Read more here.


Chart 4 - This apparently regressive tax is excessive and falling short of the poorly conceived promises made to those paying it. (I say apparently because, while the taxes hit lower income folks harder, the benefits also strongly favor them, thus making the overall system less regressive. Very little contribution is required to get benefits, and benefits are capped.) Some argue to raise the tax. It would be far wiser to reduce the benefits based on means testing and run less rather than more money through Washington DC. Read more here.


Chart 5 - The unholy trinity of business, lobbyists, and congress has resulted in an incomprehensible corporate tax system that is difficult for all, fair to none, and expensive to maintain. A flat rate of 15% to 20% on publicly reported earnings before taxes would stimulate business and investment, put thousands of lobbyists out of business, let executives focus on their businesses rather than on pursuit of special tax treatment, and give congress time to worry about important issues rather than where their next campaign funds are coming from. Read more here.


Chart 6 - This just summarizes the last three, showing that the total contributed by the three big taxes is fairly constant over the decades except for the convolution caused by the inflating and bursting of the two bubbles of the last fifteen years, dot.com and real estate. (Added Later: That instability beginning in the late 1990's is a danger signal.)


Chart 7 - And this is a ridiculous picture of administrations and congresses from both parties over six decades consistently running deficits that pile on debt. The only exception was at the turn of the century when tax revenues from the dot.com bubble boosted revenues even as the associated false prosperity enabled some spending cuts.


Chart 8 - Read more here on the history of our national debt. The last good years were when we all worked very hard to pay off the burdensome debt incurred during WWII. That favorable trend ended in the 1970's with the first oil crunch and the end of $3 per barrel oil.


Chart 9 - This GDP trend is a pretty sorry and discouraging picture but does not present a situation without hope. Read more here about it.

Here are the actions we need to take to right the ship and change the trends on GDP growth and Federal Debt.
  • Reform corporate taxes to establish a new low competitive rate that every corporation pays, no favors allowed. Something in the range of 15 to 20% on all publicly reported profits, wherever earned, should do it.
  • Reform our social welfare programs, Social Security and Medicare, to stop paying bills for and sending checks to people who can afford to pay their own bills with their own income.
  • Limit Federal Government spending to 20% of GDP and fund 15% of it from corporate income taxes, 35% from personal income taxes, 30% from the payroll tax, and the remainder from excise and customs taxes.
It will take a while to kick in, but we would know this strategy has been successful if the GDP moving average and the federal debt curves change direction. Of course there would be earlier indicators such as more positive attitudes, more investment, better individual quarter measurements, etc., but, if we celebrate those, declare victory, and stop the improvement efforts, all will be lost. Solving these problems will require an extended attention span.


Below are links to sources used for the data in the above charts:
Who Pays Income Tax: http://taxfoundation.org/article/summary-latest-federal-income-tax-data

GDP and Government Revenue and Spending: http://www.bea.gov/itable/index.cfm

On Payroll Tax Regressiveness: http://www.wsj.com/articles/SB10000872396390443684104578063140488175464

National Debt History: https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

Corporate Profits Info: http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html?_r=0


Monday, May 11, 2015

Economic Update: Crisis Impact

There is so much data available that it is very simple to make bad situations look good and good situations look bad by careful selection of data and time frame. A one quarter difference in starting and ending points can make a huge difference. It is very easy for example to claim a huge reduction in the federal deficit since 2009 without pointing out that the deficit is still twice as large as in 2007. (The deficit is the gap between the red spending line and the blue revenue line in the chart below.)

So, here is my attempt to explain, within context and without spin, what happened to our national economy and the federal revenue, spending, and debt during the crisis which kicked in in 2008. I am comparing the most recent quarter with the fourth quarter of 2007, the last before impact of the crisis, and I am showing all the data for the seven previous years and during the recovery itself.

My readers may try to spin this, but all I am doing is presenting information. Well, you might accuse me of spin for the large bold red print on the percent increase in national debt. Click on the chart for an easier read.





Tuesday, April 21, 2015

How About Some MSRP's for Medical Care

Physicians and hospitals in the USA offer excellent medical care, in quality, quantity, and timeliness, to rich and poor alike. Of course there are exceptions, but, overall, on average, all things considered, we are the best. Please note that I said nothing about our “health care" system or our insurance. I am referring only to the medical services physicians and other trained providers offer their patients. Non-medical "Health care," after all, consists mostly of advice and is now widely available at no cost on the internet. And, if what we have been doing had been effective, we would not have an epidemic of obesity, heart disease, kidney disease, diabetes, etc. 

