I went for a walk this morning...

Not just because my doctors keep after me to exercise and control my weight.  Not just because I ate something yet again I shouldn't have last night (yes, one part of it was fried).  Not just because I don't want to buy bigger clothes again.  It's all of that, but mostly it's the realization I don't want to wind up back in ICU.

So I walked further and longer than I have in quite some time.  Now I'm sitting here getting more sweaty by the moment and pondering the things I saw.  A bakery I hadn't noticed before was just getting ready to open as I passed at a quarter after six in the morning.  The baker was icing something that smelled wonderful.  Another local merchant to be avoided.

I saw a "minor surgery" physician's office I hadn't seen before.  It just seemed out of place because I expect to find doctors in medical buildings, not in storefronts on major thoroughfares.  The optometrist a few doors down, not so out of place.  The dentist on the other side, again, often found in a storefront, or a stand-alone building as opposed to being in a medical tower.

There were three places that do massage, but fortunately for my wallet, none were open at that hour.  The full-body massage is on sale at the one place that isn't exclusively for foot massage.  Then again, the two foot massage stores are on opposite sides (not next door, but close) to an adult-oriented shop that features CFM pumps in their window.  For the unitiated, CFM is an acronym for "Come F**k Me" that I learned while dating a Las Vegas showgirl who apparently liked dating guys she could tower over when she wore her own CFM pumps.  She was four or five inches taller when we were both barefoot, but when she put on those shoes, I felt like Mugsy Bogues standing next to Kareem Abdul-Jabbar.

I saw the big box Best Buy I live near and placed yet another mental bet about the future of that company.  I saw an O'Reilly auto parts store, and heard their jingle in my head.  I saw three joggers and two walkers, all of whom said "hello" or nodded their head in acknowledgement.  Finally, I saw my front door.  That was the best sight of all.  I'm so looking forward to seeing it at the end of tomorrow's walk.

Chicago and Boston have it all wrong...

The mayor of Boston and the aldermen who run Chicago have decided that because Dan Cathy, President and CEO of Chik-Fil-A has said that he is opposed to gay marriage, they are going to put roadblocks up to prevent the company from opening new locations within their city limits.

Time for a civics lesson for these elected leaders.  You can't do that.  Chik-Fil-A is not discriminating against gays in employment (there was one lawsuit I am aware of, but Mr. Cathy was not talking about hiring).  Chik-Fil-A is not saying "gays are not welcome in our restaurants.  He's given his personal belief on an issue and now he's being punished for his freedom of expression.

When it comes to individuals wanting to punish Mr. Cathy and his company, that's just fine.  People are free to boycott Chik-Fil-A, to demonstrate outside their locations, to try to convince others to not patronize those locations and so on.  But when it comes to governments, at the city, county, state or federal level, they need to back off.  There's this little thing called the First Amendment.  Let's look at it's text again, as a refresher:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

The 14th Amendment requires that states and lower levels of government abide by the Bill of Rights and not abrogate those rights granted to the people.  In denying the Chik-Fil-A company required permits, licenses and so on, solely because of speech made by a company official, these elected officials are denying Mr. Cathy his First Amendment rights.

Hey, I'm all in favor of legalizing same-sex marriage.  It should be the law of the land.  The Defense of Marriage Act is unconstitutional and needs to be overturned by the Supreme Court.  But only the people have the right to economically punish a business for exercising its right to speak freely.  Not the government.

The definition of "Assault Rifle"...

Let me begin this by saying I do not belong to the National Rifle Association, nor do I intend to join.  I don't own a gun at present, although I have in the past and I might again someday.  I'm totally opposed to the idea of civilians owning machine guns, mortars, grenade launchers and the like.

All that having been said, what James Holmes used in the shooting in Aurora was not an "assault rifle" by definition.  That's because a true assault rifle fires on either full-automatic or semi-automatic fire mode.  For those who don't know the difference, semi-automatic means you pull the trigger once, and one round is fired.  Because it is an "automatic" weapon", the minute you fire one round you can fire another on semi-automatic mode. 

Full-automatic mode means you pull the trigger down and hold it and the gun will fire one round after another, as fast as the weapon is designed to fire.  If it has a cyclic rate of fire of 600 rounds per minute, and there is a 30 round magazine loaded into the weapon, it will take only 3 seconds with the trigger pulled and held to fire off all 30 rounds.

