In the current fiscal cliff negotiations, the most important items are the impact on the US economy, on US full-time job creation, on the US Debt, and on US National Security.
Thus, the country needs a wise Grand Bargain immediately. That can't be done because the negotiators, being nearly all men, are too stubborn.....more concerned about winning than doing what is best for the country.
Since we can't get a wise Grand Bargain now, then it is critical that the Sequester remains in place.
The country has over $16 trillion of Debt. But in real economic terms, it is much higher than that because the huge pension and other post-retirement health care benefit and other liabilities related to US government employees, and particularly so related to US military veterans, are not computed by the US Government in the same manner as they are by private companies.
And by using much too rosy US Real GDP annual average growth rate projections in the next ten years, the US Government is substantially understating the projected level of US Debt ten years out.
Given the huge amount of US Debt, which negatively impacts US National Security, it is clear that there should be steps taken to dramatically reduce it.
One of the most important steps to take as soon as possible is to make Chuck Hagel US Secretary of Defense.
In addition to his broad US defense and foreign affairs experience, Hagel was also an infantry soldier in Vietnam. Thus he has observed first-hand the military from the lower ranks. Having served in the US Army also at the bottom levels, I think you get a much better view of how to properly fix the US Army, than from above as a high-level, isolated General, spending all your time with other Generals and with US Defense Contractors.
And unlike nearly anyone else, Hagel won't knuckle under to unreasonable demands made by the Pentagon Brass.
So, I think that Hagel could do a great job of strengthening US National Security by wisely and substantially reducing US Defense Spending, and doing so without harming the US Defense mission by one iota.
And taking wise steps to reduce pensions and other post-retirement health care benefits and other benefits are just one of many steps needed.
In addition, many military bases are not needed.
And US Defense Contractor Spending must be dramatically cut.
Also, you don't need so many military support personnel.
And you don't need so many high-level military officers.
And the many extravagant economic benefits received by high-level military officers need to be sharply curtailed.
And lastly, we should depart from Afghanistan more quickly than is now planned.
Also, there needs to be a dramatic cut in non-defense spending, not just a dramatic reduction in pension and other post-retirement health care and other benefits, but also a substantial reduction in regular health care insurance costs, and also a significant reduction in the number of US government employees. There needs to be outside independent studies performed, which focus on what the number of US government personnel are needed to successfully fulfill the mission of each US government sub-section.
And the widely used US Government employee practice of "Use it or Lose it".....all of your annual budget, that is..... must be stopped.
And on the non-discretionary front, there should be dramatic reductions in Medicare Costs. All you have to do is to view the detail of charges in a hospital bill to realize that there is something awful that has happened to the country's health care system.
And you have to start with the hospital that has these unbelievable charges.
Non-profit Hospitals make a substantial amount of profit. This isn't right.....not even close to being right.
And starting in 2014, when the Affordable Care Act totally kicks in, these Non-profit Hospitals will be making even substantially more profit. And when I do the math, their average After-tax Profit Margin as a Percentage of Revenues will be higher than that of nearly half of the 30 Dow Industrial Companies. This is crazy.
These excessive profits of Non-profit Hospitals need to be used to reduce patient service fees charged, and the US Government should be a major economic beneficiary here.
And many of these Non-profit Hospitals give out enormous pensions, which need to be dramatically reduced. The ultimate payers of these extravagant pensions are the patients given unbelievably high hospital bills.
So that's my case for why it is so important to keep the Sequester going now, and for the US government to take steps to wisely reduce spending.
OK, so what about the rest of the US fiscal cliff negotiations.
I think there is too much focus on the income threshold.....$250,000 or $450,000 or $550,000. To get a deal done quickly, I would just use $550,000 for now. When the Grand Bargain is debated later on, you still have a chance to bring this $550,000 income threshold down some.
There needs to be some middle ground on the estate tax. The Clinton exemption amount is too low and the Clinton tax rate is too high.
And the Bush exemption is too high and the Bush tax rate is too low.
Just pick something somewhere in between for now to just close this deal. It can be debated further later when the Grand Bargain is negotiated.
You have to have Unemployment Benefits extended. So the US government continually refuses to stimulate the US economy which would change the status of many of the unemployed to employed status, and it's the unemployed's fault for being unemployed? Give me a break! What's going on here on this issue is a morale outrage.
And why is it that doctors shouldn't also sacrifice for the good of the country? Why not just give Docs something like half of a Doc-fix, instead of a whole fix. What kind of a country in a desperate financial condition gives already financially well-heeled doctors a 100% fix on Medicare fees, but at the same time, is quick to reduce Medicare benefits of the lower and middle income elderly?
And the Alternative Minimum Tax should be fairly patched. The US Government incompetently set this up in the first place. But then, for the good of the country, why not give a permanent patch which is below 100%? Everyone should be contributing to help solving the complete financial mess the country is in, even including the taxpayers unfortunately hit by the Alternative Minimum Tax. I can think of so many other US tax items which are unfair. Why just single out the Alternative Minimum Tax?