The US "health care" system continues financially stressed, and dysfunctional, even as Congress fiddles. It was reported last week, for example, that the United States House and Senate have passed similar bills that will:
  1. Stop a scheduled 21% cut in physicians’ Medicare fees (to keep Congress from having to deal with the traditional annual "doc fix.")
  2. Provide billions of “extra” dollars for health care for children and low income adults (with no explanation of the source of "extra" dollars.)
  3. Provide additional money for community health centers, (great vote getters for members of the House of Representatives.)
The article goes on to say that 66% of the cost of the new legislation is unfunded so apparently must be covered by borrowing, creating additional federal debt. And John Boehner brags, "For the first time in nearly two decades - and without raising taxes - Congress has come together in a bipartisan way to pass meaningful entitlement reform." That is an unbelievable statement.

About 16% of the cost of the new legislation will be covered with higher Medicare prescription drug premiums, and about 17% with lower Medicare reimbursements to hospitals. Given the current major trend of hospitals buying up physician practices and putting the doctors on salary, I can’t help wondering about the net effect on physicians of raising physician reimbursements while cutting reimbursements to the hospitals that are employing more and more of them. Is it any wonder that we see an increase in "concierge" practices?

What a mess! Here are some personal data to possibly shed some light on the issue and suggest a solution.

During the past year I had close encounters with a cardiologist, an ophthalmologist, and a dermatologist. In each case, the physicians, their staff, the services provided, and the processes used were excellent, and my level of satisfaction was very high. I paid nothing out of pocket, all expenses covered by Medicare. To top it all off, the news and prognoses from all three were very good. For myself, I have no reason to be unhappy. For the USA, I have deep concerns. 

For all that wonderful medical care, bills totaled more than $27,000, a significant amount of money to most of us, enough to buy a new car. But a closer look reveals that those bills were fiction. Medicare informed the providers that their total compensation would be limited to $5,664, only 21% of what they were asking. Well, for that, I would have been glad to whip out my AMEX Card several times during the year and pay for services as received. Some folks must spend almost that much a year at Starbucks! 

The reason I was not asked to whip out my AMEX card and pay is revealed in the linked article: “Congress seldom increases costs on seniors, fearing retribution come the next Election Day from older voters.” What a bunch of cowards! 

Here is the fundamental problem that needs to be fixed. We, patients and physicians alike, are held hostage by a complex, unfair, and burdensome system of government and private and employer provided health insurance and medical billing based on a provider-payer tug-of-war that leaves us sitting on the sidelines with no reasonable choice but to submit all our health care expenses, large and small, routine and exceptional, preventive and emergency, to the insurers for negotiation and settlement. We, as individuals, cannot get medical care for anywhere near that $5,664 Medicare paid on my behalf. And that is why Medicare has to process "four million medicare payments for doctors daily." The processing, possibly a great "job creator," is not free.

I would love to get a divorce from Medicare and free them of worrying about me, at least for a few years. I would love to have a major medical policy, government or private, that pays for my health care in full for all expenses above some reasonable percent of my income, say 20% or so, and pays nothing and requires no paperwork or claims below that point, except that I would be responsible for documenting expenses incurred. That won’t work in the current system of pricing because the only way I, or my insurer who is going to take over above a certain level of expense, can get a fair price is to let the insurer handle every little detail.

One pre-requisite to solving our medical care problems is transparent, fair, and competitive published prices, openly advertised, like cars, TV's, iPhones, houses, food, furniture, and clothing. If we had that, lists of MSRP’s (Medical Suggested Retail Prices) would be compiled and published on the internet, allowing us to negotiate and pay our own bills until we could document that we have used up our deductible. If and when that happens, we could notify Medicare that we have serious medical expenses, or have lost our incomes, and need help. Of course low income people would have little or no deductible and would be fully covered. And, the rest of us can all pray that we never reach that point of having to call on Medicare because of either seriously high medical bills or diminishing incomes. I'm guessing at least half of us never would.