Now we can debate the issue of the lack of any real need for any civilian to own 100 round drum magazines later.  That's a real issue and California already bans those type of magazines from being owned.  All states should.  But let's focus on the fact that the weapon used by Holmes was not an assault weapon, by definition.

In fact, it is almost a certainty that the rifle being used by Holmes that night didn't even fall under the definition of an assault weapon as outlined in the 1994 Federal ban on such weapons.  If it was so critical to ban assault weapons, why weren't the definitions of the weapons that were banned by this law widened?  Why was this law allowed to expire in 2004?  Ah, someone will say that Bush Jr. was President and Congress was in the hands of the Republicans.  Fair enough.  So why, when Obama became President and had a majority in the House, and a filibuster proof majority in the Senate, wasn't this ban re-enacted?  Apparently this wasn't a high priority.

Polling data by Gallup shows that 40% of Americans own a gun.  Simple math tells us that means there are at least 126 million guns in the U.S., and that's assuming the 40% only own one gun each, which is not the case.  Let's make a conservative estimate and say that there are roughly 150 million guns in the hands of Americans who aren't military personnel or police officers.

That means you could close every gun store, every sporting-goods store's gun department, all of the WalMart and other sellers of guns today and we would never completely get rid of the guns in the U.S.

There are steps we can take, that are reasonable and achievable.  One would be to require anyone who wants to buy a gun to undergo not just the criminal background check that is done now, but that the potential gun buyer is not under treatment for any mental illness or other condition that would preclude gun ownership.  We can ban the sale of large magazines (say more than 20 or 30 rounds) on a nationwide basis.  We can require all new firearms owners undergo safety training.

The suggestion that increasing the availablity of CCW (Carrying a Concealed Weapon) permits would just trigger (no pun intended) more violence is ridiculous.  31 states have these laws already and there isn't a single such state that's ever rescinded its CCW law.  There are far more incidents where someone who had a gun available to them using it to save lives than there are of spur of the moment decisions involving a CCW permit where lives were lost.  "Oh, we'll end up right back in the Wild, Wild West."

If only that would happen.  What people don't grasp is that the rates of murder and homicide were much lower in those days on a per capita basis than they are now.  Many more people are murdered in 2012 than were in 1862 when people carried their guns on their hips in the Wild West and it was the rare exception to see a man who wasn't "strapped" on a Western street.

What happened in Aurora is tragic.  But let's get the facts straight.  One last rant.  If I hear one more gun-nut say that if he'd been there with his gun, he'd have shot Holmes down with ease, putting one right between his eyes.  The theater was dark, there was smoke from the gas grenade, people were running in all directions and some Rambo-wannabe is going to make a headshot from across the room with his little automatic pistol?  Even if he had, odds are good it would have just bounced off the ballistic helmet Holmes was wearing.

Penn State University should act before the NCAA...

Tomorrow morning the NCAA will announce its decision on penalties and sanctions against the football program at Penn State University.  Some will argue that the NCAA has no right to penalize the university because it didn't violate any NCAA rules.  Those who do need to re-read the rulebook and pay particular attention to the rules involving conduct and ethics.

But the University should tell the NCAA to delay the announcement and do the following:

1.  Ask the NCAA to allow all football players to transfer to other universities without having to sit out a season, which would normally be the case for scholarship athletes.

2.  Once that is approved, PSU should voluntarily terminate its football program for at least a five year period.

3.  Anyone even remotely connected with the cover-up should be fired if they won't resign.

Why?

Because this is an issue the University should deal with on its own rather than waiting to be penalized.  Let's look at the facts.

Jerry Sandusky was convicted of dozens of counts of child molestation.  He may appeal, but his guilt beyond a reasonable doubt has been established.  Two former Penn State officials, athletic director Tim Curley and the school's vice president Gary Schultz will go to trial and face perjury charges for lying to a grand jury about what they did and didn't know about the Sandusky case.  Emails have been uncovered, revealing that the legendary PSU football coach Joe Paterno was involved in the cover-up. 

Vickie Triponey, former PSU standards and conduct officer was fought tooth and nail by Paterno over who was going to discipline football players for infractions throughout her tenure at the University.  She finally resigned her position after an argument with Paterno in a meeting, although she has never officially confirmed this, saying instead she resigned over "philosophical differences".

Clearly PSU became the home of a personality cult surrounding its head football coach.  They deified him, erecting a statute of him while he was still alive.  Aside from Rocky Balboa, who is a fictional character, and the late Kim Jong Il, I can't think of anyone who had a statute of themselves erected while they were still alive (although there may well be other examples).  That JoePa felt he, his coaches, staff, former coaches and players were "above the law" seems evident.

