Position Statements

Where Steve Packard stands on the issues facing America

Sections:

 

 

The Economy:
Economic prosperity is best achieved by a generally free market that encourages competition and innovation, but does have the necessary regulations to assure that business is done honestly and that no company or individual ever gains enough control of a given sector to endanger the stability of the economic system.   Businesses that produce a useful product and provide jobs have every right to return a profit, but they must do so by playing by the rules and on a level playing field.

It is plain to see that the financial regulatory system has failed.  The collapse of the housing bubble and the crisis that has occurred in the lending sector and bond markets has dragged the entire US economic system down.  Clearly there is a great need for regulatory reform.

Unfortunately, the majority of politicians have responded to this with calls for more regulation, when in fact what is needed is better regulation.  The problem was never that there was not enough governmental oversight but that the oversight and regulations were not proper and addressed the wrong aspects of the financial system.   Piling on more regulations is not going to help, but will be a burden to businesses large and small.  Financial regulations should be simple and to the point, leaving little room for loopholes or technicalities to hide behind and should address the most critical issues.  Such regulations are easier to enforce and make markets more open.

Above all else, the US government must end the practices of subsidizing and encouraging high risk lending.   For many years, the federal government has actively worked to promote sub-prime lending, even creating two federal entities, Freddie Mac and Fannie Mae to increase the amount of low-interest, high-risk loans being made.  The justification for this was that it made it easier for lower income Americans and first time home buyers to acquire property.   While this may be true, it also resulted in a huge number of loans being made with very generous terms and extremely high risk of defaulting.   This is what drove the housing bubble and lead to the high rate of defaulting that collapsed the bond market and caused a domino effect across the financial markets.

Recognizing what caused these problems is the first step to preventing it from happening again.  We must radically overhaul Feddie Mac and Fannie Mae and reassess the role of the government in the lending industry.   Regulations must be changed to improve oversight without becoming an unbearable burden of red tape.

Education:
Though generally regarded as a state-level issue, current conditions necessitate that the United States government take a more active roll in educational policy. Educational standards need to be made more uniform to assure that students moving from one state to another in grade school do not face excessive gaps in their learning. High standards, especially for math and science must be universal. The No Child Left Behind Act did provide some important improvements to the system, but it can be improved upon greatly.

One of the biggest problems currently facing the educational system is the increased need for higher education. College level education is no longer optional in most fields and higher education is vital for most high paying careers. Yet higher education is also extremely expensive, pricing an entire class of the population out of college and severely limiting upward mobility.  Those who do attend colleges and universities are all to often left with huge amounts of debt in the form of student loans.

Simply subsidizing tuition is not an effective solution to this problem.  Not only would this be an enormous expense for the government to bear, but the colleges and universities of the United States simply do not have the capacity to provide all citizens with degrees.  The system as it now exists was never designed or intended to educate most or all of a population.

In order to increase access to higher education, we must look to alternative methods of learning beyond traditional university classrooms.   While conventional universities and colleges are an important means of providing higher education, they are not the only way of doing so.  In recent years we have seen the growth of online study programs and remote learning.  Online programs are one way of expanding higher education, but others exist as well.

Greater opportunities should be provided for accreditation through apprenticeships, work-study programs and for the recognition and accreditation of skills learned on the job.  Technical certifications are yet another important part of providing higher levels of accreditation without the expense and time of traditional university study.

Without turning our back on established colleges and universities, renewed use of apprenticeships, vocation, work-study and independent study programs can open up greater education to more people and increase upward socioeconomic mobility.

Energy:
Energy is a central to ensuring prosperity and national security, yet it is often looked at as a secondary issue. All societies require a secure supply of energy and in order to expand industry and create jobs, more energy will be required. Unfortunately, most energy policy is not based on the creation of more plentiful, inexpensive energy but on limiting the use of energy.

From an economic standpoint, energy is the purest form of wealth. The nations of the world that have the most energy to export are invariably rich. Most modern wars have ultimately been about energy. World War II was largely started because Japan had little access to oil or other energy sources and over control of coal and other energy sources in Europe. Today, we are heavily dependent on the oil-rich nations of the Middle East, making instability in the region a potential crisis and resulting in enormous sums of money being poured into the few countries with the greatest oil reserves.