Medicare would shrink, government would shrink, debt would shrink, Congressional influence would shrink, and freedom and personal responsibility would increase. Those are the reasons my proposal is just a dream and that a much more likely scenario is nightmarish growth and expansion of the government-health care-industrial complex leading to increased spending, increased benefits for all, increased competition for limited medical care capacity, increased taxes for many, increased debt for the nation, increased size of government, increased rules and restrictions, increased conflict with personal convictions, increased congressional power, and reduced freedom and personal responsibility.



Wednesday, April 15, 2015

Richard John Neuhaus: Liberal Lutheran to Conservative Catholic

A new biography, Richard John Neuhaus: A Life in the Public Square by Randy Boyagoda, does quadruple duty.  It provides a well-researched and documented critical look at the life and work of Neuhaus, in the context of  US history, including sociological trends, from the 1960’s through the early 2000’s, societal pressures on and changes in the role of the Church, or religion in general, in public life, and the continuing struggle over unresolved Reformation issues among and within Catholic and Protestant bodies. It is a great read.

Neuhaus (1936-2009) was raised the son of a Missouri Synod Lutheran pastor in Canada, received the Master of Divinity from Concordia Seminary in St. Louis, and served as pastor of Brooklyn’s low income, mostly minority, St. John the Evangelist Lutheran Church in the 1960’s. He preached and spoke in favor of social justice and civil rights and against the Vietnam War, and became well known as a liberal activist. As his liberal friends and associates moved leftward and more secular in the 1970’s, Neuhaus moved right and became a strong spokesman for conservative Judeo-Christian ethics and positions on public issues.

One of a diminishing minority of Lutherans who saw Lutheranism as a reform movement within the universal Catholic Church, Neuhaus gave up on Lutheran reform, was received into the Catholic Church in September, 1990, and was ordained a Catholic Priest a year later. Included in the biography are his eloquent explanations of the reasons for this change and for his shift to conservatism.

A prolific and powerful writer, Neuhaus is perhaps best known for The Naked Public Square: Religion and Democracy in America, published in the mid 1980’s, and comprising a direct challenge to the emerging Political Correctness movement. Neuhaus later assured his own access to the Public Square through founding of First Things: America’s Most Influential Journal of Religion and Public Life. The journal achieved a paid circulation of more than 30,000 and has continued after his passing.

The image of Neuhaus based on the biography and on his quotes therein is of a bigger-than-life, somewhat rude, impatient, and outspoken man who loved bourbon and cigars and didn't hesitate to consume even the cigars in a friend’s living room. However, watching him speak on one of the many YouTube videos available (example), he comes across as a loving pastor serving God and neighbor. Well, I suppose that too is a bigger-than-life image. You can download the book to your Kindle or iPad here






Published also on www.lastofall.net.

Thursday, April 9, 2015

Slanted Interviews and Loaded Questions

Megyn Kelly is sharp and so is Senator Rand Paul, and they are both right. Loaded questions such as the ones that caused the senator to demonstrate his impatience and lose his temper and sexist comments such as the one by Chuck Todd are both out of line and intended either to put focus on the interviewer rather than on the candidates we are supposed to be learning about or to simply make the candidates look bad. I think I could vote for a Kelly-Paul ticket. You can watch the interview here.

Wednesday, April 8, 2015

Sewage, Social Security, and Slush Funds

The City of Columbia, SC, is currently being sued for misappropriation of water and sewer revenues. The accusation is that diversion of millions of dollars a year to such as business and tourism promotion, even as the water and sewer infrastructure crumbled and attracted the unwelcome attention of the EPA to frequent sewage overflows, was and is illegal. The plaintiffs are not seeking damages except that the funds allegedly spent inappropriately over the past three years, somewhere in the range of $12M to $22M, be reimbursed and that the practice of fund transfers be stopped.

It would be nice if all the money collected in water and sewer fees over the decades had been used to maintain and upgrade the utility infrastructure and that Columbia had continually enjoyed a state-of-the-art system, highly rated in reliability, and attractive to new investors in business and industry. But that is all water under the bridge so to speak. Now the city will be issuing bonds and collecting additional taxes to pay the interest and redemption costs to meet minimal EPA requirements for keeping sewage out of the river.