Shutting down the program allows healing.  It allows the players, guilty of nothing more than being members of a dirty program, to go on with their careers without penalty.  It indicates that PSU realizes it needs to change, to try to live up to the ideals it preached and failed to abide by.  It will resolve the situation once and for all.  There will be plenty of discussions before the program is reinstated, if ever.

A new broom sweeps clean.  Penn State University has swept enough under the table.  Time to clean house and start over.

Shoot First, Verify Later is Not Good...

When I was a working journalist, Brian Ross of NBC News was one of my heros.  A fearless investigative reporter, Ross covered the toughest stories.  He was inspiring.

Now, 25 years later, he works for ABC News and he's done something unthinkable and unforgivable.  He ran a story without verifying it was accurate.  Worse yet, he allowed his personal biases to intrude into his coverage of the news.  Now if he were a commentator and not a reporter, this wouldn't be such a big deal.  But he's not a commentator.

Brian Ross took the horrific shootings in Aurora, CO and used them to advance his personal, political agenda opposing the Tea Party.  He found someone with the same name as the shooter on a Tea Party website and went ahead and reported the shooter was connected to the Tea Party without first making sure it wasn't a case of two different people with the same name.  That's exactly what it was. There is no evidence that the real shooter was ever a member of the Tea Party or that his politics are conservative.

Brian Ross shot first, by leading with the story before all the facts were checked.  He and ABC News have apologized.  That's not good enough.  Brian Ross should be fired.  Or better yet, he should offer his letter of resignation.

Our heros have feet of clay.  One of mine just proved to me that he isn't the man I thought he was.

I will not watch ABC News again until Brian Ross no longer works there.

A Way for Employers to Save on Health Insurance...

There are many employers who give their employees group health insurance benefits, for no premium, a small premium, or a hefty premium.  The issue with these plans is that once the person has access to them, there is no incentive to not make maximum use of the benefits available.  So many who are covered by these plans use as much of their benefits as possible.  They take advantage of alternative therapies like accupuncture and chiropractic, when available.  They run to the doctor for every mild cold or flu-like symptom, pay their $10 or $20 co-payment, rather than just taking some aspirin (or Tylenol), drinking lots of fluids and getting some rest.

There is a way that employers can maintain a healthy employee population, provide these benefits and offer employees an incentive to use their healthcare benefits wisely rather than in a profligate manner.  It's called Partially Self-Funded Insurance.  Here's how it works.

The healthcare insurer collects a small premium for handling enrollment/disenrollment and claims processing.  They collect another, somewhat larger premium to insure against gigantic claims (let's say in this case more than $40,000 per individual employee, and as a group against a maximum amount of total claims paid out).  We're setting up this plan for a hypothetical employer that has 300 employees.  Under their old plan, they were paying roughly $1.5 million in premiums for their old plan.

Now we're going partially self-funded.  We won't pay more than $40,000 in claims for any one employee, and after paying out $300,000 for those two previously mentioned premiums, we have a $1.2 million budget and that's the maximum we can be forced to pay out in the plan year.  Anything over that will be paid by the insurer (that's why they collected the second premium).

The incentive comes from the fact that any part of that $1.2 million we don't spend on employee healthcare expenses remains with the company.  It's an expense we did not incur.  So, we offer the employees an incentive.  "Okay people, here's the deal.  We will split whatever is left of that $1.2 million at the end of the year with you.  If we spend only $900,000, that's a $300,000 savings, and you'll get half, or $500 each.  If we spend less, you get more."

Then we tell them we want them to take full advantage of the preventative benefits in the plan.  Get that annual physical.  Get that well-woman check.  Every dollar spent on preventing illness saves money in the long run.  We don't want them to just not go, we want them to be smart, informed consumers of healthcare benefits.

The hidden benefit of doing this?  It will drive down the amount of claims paid out, which means premiums will go up less, or possibly even decrease in the next year. 

The Debate over Insuring Pre-existing conditions

One of the provisions of what we call "Obamacare" is that insurers can't choose not to cover people who have pre-existing conditions.  I have no issue with that, as long as insurers are allowed to adjust the cost of insurance coverage for those people so as to not automatically be forced to lose money.  A little explanation is in order.