Industry is always dependent on energy. When energy is cheap and plentiful, industry flourishes and costs plummet. When energy is expensive or in short supply, industry and commerce suffers. Simply having abundant energy virtually guarantees that industries and investors will rush to make use of it, while shortages and expensive energy has resulted in many companies relocating or closing entirely. The cost of energy is also part of nearly every product purchased, due to its use in manufacturing and transporting those products.

The US has been hit by increasing energy costs and by increased dependence on foreign energy, especially in the form of petroleum, used primarily for transportation. The US also gets an increasing amount of energy from natural gas, which is reasonably clean but suffers from price volatility and increasing needs for imports. Finally, a large amount of energy, especially for electricity generation comes from coal. Coal is cheap, secure and domestic, but it’s also filthy and has resulted in enormous environmental damage and thousands of lives lost due to air pollution.

In order to insure stable economic growth and national security, the US must focus on creating more clean domestic energy. Ultimately, the future of energy use is likely to be centered around electricity. For that reason, the power grid must be upgraded. Smart grid systems can help, but will not replace the need for more power lines and power generating capacity. The most economically viable and environmental method of electrical generation is nuclear fission, which is already providing almost a quarter of US electricity but which can be expanded to much greater capacity.

In addition to electricity, hydrocarbon fuels, such as gasoline, are going to be necessary for some time, even as we move toward more electricity for transportation. Providing more fuel domestically and doing so with a favorable environmental profile must be a high priority of the US government. Construction of more modern refineries and pipelines is an important step in the right direction as is encouraging synthetic fuel use. One way the government could help kick-start synthetic fuel projects would be to use its own purchasing power, favoring synthetic fuel when procuring fuels for military and civil government agencies.

Foreign Policy:
A combination of political bickering, conflicting policies and unpopular policies abroad has cost the United States some of the level of respect it once had in the world.   Although still very powerful on an international scale, the US no longer enjoys the same level of leadership in the international community that it once did.  However, through good, consistent policy and diplomacy, this can be regained and the United States can begin to improve its place in the international community.

An important part of keeping the US strong is recognizing the importance of our most well established allies.  Our NATO partners along with Japan, South Korea and other nations are vital to the interest of the US and a strong and unified economic and military front can assure that US interests are protected.

The military is a vital part of the foreign policies of the US and can be used for more than just making war.   A large number of countries rely on the US military in order to protect them from threats, but such relationships often can become tenuous.  Assuring the world that the military of the US is a credible force and will continue to be one is critical. Part of keeping our military force credible is avoiding unnecessary conflicts that occupy important strategic assets.  We are fortunate that the US military role in Iraq is finally coming to an end, because it tied up a large number of resources and thus reduced the credibility of our forces elsewhere.  While military force should always be the last option, there are times when “gunboat diplomacy” is necessary.

The US must always avoid becoming entirely dependent on any single nation for any critical resource, product or service.  Doing so allows that one country to virtually dictate US policy and leaves little room for negotiation.   While we should not fear the economic development of China, we have become nearly completely dependent on China for things like rare earth metals and as a backer of our massive national debt.   This is unacceptable.

Finally, while alliances are critical to the strength of the US, we must exercise extreme caution when providing aid or support to regimes in unstable areas of the world or when there is any question about the loyalties and agenda of those being treated as allies.  We should have by now learned this from our interactions with Iraq and the Taliban in decades past.   Yet today we provide unquestioned support of countries like Pakistan despite very real concerns about the future of the nation and the true motives of the regime.

Government Spending:
The US government is currently spending far more than it takes in from tax revenue. This deficit is increasing the national debt to astronomical levels. We now owe many trillions of dollars both to domestic entities, foreign nations and to our own reserve. This is not just a problem for future generations. Every year, our national debt costs us more and more in interest payments. It also impacts confidence in our monetary system. As debt spirals out of control, it becomes less and less possible to actually pay it down. We are reaching the point where it will simply have to be inflated out of existence. While the current economic situation has kept inflation in check, the possibility of rampant inflation in the near future, as a direct result of the debt, is something that can’t be ignored.

Increased tax revenue may help with the problem, but it can’t be done entirely by taxation. Over-taxation can also have grave economic consequences. Maintaining a sustainable government and economy can only be achieved by reducing spending and making the government run more efficiently. Doing so has other benefits, including reduced economic losses due to wasteful policies.