That story is not a big deal for anybody but Columbia folks, but it reminded me of a much bigger deal affecting everybody in the USA, the misappropriation, by the federal government, over the past thirty years or so of Social Security taxes collected. The only real difference is that Columbia openly misused the funds and told us that was OK. The federal government “borrowed” the excess Social Security taxes collected, put non-tradable US bonds in the Social Security Trust Fund as markers, and misled us by claiming that the money was still there in the Trust Fund and available to pay Social Security benefits as needed. There was nothing there but debt.

It is true that it is a pretty safe debt, “backed by the full faith and credit of the United States Government,” but debt nonetheless, requiring either additional tax revenues or reduced spending in other areas to redeem the bonds as needed. And, even now, in spite of a “balance” of almost $3T in the Social Security Trust Fund, Social Security Tax revenues and benefit expenditures, after three decades of surplus, have merged, thereby eliminating that source of money for other purposes and putting tremendous pressure on discretionary federal spending.

In general, older folks like to argue that the Social Security system is financially sound and not in need of any reform such as reductions in benefits (though increased taxes on working folks would be OK) because they know that the big trust fund, the federal government obligation to pay benefits, is adequate for the rest of their lives. Such folks are forgetting or don’t care that the result of continuation of current practices means that their grandchildren will not enjoy the same benefits.

Wise younger folks are interested in fixes such as reduced benefits for current retirees and increased taxes on folks earning more than they earn. They want that safety net to be there when they retire, but don't really want to pay now. Everybody seems interested in somebody else paying.

My personal preference as a fix for this problem is that benefits be phased out for all who meet some reasonable income level from other sources, the national per capita average for example, thus shrinking the size and payouts of the Social Security over the next two or three decades. Under such an approach, Social Security would truly become a welfare program, targeted at the poor, and would no longer fund golf vacations and second homes.

However, if that austere approach is not politically palatable, my second preference would be a significant boost in Social Security Taxes to begin redeeming the place marker bonds and truly funding the Trust, all assets to be invested in some well diversified global stock and bond index funds. If we did that for fifty to a hundred years, we could probably enjoy a Social Security Tax holiday for a few decades and just pay benefits from the Trust Fund.

But whether we take the austere socialist or the liberal free market approach or some middle ground, let’s pull our heads out of the sand and pay the bills as we go. There is no rational justification for Congress treating the excess Social Security Tax revenue as a slush fund or for the City of Columbia treating excess water and sewer revenues as a slush fund.

By the way, it is worth noting that the excess Social Security taxes began being collected after the 1983 Reagan Social Security Fix. Some argue that the whole thing was a ruse by President Reagan, or more likely his advisers, to increase federal revenues under false pretenses in the face of strong resistance to higher taxes. Below are links to pro and con assessments of the Reagan fix. I am on the con side. You can see the effect and the fact that the excess has now disappeared on the charts below. Click on them for a better view.

Positive View of the Reagan Rescue (Misleading I believe)

Negative View of the Reagan Rescue (Pretty much my view)







Tuesday, February 17, 2015

US Military - Covering the Globe

I am dipping into an area about which I know little to nothing but just presenting some data and wondering aloud if it makes any sense. All the news is about how we are withdrawing from the Middle East, but the issue I am raising is US military manpower and how it is spread throughout the world. I had a gut feeling that our big forces are in Japan and Germany, two countries we defeated in war about seventy years ago, and that seems to be the case. I am feeling some discomfort with the withdrawal in progress from the current trouble spots and wondering if that is the right approach. The question in my mind is not whether we can defeat the Islamic Radicals but whether we can bring some measure of stability through a continuing STRONG presence. Here are the data, readily available on Wickipedia which makes the following claim:


"The following are countries, listed by region, in which US military personnel are deployed. The numbers are based on the most recent United States Department of Defense statistics as of December 31, 2014.[1] These numbers do not include any military or civilian contractors or dependents. Countries with fewer than 100 US personnel deployed are omitted."
I'd like to see the numbers with all the military and civilian contractors included. That would be a more accurate picture I believe, more comparable to data in past decades, and a better indicator of spending levels. Given these numbers only, it is interesting that our total military force consists of only about one of every 300 persons in the population.

I am strongly suspecting that the World still needs a policeman, and I don't know who is going to do it if we don't. We will NOT submit to UN control! The alternative is to bring everybody home and put up impenetrable barriers around this great free land, but that seems a bit selfish. Click on the charts for a better view.


The chart below shows forces by country only outside the USA.