A pre-existing condition is merely an illness, prior injury or other condition for which the person has sought medical treatment or been diagnosed as having, prior to their enrollment in a healthcare insurance plan.  So someone who has been taking prescription medications for high blood pressure must disclose this on their application for an insurance policy (unless they're getting coverage through a group plan) and the insurer should be able to adjust the premium this person will pay for coverage accordingly.  In the past they could have denied coverage, but that's no longer an option.

Remember, the purpose of healthcare insurance is to provide protection against an unforseen risk.  You don't know you will get ill, you don't plan to get ill or need medical attention, but insurance is there, just in case you do.  Unforseen risk.

Well, pre-existing conditions aren't an unforseen risk.  They are known in advance.  So the cost of treatment must be factored into the cost of premiums for the insured.  Again, I'm referring to individual plans. 

An insurer makes money by providing coverage with the idea that they will pay out less in claims than they receive from the pool of insureds.  Let's assume, just for the sake of argument, that an insurance company's administrative costs in providing coverage is 10% of what they take in, in premiums.  So if 100 people pay $500 per month, they take in $600,000 in annual premiums and they are left with $540,000 to pay out claims for those 100 people during that year in order to break even.  Any profit will come from the difference between what they actually pay out (insurance industry buzz-term = "claim's utilization rate") and that $540,000.

Now let's suppose that one of the plan's new enrollees at the start of their fiscal year happens to suffer from Hunter's Syndrome (I picked a rare, unusual case to make a point).  The best treatment available for this condition is a drug called Elaprase.  Annual treatment cost for Elaprase is $375,000 per year.  So if this insurer is forced to provide a policy to this person with that pre-existing condition, it will lose money on this group of patients unless the other 99 need medical care that is less than $165,000 for the entire year.  A losing proposition.

The law prior to Obamacare already provided for those who had insurance and a pre-existing condition to change policies without any limitations on their pre-existing conditions.  That's from a law passed in the late 1990s known as HIPAA (Health Insurance Portability Accountability Act).  In those days, if a group health insurance plan enrolled someone with a pre-existing condition and they had no prior coverage, the insurer would exclude benefits for the pre-existing condition for a limited period.

But group plans pool risk.  Group plans have their premiums adjusted upward when there is a very high claims utilization rate.  One person with a very expensive illness or condition can cause an entire plan's premiums to go up.  When I was administering health benefits for an employer with 200 employees receiving health benefits we once saw a year in which the insurer wanted to raise our premiums by 32%.  They'd spent over 95% of our premium dollars from the prior year on claims.  They'd lost money.

So I don't see how insurers that are in the business of turning a profit can afford to be forced to take on pre-existing conditions without being able to adjust premiums on those insured to help pay for them.  Pooling unforseen risk is fair to those who are sharing that risk.  Pooling the expense of an existing condition means all the healthy people are subsidizing the one with the pre-existing condition.  That's a noble sentiment and may be a workable solution if there are enough people to spread the expense among.

I don't see a workable solution for those with pre-existing conditions who have no insurance at present where they can just get insurance for the same cost as anyone else and then have their much higher medical expenses paid by private insurers.  It just doesn't fit into the model of insuring against unforseen risk and making a profit.  But mandating that everyone get insurance, to pool the risk among as large a group as possible is a step in the right direction.

Bruce Springsteen may be the Boss but he fouled up in Hyde Park.

It was a simple enough thing.  Bruce Springsteen and the E-Street Band (minus the late, much missed Clarence Clemens) were giving a concert Saturday night in Hyde Park.  Bruce and the band, along with his manager, assistants and everyone else was well aware that there is a 10:30 p.m. noise curfew in the park and he needed to wrap his show up by curfew time.  Although it was clear if he'd run five or ten minutes over, it wouldn't be a big deal.  But he certainly couldn't just go on playing until the park itself closes, at midnight.

So what does Bruce do?  He gives an outstanding show, as always.  Then he runs 30 full minutes beyond curfew, upsetting authorities.  At that point, rather than shutting down, he invites Sir Paul McCartney to the stage for an impromptu jam session.  A spectacular idea if they weren't already well past the established curfew.  Two songs later, the plugs on the amplifiers were pulled and the show ended abruptly.

No one is happy.  Sir Paul is silent, but Bruce and members of his band have made their displeasure known through Twitter.  The fans in attendance wanted the show to continue.  But noise complaints among those who live near the park are on the rise and have been for some time.  That's why the curfew is in effect.

So what's going to happen as a result of this?  Crowd size for future concerts will be reduced again.  And, the 13 event calendar for next year's concerts in the park series has been slashed from 13 to 9.  4 concerts that won't take place next year because those performing this show wouldn't follow the rules.

