Tag Archives: U.S. politics

how U.S. taxes are spent

In a poll of U.S. taxpayers, 95% of respondents had no idea how much the country spends on foreign aid, which is much less than 1%. It just shows that although rational people can disagree on how our tax money should be spent, we are not having a rational debate because most of us have no clue what it is really being spent on. A taxpayer receipt is a simple idea to help cure this problem. Ideally this should be done by the IRS or Treasury Department, but the White House has stepped in to do it since nobody else will.

I picked a hypothetical married couple with children making an income of $80,000 per year. There are a million different ways you can slice it. But no matter what you do, the biggest categories jump out at you. Income tax is only about 40% of what the government takes in from this family, with Social Security and Medicare taxes making up the other 60%. Pensions for retired people make up the majority of how the money is spent, with Social Security alone making up almost half. Even without an offical public health care system, the federal government spends a lot on health care – almost 20% of all the money spent between Medicare (for older people) and programs to help lower-income people (Medicaid and children’s health insurance programs mostly). Of course, state and local governments also tax and spend on health care, which is not reflected here.

The military makes up around 10% of all federal spending. If you add veteran’s benefits (I’m double counting here, since these include retirement and health care) and homeland security, that number comes to more like 13%.

So however you slice it, the big numbers are retirement, health care, and defense. If we want to make significant changes in either the amount of tax, or the outcomes of government programs, we should focus most of our debating energies in these areas.

 

grand bargain?

I don’t normally wade into politics on this blog, and certainly not Middle East politics. Then again, I occasionally discuss issues of war and weapons, because certainly these are important to the future of our civilization. Anyway, this caught my attention in Obama’s state of the union speech:

Our diplomacy is at work with respect to Iran, where, for the first time in a decade, we’ve halted the progress of its nuclear program and reduced its stockpile of nuclear material. Between now and this spring, we have a chance to negotiate a comprehensive agreement that prevents a nuclear-armed Iran; secures America and our allies – including Israel; while avoiding yet another Middle East conflict.

In other news stories, I have heard him give a 50% chance of a deal with Iran. Around 10 years ago, Iran supposedly proposed a “grand bargain“, in which they would give up any attempts to acquire nuclear weapons, and make peace with Israel, in return for normalized relations with the United States. (Have a look at the various original documents posted with the 2007 New York Times column in the link above, some of which supposedly came directly from the Iranian government at the time.)

Today, we have a much messier situation with a series of loosely related civil wars involving three or four ambiguous sides, and it is not clear whether a deal like this would actually result in more political stability for the region overall. But it certainly would be a nuclear proliferation victory, de-escalating tensions between Iran and Israel, and between Iran and Saudi Arabia, which is rumored to have a small nuclear arsenal on order from Pakistan. From the BBC in 2013:

Saudi Arabia has invested in Pakistani nuclear weapons projects, and believes it could obtain atomic bombs at will, a variety of sources have told BBC Newsnight.

Even scarier than a nuclear conflict between state actors would be if irrational extremists were to gain control of a nuclear arsenal in any one of these countries. When so many people are suffering and dying already, it seems a little selfish to worry about the impacts on those of us in relatively peaceful countries outside the region. But a nuclear winter caused by even a relatively contained nuclear exchange there would be no laughing matter for anyone on Earth. From Scientific American in 2009:

Because as other nations continue to acquire nuclear weapons, smaller, regional nuclear wars could create a similar global catastrophe. New analyses reveal that a conflict between India and Pakistan, for example, in which 100 nuclear bombs were dropped on cities and industrial areas, only 0.4 percent of the world’s more than 25,000 warheads would produce enough smoke to cripple global agriculture. A regional war could cause widespread loss of life even in countries far away from the conflict.

financial regulation

According to Simon Johnson, political momentum may be building in the U.S. for stronger regulation aimed at financial stability:

From the perspective of anyone seeking the nomination of either of America’s political parties, here is an issue that cuts across partisan lines. “Break up Citigroup” is a concrete and powerful idea that would move the financial system in the right direction. It is not a panacea, but the coalition that can break up Citi can also put in place other measures to make the financial system safer – including more effective consumer protection, greater transparency in markets, and higher capital requirements for major banks.

