The Seeds are Always There

It was called a failure of imagination.
It was called a failure to connect the dots.

When you enter politics, do these things, part of the human condition (didn't we all grow up playing dots in Calculus class..) go by the wayside?

Back in 9/11, say on 9/10/2001.. or even back in the Last Millenium which seems so long ago, even the street numbers have been changed since then. There were seeds. There were transcripts from bin Laden and friends. Statements that could lead you to imagine using aircraft as weapons of mass destruction. There were dots, unconnected, between the foreign surveillance apparatus, and domestic criminal intelligence. Alas the data systems did not talk to each other. But even back in the 1980s people were talking about data matching. When you enter civil service, as with politics, does your ability to connect dots and use your imagination go by the wayside too?

Today's imagination/dot exercise is the federal budget. Mr Elmendorf, head of the Congressional Budget Office, testifying in front of the Super Committee. In case you aren't able to listen to cspan at work (I am so totally lucky!) it is rebroadcast today on cspan radio. The non-partisan CBO chief says that if we continue on with current policies - those Bush tax cuts, those emergency unemployment compensation benefits, that doc fix which allows Medicare doctors to have full reimbursement.. That we are looking at an unsustainable situation, with spending beyond control and at something like 190% of GDP in the decades to come.

20% to 40% to 100% to 190%, its starting to be like trillions to me, and become somewhat meaningless. As my federal friends would say, after enough shutdown "deadlines" come and go and the world goes on, you tend to get numb to these things.

So what kind of imagination and dot drawing is needed today, and how do we inspire our elected representatives and civil servants to partake in this exercise?

Mr Elmendorf says there is no free lunch. That should be Rule #1. Deal with Problems Now. OK those benefiting from those tax cuts, the word "temporary" means they are going to end. And how long can an emergency exist, to keep providing unemployment to the non-working class. Doc fix, or county timber payments. Things tend to last forever. Till they don't.

I like the word "nexus". If Medicare is going to continue, let it pay for itself. Maybe every doctor and every patient needs to get a "haircut" as they call it in the financial world. The next world for the US will of course be national health insurance, like every other civilized nation on the planet. So if your heart is in it, and you practice medicine not for the degrees on your wall and the vacations in Bora Bora, then you'll stick with it.

Rule #2. Lets think about Obama's pitch for a second stimulus, to fund construction workers, teachers, fire fighters. How the typical Democratic pitch for public sector job creation has a stimulating effect on the economy. Lets do the math. A $45K public sector job may generate $3,150 back to the state in the form of income tax (using a 7% effective marginal tax rate). And $9,900 back to the feds in the form of federal income tax (using a 22% effective marginal tax rate). So - for $45,000 worth of expenditure, you reap back $13,050 in terms of income tax. Whoa! Even a refrigerator is more efficient than that. And where does the $45,000 come from - the federal taxes of other working people.

Why is it hard to see that having survived Stimulus 1 (almost, nearly) that to invest in Stimulus 2 doesn't really pay off. Is the way to grow the economy really up to the venture capitalists and innovators in the world, and the government can't really do it all (answer left as an exercise to the reader - look up the efficiency of refrigerators). Does that really require a leap of imagination, or a dot exercise? Please send a dot template, with instructions, to your local elected representatives, and ask them to participate.