Now rules and rock don't normally go together well.  But when what you do has such a great impact on others, maybe Bruce and his band owed it to the rock fans of London to not force cancellation of four shows they could have gone to next year.

Or the London Mayer could have been there, and told the concert-goers, and the surrounding residents that he'd approved an exception to the rules for this event because the Boss is the Boss.  That would have been fine, particularly if advance notice had been given to those residents so they could lock their windows, or go away on that night if it meant that much to them.

This fiasco was avoidable.

The Real Reason the Bush Tax Cuts Were Temporary

In 2001, George Bush Jr. took the oath of office.  He offered a tax cut proposal that was introduced into the Congress.  In it he did a lot of things, most discussed of which was lowering the top rate charged on ordinary income from 39.6% to 35%.  All of the proposed tax cuts were voted to take effect and last for ten years.  Why weren't they implemented permanently?

There is much talk about how Bush sold the cuts by making them temporary.  The real reason they weren't made permanent and why Congress is now considering the second extension to those cuts is very different.  It has to do with two very important numbers.  They are the number 60 and the number 50.

50 is the number of Senators you need to vote for something in order for it to pass if there are 50 votes against, when your party has the Vice Presidency and can cast the tie-breaking vote.  But because the partisan breakdown in Washington, D.C. has become so complete, any bill going through the Senate really needs 60 votes to pass.  That's the number needed to invoke cloture.

Cloture is a process where the Senate limits the debate on a proposed piece of legislation to prevent something called a filibuster.  A filibuster is when the party in the minority in the Senate will keep speaking on a pending issue to prevent a vote from being called.  One of the most famous filibusters in history was when the Civil Rights Act of 1964 was being considered.  18 Democratic and 1 Republican Senator spent 57 days filibustering to prevent this bill from coming to a vote.  On June 10, 1964, Senator Robert Byrd (D-W.Va) ended a filibuster speech that had lasted over 14 hours.  Eventually cloture was invoked (it took 67 votes back then).

So now it routinely requires a vote of cloture to pass any contentious piece of legislation offered in the Senate.  But there's an exception.  Debate on budget bills in the Senate is already limited to 20 hours.  This is known as "reconciliation".  But thanks to the Byrd rule (remember we just heard that name), any bill passed using the reconciliation process is limited.  The Byrd rule says that reconciliation can't be used for any bill that would increase the budget deficit beyond 10 years after the reconciliation measure.

President Bush Jr. did not have 60 votes in the Senate in favor of his tax cuts.  But by using reconciliation, Senators who were supporting the cuts were able to pass them, albeit with the Byrd rule limitation that they would have to expire in 10 years.

That's the real reason why Congress is once again debating whether or not to extend these tax cuts.

By the way, I'm of the opinion they should be allowed to expire.  That 4.6% in additional income tax on the highest income earners isn't going to stop job creation.  It isn't going to harm those people in any serious way.  But it will help to start the process of our government learning to live within its means.

There is a statue of Joe Paterno...

at Penn State University.  It needs to come down.  If not destroyed, it needs to be moved somewhere, where the public will not see it.  Put it into eternal storage, hide it in a closet in the athletic department or just melt it down for scrap metal.  But it needs to come down.

But wait, some say.  You can't judge a man's entire life and career by one action.  Joe Paterno was one of the greatest, if not greatest, college football coaches in history.  He was at PSU for 61 years.  He coached five undefeated teams to bowl victories.  He coached more wins than any other football coach in college football history.  He and his wife donated over $4 million to Penn State.  They funded the library that bears their names.  There's no counting how many lives he influenced positively.

I'm reminded of another figure in our history who is judged solely by one event in his long career.  Richard M. Nixon.  Today, 18 years after his death and 38 years after his resignation from the Presidency, his legacy can be summed up in one word.  Watergate.

Richard Nixon was Vice-President for 8 years.  He was President for almost 6 years before he resigned.  He served in Congress as both member of the House, and as a Senator.  He could have used his religion (he was a Quaker) to avoid military service.  Instead he volunteered and served in World War II.  He gets at least partial credit for exposing the spying of Alger Hiss.  He fought Communism.  He fought for statehood for Alaska and Hawaii.  He voted in favor of civil rights for minorities.  He pushed the Civil Rights Bill of 1957 through the Senate while Vice-President. 

