What Would a Bipartisan “Grand Deal” Look Like?
This political gridlock cannot last forever…can it? Could a “grand deal” really be made in our lifetimes?
OK, so the Federal Government is currently gridlocked on many issues, chiefly entitlement (Social Security and Medicare) and Global Warming Issues (Coal, Carbon-taxes, subsidies for renewables). The former has a big effect on our National Debt going forward, and the latter a big effect on our future quality of life. Republicans are currently in denial about Global Warming, and seem to have given up on balanced budgets, but Republicans are now the minority party, and a more moderate breed of Republican 0may emerge. Meanwhile, Joe Biden may be ushering in a more moderate breed of Democrat, ready to unify the country while diluting the voice of Bernie Sanders Social Democrats. Is this a historic opportunity for a “Grand Deal”?
As mentioned in earlier articles, if budget deficits and greenhouse gases are our two biggest problems, then budget deficits would seem the harder to solve, as they are massive. In fact, the recent spate of “printing money” by the Fed, in response to the Covid-19 virus (and frankly, an effort to make Donald Trump look good by goosing the stock market) has pushed the deficit into almost hopeless territory. For now, the stock markets are up (with all the easy money), but this cannot last. However, Trump’s disregard for budget deficits was more or less shared by Bernie Sanders. Economic experts predict that too much “easy money” without technological progress will eventually lead to another economic collapse on the order of 2008, if not inflation. If so, recessions are not always a bad thing, provided they are not devastating. They are often where bad tech goes to die and good tech is born (think World War II, right after the depression, when new and better aircraft, ships, weaponry, and computers were created out of necessity, and with budget deficits that were eventually paid off by a robust economy). A carbonless future may be kind of joined at the hip of budget balancing then, in the sense that new and better tech invented may be the chance to someday pay off the debt, ala the WW II generation.
A “Grand Deal” between Dems and Repubs may be somewhat distasteful to both parties, but necessary for the good of future generations. Like her or not, baby boomers kind of shudder when they hear Greta Thunberg’s pleas to not saddle her generation with pollution and debt. We can’t help but feel like we’ve just ended a big party and are now asking her generation to clean up. But enough about the reasons why we need a Grand Deal, now onto the details (and the Devil is always in the details).
First, a “Green New Deal”, which would be initially costly, but pay dividends over time. Most rational people believe in a carbon tax, and the “three bears” logic sets it at about $50/ton. If you look at graphs projecting the effectiveness of carbon taxes, $25/ton definitely does not get it done fast enough, while $75/ton is in the diminishing returns area (it helps a bit more than $50/ton, but not enough to offset the “regressive” problem, in that carbon taxes tend to disproportionally effect those that can least afford them). The next question is what to do with the carbon tax money. If you’ve read my book, you may know that I’m a kind of Bill Gates adherent, and that a 2050 goal of 50% renewables, 25% carbon capture natural gas, and 25% nuclear, with 2/3 running on electricity, 1/3 running directly on “green gas” (hydrogen and biogas) is desirable. The carbon tax itself makes coal burning impractical, while the tax raises electricity prices about $.05/kwh, and gasoline about $0.75/gal, thereby creating incentives to drive electric cars (due to their greater fuel efficiency). One side of the debate is whether to use the carbon tax funds to nurture emerging tech to make all this possible (chiefly better batteries, HVDC lines, biofuel, a viable hydrogen industry, and possibly carbon capture technology) or to use some of the money to help retire the deficit. Honestly, I believe that the entire tax may be necessary to subsidize clean emerging technology, in hopes that this tech will someday create an economic boom, thereby helping retire the deficit. Roberts, 2019
Honestly, the “balanced budget” side is more difficult, and much of it goes through entitlement and high medical costs, if not reducing “corporate welfare” and bloated defense budgets. In this sense, I believe budget balancing to be less politically possible. Remember that Obama’s “Simpson-Bowles” budget balancing committee in 2012 was a bipartisan group that came up with some very sensible ideas, before getting torpedoed by the Paul Ryan group (possibly so that Obama wouldn’t get credit). This time, the Democrats may need the Presidency and both houses to pull this off, and the Democratic moderates may need to stand up to the Bernie wing to get the necessary Republican votes to achieve a majority. Chiefly, entitlement reform would have to be front and center. It would possibly include an indexed Social Security retirement age that would adjust upward for longer life spans (in other words, if people start living longer as they are now, the retirement age may be adjusted upward from about 66 years to 68 years, making people work and save longer, but saving the Country from crippling debt). Next, all income would be subject to the social security tax (currently we are not taxed on income over $130,000/year), which is the ultimate “tax on the rich”. These actions alone go a long ways towards solving the long term budget deficit. (Committee for a Responsible Federal Budget, 2015)
But, Democrats should not give that so easily, as they will want equitable cuts to ag and oil subsidies, and other corporate welfare, plus a leaner, meaner defense budget with better cost oversights. Yes, that is complex, but we all know it needs to be done, and while they’re doing this, they need to have an eye towards energy efficiency (one of the reasons the Germans lost WW II is because their awesome tanks got terrible gas mileage, haha). This would be a great opportunity to overhaul the “Military Industrial Complex” from old tech to new, with smarter defensive weapons (anti-missile systems, possibly space-based), better planes and subs, less ships (very vulnerable to modern missiles).
Then, this leads us to the biggest bugaboo, medical care. I’m for a “basic Medicare option”, which would raise the Medicare tax from 1.45% to no more than 2.5%, and provide an option for basic care (covering all exams, vaccinations, births, basic drugs, necessary surgeries) with reasonable copays while herding exotic drugs and surgeries into clinical trial (free, because you’re a guinea pig). This would mean that the system wouldn’t have to pay for new livers for drug addicts or cosmetic surgeries (you’d have to pay out of pocket or GoFundMe for that). There would be liability limiters for medical providers (to keep costs down), a quicker path to generic for pharmaceuticals, and basic care centers everywhere (possibly of the Walmart and Costco variety). There may also be a $200k cap, which might force people to buy additional major medical, just like seniors do now (regrettable, but we do have to control costs). The premise would be that your taxes are going up, but your medical care cost is going down (because of the single payer, large market effect). Those that already have insurance through their employer would have to get a voucher to offset their private insurance cost (to justify the increased tax). The presumed savings of this new Medicare system might be a band-aid on rising medical costs, until the day when a magic pill is invented, that allows everyone to live to 100 (in which case the new Social Security index will raise our eligibility age to 80?) The American Prospect
I might finish by throwing in those biggest of political bombshells, abortion and gun control. Perhaps in a nod to compromise, practicality, and religious sensibilities, we set a 2 month limit on abortions with exception for rape/incest/doctor’s order for health of mother, with no federal funding, and then take assault weapons (with 100 round magazines) away from everyone but military and police.