From the left, the emphasis has been on the megabanks’ abuse of power and the great rip-off of the middle class. From the right, the stress is on the hazards of crony capitalism, owing to the massive implicit government subsidies that these banks receive. But both left and right agree on the fundamental asymmetry that the recent “Citigroup Amendment” implies: Bankers get rich whether they win or lose, because the US taxpayer foots the bill when their risky bets fail.

Elizabeth Warren, Bernie Sanders, and financial stability

Elizabeth Warren continues to warn that another financial crisis may be in the making as big financial companies are able to influence laws shifting large risks onto the taxpayer:

Bernie Sanders also is worried that the big banks have too much influence over policy:

“Over the last several days, it has become abundantly clear that Congress does not regulate Wall Street but Wall Street regulates Congress,” Sanders said. “If Wall Street lobbyists can literally write a provision into law that will allow too-big-to-fail banks to make the same risky bets that nearly destroyed our economy just a few years ago, it should be obvious to all that their incredible economic and political power is a huge danger to our economy and our way of life.”

Sanders said, “Enough is enough…. If Congress cannot regulate Wall Street, there is just one alternative.  It is time to break these too-big-to-fail banks up so that they can never again destroy the jobs, homes, and life savings of the American people.”

the U.S. and the middle east

I can’t fact check everything in this Tom Dispatch article, but even if only half of it were true, the U.S. military footprint and spending in the Middle East is eye opening.

Soon enough, that Rapid Deployment Force grew into the U.S. Central Command, which has now overseen three wars in Iraq (1991-2003, 2003-2011, 2014-); the war in Afghanistan and Pakistan (2001-); intervention in Lebanon (1982-1984); a series of smaller-scale attacks on Libya (1981, 1986, 1989, 2011); Afghanistan (1998) and Sudan (1998); and the “tanker war” with Iran (1987-1988), which led to the accidental downing of an Iranian civilian airliner, killing 290 passengers. Meanwhile, in Afghanistan during the 1980s, the CIA helped fund and orchestrate a major covert war against the Soviet Union by backing Osama Bin Laden and other extremist mujahidin. The command has also played a role in the drone war in Yemen (2002-) and both overt and covert warfare in Somalia (1992-1994, 2001-).

statistical proof that the United States is not a democracy

Here it is at last – from Princeton and Northwestern Universities, statistical proof that the United States is not a democracy:

Each of four theoretical traditions in the study of American politics – which can be characterized as theories of Majoritarian Electoral Democracy, Economic Elite Domination, and two types of interest group pluralism, Majoritarian Pluralism and Biased Pluralism – offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. This paper reports on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues. Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.

I admit, I didn’t dig in and try to thoroughly understand all the statistics. They took a large data set where people have stated their preferences on various issues over long periods of time. The data set also has information on the incomes of the people responding, so they can do regressions of what various segments of society prefer. Then they look at actual laws that have been passed and compare the two. The results unfortunately but not too surprisingly, show that the preferences of the elite drive actual policy.

Their definition of “elite” was an income of “only” $146,000 a year. Sure, a lot of us would love to have an income of “only” that much. But the point is that is a household of two white collar professionals, not exactly the corporate jet set. So you could say policy seems to represent the preferences of the moderately affluent, upper middle class, or whatever you want to call it. But certainly not the preferences of the median household, the majority, or any sense of broad consensus. I think there is an important distinction to be made between the latter two – the truest democracy, I think, would not be one where 51% of people get their first choice of policy even if the policy is unacceptable to the other 49%. It would be one where the policies chosen are ones almost everyone can accept, even if they are the preferred by almost no one. So it would be a vision of the ideal democracy as diverse people living together in only mildly pissed off tolerance and harmony.