When JFK defeated Nixon in the 1960 Presidential election, it was Nixon who refused to join in the chorus shouting "fraud" regarding allegations of voter fraud in Illinois and Texas.  He refused to contest the election or engage in what he felt would be divisive activities that would diminish the U.S. in the eyes of the rest of the world.  Even though he announced he wasn't going to seek office again after losing the 1962 race for the California governorship, he supported Barry Goldwater loyally in 1964.  He worked hard in the 1966 mid-term elections to get Republicans elected to Congress, to try to wipe out the gains Democrats had made in 1964 in the wake of Goldwater's candidacy.

As President, his accomplishments were impressive.  He opened the door to China when many thought it closed forever.  He did bomb Cambodia, but he also brought about peace in the Vietnam war.  He ended conscription into the military, although we still have draft 'registration' to this date.  He negotiated SALT I and the Anti-Ballistic Missile Treaty, two landmark agreements in arms reductions.  His administration improved relations with the Middle East, including the restoration of diplmatic relations with Egypt for the first time since 1967.  We can thank President Nixon for the Environmental Protection Agency.  He spoke about the environment in his State of the Union address, he supported the Clean Air Act and the formation of OSHA.  Nixon desegregated public schools.  He implemented the Philadelphia Plan, the first program of Affirmative Action.  He endorsed the Equal Rights Amendment, and in spite of protests from feminists that he did little to help the ERA or their cases after the election, he appointed more women to cabinet positions than President Johnson had. 

That's a lot.  But it's all almost forgotten today because Nixon was definitely involved in the Watergate break-in and the attempt to cover it up.  All of his accomplishments today, well documented at the Nixon Library in Yorba Linda and in the history books, are almost completely ignored.

And they should be.  It was a betrayal of the trust of the American people.  It was a crime.  So too was what JoePa did when he helped to cover up what Jerry Sandusky did. 

Take that statue down!

We won't know...

if Sage Stallone really died of a drug overdose for weeks.  If ever.

We also won't know for weeks, if ever, if it was drugs, if they were prescription, over-the-counter, or illegal drugs.

But in the end, if he did OD, then his name goes on a long list of why most of those drugs that are illegal should remain illegal (I'm no longer opposed to legalizing pot).  Those who argue that people should have the right to put whatever they want in their bodies in a free society have a point.  I just think it's outweighed by the devastation that such drugs do to those users, and their friends and families.

A man should never have to bury his son.  Sylvester Stallone is now going to have to do that horrific thing.  Most people who die from drug use and abuse don't really want to die.  They just get in over their heads.  That's why it is never safe for the recovering addict to give into entreaties to "just this once, once won't hurt you."  It's the same as an alcoholic who finally achieves sobriety giving in to just one beer.  It never stops at just one.

We can argue over the difference between physical and psychological addiction until the cows come home.  In the end, does it really matter?  Yes, some people can drink gallons of alcohol and take all sorts of drugs and remain unaddicted.  Some can't. 

I guess I'm just tired of reading about people, celebrities and the anonymous, dying before their time because they sought to escape their reality by getting high.  It's the first step down a road that should not be travelled.  Far too many who take that first step go all the way to an early grave.

RIP Sage.  If one person stops or doesn't start drugs because of your example, perhaps your death won't be completely meaningless.

The Budget Deficit - More Truths

First Truth - Basic Math

Revenue - Expenses = Deficit
That's the basic equation.  Anytime the amount spent exceeds the amount received, you have a deficit. 

Second Truth - History

President Clinton was in the White House the last time we had a balanced budget.  That's a true statement.  President Clinton presided over four years of balanced budgets.  That's an almost true statement.  If you use accrual accounting, only three of those four years were balanced budgets.  Accrual accounting is where you book future liabilities in the year the commitment to pay them out in the future is made.

Before Clinton, the last President to even submit a balanced budget to the Congress was Richard M. Nixon in his final year in office.

Third Truth - Process

The President is required to submit his (or her) budget request to the Congress by no later than the first Monday in February.  Traditionally, since this became law in 1921, that is the day on which the budget is submitted.

Because the U.S. runs on a fiscal year that runs from October 1 through September 30, the Congress must complete the budget appropriations bills in time for the President to sign them before the new fiscal year begins.  Instead, what's been happening in recent years is that rather than passing the required bills, Congress keeps passing "continuing resolutions" that allow spending to continue, borrowing to continue by increasing the national debt ceiling, and in general the continued use of the no-limit "credit card" Congress issued itself in passing the authority to spend more than it takes in.

