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It’s Still “The Economy, Stupid!” Revisited: An Open Letter To The President

Clarence B. Jones Scholar in Residence,  Martin Luther King, Jr. Research and Education Institute  at Stanford University/Posted: 7/12/11 10:00 AM ET


During a three-day news cycle when Derek Jeter of the New York Yankees hits a home run, taking him into that special place of 3,000 hits in Major League Baseball, another earthquake occurring off the coast of Japan, several people traumatized by the acquittal of Casey Anthony in the death of her child, the last space flight of the Shuttle mission, the closing in Britain of Rupert Murdoch’s flagship newspaper after 168 years, the newly married Royals’ visit to Los Angeles, a substantial number of people throughout our nation remain fixated on our $14.3 trillion debt limit crisis.

This should tell you something about the importance of this issue and the necessity of raising it. Republicans seem to have forgotten that the debt ceiling has been raised 74 times since the presidency of John F. Kennedy.

I am not representative, but I am amazed at how many of my friends email or call me to comment on your negotiations with the Republican leadership on crafting a deal to reduce spending and raise revenues to enable an agreement to raise the debt ceiling.

A colleague of mine, whose company’s focus is on developing a microbicide that kills the HIV/AIDS virus on contact, sent me some ideas to consider for inclusion in an Open Letter to you that I had been considering over the past few days.

Although clearly a distance from my own customary ‘moral compass’ comfort zone, the present negotiations concerning the debt-ceiling portend potential horrific changes in our spending and debt reduction priorities. Accordingly, I believe it is the duty of everyone to ‘weigh-in,’ with every possible creative idea, no matter how unconventional.

Mr. President it is sobering to listen and watch you on television. The gray in your hair seems to become more pronounced each time you address the nation.

Yes, you are correct, the magnitude of the problem we face with our spending and revenue priorities demand that we “seize the time.” To paraphrase you, if not now when?

Because you astutely noted we should use this opportunity to do the biggest deal possible rather than, in the jargon of Washington-speak, “kick the can down the road. It is important to remember that:

  1. No one knows for sure what will happen if the U.S. defaults — but it can’t be a good thing.

  2. Some version of spending cuts, tax increases, new taxes, or alterations in the tax code seem to be the most advertised ‘long term’ variables. However, there may be other creative measures that can assist along the way.

  3. It will hurt Republicans less than Democrats if we default… or if we continue to ‘tread water’ on the issue.

  1. The word ‘Default’ during your administration is likely to be remembered much like ‘Read My Lips’ were for the 41st President.

You said there is a moral imperative that we try to craft the biggest deal possible. I agree. Therefore, I ask that you respectfully consider the following: If Not Now When? “Pull off the Band-Aid. Eat our peas.”

1. Ask for More — Over Time: Instead of seeking/settling for only $1 or $4 trillion… suggest $8 trillion, but with the first $2 trillion automatic at $500 Billion/6 Month intervals for 2 years and $1 trillion every 18 months thereafter with those later intervals tied to a reduction in total spending (2011 dollars) specifically for the entitlements of Medicare and Social Security in the amount of 1 percent per year. Raise the Social Security age of retirement by 1 percent per 6 months — capped at 67. Five years and treat early retirement by the same formula. Then, introduce optional reduction of Social Security payments by up to 15 percent in exchange for a new guarantee to offset daily living expenses to fixed amounts with either tax credits or supplementary payments after a person reaches 80.

2. Support a Balanced Budget Amendment to the Constitution by 2020: As a Constitutional Law scholar you know this will take time, requiring 2/3rds vote in the Senate and the House, and ratification by 3/4th of the States. Nevertheless, it will set a historically new pradymn of budgetary discipline for Congress.

3. Support a two-year moratorium… on all Patent and Trademark Fees: Offer tax credit dollar-for-dollar if any company invests in the development of any new patent or new trademarked product: This will spur development and job creation.

4. Declare that “Made In America” shall apply if as much as 60 percent of a product, including any sub-product manufacture, is actually produced in America. Offer a 5 percent tax credit or a 2 percent support subsidy for all expenses of Americans and American Businesses where they substantiate with an invoice that they purchased the product (not services) in the USA and that it was made in America. Job creation, yes…

5. Challenge All Members of Congress to substantiate that each of their districts should produce a minimum of 500 new/saved jobs every 90 days, (on a 70/30 basis).

6. Establish a Private Health Corps — that can advertise for people to join… at a nominal cost of $150/annually. It will provide no care services. Its only function is to work with doctors, hospitals, old age facilities and the like and to provide the manpower to convert medical records into computer/digital format. They should bill their services at half minimum wage… but pay minimum wage + 25 percent with the difference picked up nationally as a subsidy.

7. Establish Private GardenGreenClean (GGC) Corps. Privately funded — 50 State Groups of 20,000 per state who become responsible for keeping every roadway, every pathway, and every bordering garden or piece of green 100 percent clean, and manicured. Possible effect of Net = 1 Million jobs.

8. Establish A Private Border Security Corps. Illegal Immigration and cross border drug trafficking is hemorrhaging our economy in ways not publicly discussed and acknowledged. Authorize 100 private new companies to patrol, monitor and watch every inch of the American Homeland Border. Personnel at such companies should be subject to the same standards or security clearances as Border Patrol personnel. This additional man or woman power should also open and test every container. Let them Bill anyone and any company within 10 miles of the border at the rate of 20 percent of their costs with the balance paid by the countries looking to send their nationals to our country even if only for a visit.

9. Authorize Conversion to Solar Energy from ordinary electricity, locally, by paying up to 40 percent of the cost of any solar system large enough to run 20 percent of any homeowner’s needs. By requiring the conversions by 2020 we could build a home-grown industry of New Jobs.

10. Declare that the Ocean’s wave Energy and Tidal Change Energy must be harnessed to supply at least 10 percent of the Nations Present Coal Energy by 2020.

By Executive Order:

Living in America — Republicans constantly complain that they will resist taxes… especially on the rich. Mr. President you should be Executive Order, declare that Freedom to Live in the U.S. does not mean Living for Free. Everyone should pay a fee for enjoying everything that they can. It should apply to everyone who has a driver’s license or a Social Security card. It should be .01 percent of the first $25,000 and .1 of everything over 1 million with people who ordinarily do not pay taxes being required to register and pay the Living in America fee.

Mr. President, please don’t get trapped in the sophistry of this new kind of political discourse that uses words like “taxing the job creators” in substitute for corporate jet owners, hedge fund managers “carried interest” subsidies for oil companies.

You have managed to speak simply and clearly to our nation in words and with concepts that most everyone can understand. Getting past this debt limit issue will enable you to focus on Jobs. Jobs, Jobs, Jobs, Jobs, Jobs, Jobs, Jobs, Jobs.

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