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.

  4. 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…