Fourth Truth - Entitlement and other Mandated Spending

Each year, spending for certain mandated programs, mostly entitlement programs must go on.  Welfare, food stamps, Social Security Retirement and Social Security Disability programs are just part of what gets spent.

Multi-year appropriations bills like Defense Department contracts to purchase airplanes, navy ships and so on continue each year.  New amounts are appropriated for the changes to these contracts brought about by overruns and amendments to the contracts.

Senator Bob Dole pointed out in January of 1981, just before President Reagan took his oath of office, that there was little in the budget that Reagan could alter because so much of the revenue pie was already committed for entitlements and other mandated spending.  Little has changed regarding that equation 30+ years later.

Fifth Truth - Solutions

Right now we're facing a budget deficit of over $1 trillion dollars per year.  With a population of 312 million, that means the government is borrowing more than $3,200 for every person in the nation, over and above all of the income, excise and other taxes we pay into the Federal goverment.  Just for the next year.

Republicans want to solve the problem by reducing the size of government, reducing spending and at the same time, cutting taxes which they claim will actually increase revenues.  We'll let economists with Ph.D.s argue whether or not tax cuts on the wealthy actually result in higher tax revenues, as opposed to such things being functions of improvement in the economy itself.  The crux here is the notion that you can just cut spending to resolve the budget deficit.

Next time you hear a Republican say we can solve the budget deficit by cutting spending, ask them where specifically they propose to cut, and how much.  Watch them squirm for an answer.  None of them have a good one.

Democrats, on the other hand, want to keep spending at present levels, and raise taxes to pay for them.  Here's the problem with that notion.  The top 10% of income earners take in somewhere between 11% to 15% of the total income in the U.S.  On that amount they pay roughly 70% of the federal income taxes paid. already.  But even if we taxed most of their income at 100%, it wouldn't raise nearly enough money to balance the budget.

The bottom 90% earn less than $40,000 per year on average.  As such they pay very little, if any, in income taxes.  But they earn around 50% of the total income earned.  So with half of the total income not being taxed, you can't raise taxes on the wealthy only to balance the budget.  Either these lower-income bands have to pay some taxes, or else you can't solve the problem.

The real solution is a combination of raising taxes, in particular, capital gains taxes.  Investment managers who get to take their compensation in capital gains rather than as ordinary income need to have that favorable tax treatment stopped.  We need to make other changes to the tax system.  A few examples.  If I bought 10,000 shares of stock at $5 per share and it's now worth $20 per share, I'd owe tax on my gain when I sold those shares and that gain would be $10,000 x $15 = $150,000.  But I can avoid that tax by donating those shares to a charity and I get to deduct $200,000 as a charitable contribution.  So my charity is costing Uncle Sam 15% (higher starting in 2013) x $150,000 or $22,500.  I'd like to see legislation proposed to force people who donate stocks forced to liquidate the position as part of the donation process, and pay the capital gains tax that would have otherwise been avoided.  I'd like to see charitable contributions for those earning more than $250,000 limited.  Right now they could donate up to 50% of their AGI in one year.  I think it should be 50% of the first $250,000, but only 30% of any amount that can be donated in excess of 50% of $250,000.  They would be allowed to actually donate 50% of their total income, but the amount in excess of 50% of the first $250,000 would only be deductible at 30%.  The remaining 20% disallowed deduction would carry forward to be deducted in future years against future income.

There are a lot of other tweaks that could be done to push the equation in the right direction.  But just cutting spending or just raising taxes won't solve the problem.

Why Mitt Romney should release more of his tax returns

I can look at President Obama's 2011 income tax return online.  In fact, I have done so.  It's interesting.  It tells me he's saving for his retirement, even though he'll get a nice pension from being President.  He's saving to educate his children, so he's clearly a responsible parent.  He and his wife are very charitable, giving freely to a wide variety of worthwhile organizations.

I can also look at Governor Romney's 2010 income tax return online.  In fact, I have done so.  It is also interesting.  It tells me that he earned over $12 million in 2010 from capital gains.  In simpler terms, from selling investments at a profit.  It told me (after a lot of digging to find the details) that just over half of Romney's charitable contributions go to his church and a little less than half (in the form of stock rather than cash, a clever way to avoid capital gains taxes and maximize the tax break from charitable giving) went to a foundation in Boston that benefits families of childhood epilepsy patients at two area hospitals.