To achieve this, there are certain things that will need to change in how the government is run. Redundant projects must be eliminated. Organizations within the government need to be realigned to work more closely together to avoid unnecessary expenditures. Extremely generous subsidies that have little practical value, such as those paid to ethanol producers, must be brought to an end. The problem with this is that most politicians are very good at spending money and yet do not like cutting programs, even when they are not needed. Cutting a program or subsidy usually means a special interest will lose money, and such special interests will spend a great deal to lobby politicians not to end the gravy train. Politicians who are willing to stand up to these groups are needed.

There are other aspects of government which must be changed. One is the so-called “Use It Or Lose It” method of fund allocation. It encourages departments to spend more than is necessary because they are penalized with lower budgets if they do not spend the entirety of their allotted funds. Rewarding overspending and punishing saving should never be the rule. Departments which spend less than they are budgeted should be rewarded by being allowed to carry at least part of the excess funding onto the next fiscal year.

Homeland Security and Anti-Terrorism:
The events of September 11, 2001 made it crystal clear that the national security and interests of the United States are threatened by terror groups who will exact harm to US interests by whatever means possible. While it has been more than ten years since that day, the threat is still very real and will likely be with us for some time. There is no doubt that we must remain vigilant against terror groups, both foreign and domestic and to work to improve domestic security.

However, the threat of terrorism cannot be used to justify violations of the basic rights of US citizens.   The United States is founded on the basic principles of individual rights and that everyone is entitled to being secure in their freedom, person, property and private communications against unreasonable intrusions.   If we give up these rights then there’s really nothing to bother trying to protect.

Federal and state authorities do need certain powers to fight crime and terrorism, but these must only be granted within very well defined constraints.   Authorities can tap phones and private communications, but only with a justly issued warrant.  That warrant can be sealed, if necessary, but only when a properly appointed judge has ruled so, and they must be subject to revelation or revocation should a court order so.  Persons may be detained but only for a limited period of time before charges are filed and are always entitled to legal representation and the opportunity to fight any accusations made.  Nobody, not even the federal government is above the law.

The violation of these basic rights is more than shameful, it borders on treasonous.

The cause of homeland security is also no excuse for the boondoggles and enormous wastes of money that have occurred through the DHS and other agencies.  Blank checks have been issued to local governments allowing them to buy equipment of questionable value.  This practice must be put to an end.   So to must be the enormous expenditure on projects of limited value. Huge sums on radiation detectors, for example, despite the fact that they’re only useful in combating one of the least credible threats out there [dirty bombs] and useless against all others. In the meantime, we have done very little to combat other, far more dangerous threats to national security.

Many of the agencies and projects ostensibly started to improve homeland security have been spectacular and embarrassing failures. The Transportation Security Agency has done little to improve safety of air travel but has done much to make it miserable for flyers. The Department Of Homeland Security took over FEMA and became responsible for disaster response. The first major test of the department was Hurricane Katrina, where it failed very very badly.

Real accountability is long overdue for the Department of Homeland Security and most US anti-terrorism agencies and undertakings.

Taxation:
Nobody wants to have taxes and there’s no doubt that taxes should be kept as low as reasonably possible. None the less, the government does need operating money and thus taxes are a necessary evil.  As our national debt spirals out of control, there’s no doubt that tax revenue needs to increase.  Even if we stopped adding to the debt today, it still will require huge sums of money just to pay off.

No social class should ever be burdened by excessive taxation, but the taxes of the 1990′s were not excessive and did not result in an unacceptable burden.   Allowing Bush Administration tax cuts to upper income brackets to expire would be a step in the right direction, increasing tax revenue without a wholesale increase in taxes and with manageable increases in the income tax of the highest brackets.  Unfortunately, it alone will not be enough to get the financial house of the US government in order.

Tax policy needs to be reevaluated across the board, with eliminations or reductions of excessive dedications that only benefit narrow sectors at huge costs.  Hundreds of billions of dollars are lost due to deductions for personal expenses like mortgage interest.  The mortgage interest deduction is too ingrained in the US housing market to eliminate, but it should be capped at a reasonable maximum.  Doing so can also avoid excessive encouragement of lending beyond reasonable limits.

In all cases, taxation must be used with restraint and a complete understanding of the effects they can have on the economy.  Some forms of taxation are far worse than others.   Taxes on the payroll of companies are undesirable because they increase the cost of hiring workers.  Such taxes should be completely replaced with more generalized tax revenue.   Taxes on energy are also undesirable because of the effect they have on the economic competitiveness of the US and the fact that they tend to be regressive.