Both returns were extensively examined by the media.  But the media has been able to examine years and years worth of returns from President and Mrs. Obama.  Governor and Mrs. Romney have released one return, from 2010.  They released an estimate for 2011, but considering that their 2010 return was more than 200 pages long (roughly 4 times the size of the Obama's 2011 return), it's no surprise their return isn't done yet.  I've got 18 years of experience preparing income tax returns for money and I still found the Romney return extremely complicated.

Governor Romney insists there's nothing to hide in his prior year returns.  He may well be telling the truth.  But there are two major problems with his continued refusal to do something his own father did when he was running for the Presidency.

1.  He's handing a gigantic campaign issue to the Obama campaign to exploit.  Rather than forcing a focus on what Romney describes as President Obama's failures in addressing problems of the economy and unemployment, and his own proposals to solve those issues; Romney is allowing the Obama campaign to focus on this issue instead.

2.  Politics is all about perception.  Maybe he has nothing to hide in those prior year returns.  I don't know, I haven't seen them.  But given his refusal to release them leads people to think there's something in them that needs hiding.  As long as he allows this perception to continue, he will be considered guilty of hiding something even when he may well be innocent.

If Governor Romney can't find his copies of prior year returns, I'm happy to help.  I will be more than pleased to send him some copies of Form 4506, Request for Copy of Tax Return.  Heck, I'll even donate the fee for three years worth of returns if he doesn't have the cash handy.

When he was running for President in 2008, President Obama famously quoted Justice Lewis Brandeis who said "sunshine is the best disinfectant".  This is a case where Governor Romney needs to let the sun shine in. 

Truths About the Obama Years

First Truth:

Lies, damn lies and statistics.  That's the old adage, right?  Well, statistics tell us a very interesting truth about what's gone on since January of 2009.  154,521,000.  154,871,000.  Those represent the size of the "Civilian Labor Force Level" as calculated and tracked by the government's Bureau of Labor Statistics.  8.3% is the unemployment rate according to the BLS in both February of 2009 and February of 2012.  Sounds okay at first glance.  After all, the labor force did grow by 350,000 in those 3 years.

But wait a minute.  The population did grow during that period, right?  Actually it did.  From 305,980,358 in February of 2009 to 312,941,906 in February of 2012.  Simple math tells us that if you divide 154,871,000 by 305,980,358 you get 50.5%.  Do the same for 154,871 by 312,941,906 and you get 49.5%.  So the percentage of the population in the labor force has been reduced.  Meaning that roughly 3.12 million more people are actually unemployed than are reflected in the numbers that the Obama administration is reporting.

That's because they don't count people whose unemployment benefits have run out, and because they don't count people who've stopped looking for work.

Second Truth:

We were promised the most transparent administration in history.  We were promised that no one would be allowed to work for an agency that they had lobbied within the past two years.

The second promise was broken less than 48 hours after President Obama took the oath of office.  He nominated William Lynn, a former Raytheon lobbyist to be a Deputy Secretary of Defense and he nominated William V. Corr to be a Deputy Secretary of Health and Human Services in spite of his having lobbied for the Campaign for Tobacco-Free Kids.  Less than 2 days in office and he was already breaking campaign promises about lobbyists.  I'm not saying breaking promises makes him unique in politics.  I'm pointing out that he is no different than any other politician, you can tell he's lying when his lips are moving.

Transparent?  Want to discuss Solyndra?  No, we're tired of that tired subject.  Let's talk about Siga Technologies.  Never heard of it?  That's not surprising.  Controlling interest in Siga is owned by billionaire Ronald O. Perelman, a long-time Democratic Party donor.

Siga got a $443 million, "sole-source procurement" contract to provide a smallpox vaccine.  It got it because Obama administration officials interfered in the bidding process.  The per dose price was well above what the procurement specialist determined was a reasonable price.  A competing bidder was shut-out of the bidding process, even though the process mandated a small business be chosen.  The competitor was a small business, Siga was not.  The competitor complained and Siga's bid was disqualified.  So the Obama administration arranged for a new round of bids where Siga was the only one allowed to bid.

Perelman donated $50,000 to Obama's inauguration.  Think that had nothing to do with this bid rigging?  Think again.

Third and Final Truth for Today

When then Senator Obama was running for President he made yet another promise.  Any bill that landed on his desk for signature would remain there for five days.  "The public will have five days to look at it (the bill) online so they can see what's in it." 

The first  law signed by President Obama was the Lily Ledbetter Fair Pay Act of 2009.  He signed it on January 29, 2009.  It passed the House on January 27, 2009.  It spent less than 3 days on his desk.  He promised 5.