Friday, April 9, 2010

A response to a comment.

So, I was responding to a comment sent to me from a friend of another friend regarding the political system and I am a little proud of how this came out so here you go.

From "BRET"

-Politicians are the only people in the world who create problems and then campaign against them...
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes? You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority.
They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party..

My Response -

Deficits exist when the amount of money coming into the municipality, state or federal system is smaller than the money going out of the system to programs and contracts. Most of the time this translates into debt but, if you look at most country wide city and counties there exist state laws that say that they cannot legally have a deficit. The main reason the state itself is operating at a deficit currently is because the housing market crashed and the majority of state money was coming in from housing sales and taxes. Federally there is constantly a deficit and national debt because the federal system gives huge funds to the states who, in turn, fund municipal programs. No one really wants deficit, but that is how the system has perpetuated. If you have a suggestion of how to operate a government without a deficit ever occurring, I would love to hear it.

Inflation itself is a naturally occurring market force that occurs when the general level of prices of goods and services increases compared to the currency. In other words, your money has less buying power. Now, while the FEC and the Federal government can sometimes directly affect the level of inflation, as a keynesian economist I believe that inflation is the result of pressures in the economy expressing themselves in prices. Like demand-pull, cost-push and built-in inflation. Most of these actually are the result of consumer spending, level of supply of products and the rise of labor costs. Most directly unrelated to the actual elected officials.

To be completely honest with you, I HAVE written some california tax code so I kinda have to take myself out of that aspect of the conversation.

When it comes to special interest groups I believe you are forgetting the fact that, as a result of term limits we have instituted a system of campaigners, not legislators. What I mean by this is that while elected officials SHOULD be worried about trying to fix the problems of their domain they end up more concerned with having to win their job again and where they will head after their second or fourth term is up. This is REALLY where lobbyists come in. The donations do help with electeds' campaigns but the flipside is that if you go against a powerful lobby or lobby group without an equivalent backer with equivalent funds then that group can create what is known as an independent expenditure - a political group that has little to no spending limits, to destroy you politically. This was one of the concerns that is alluded to in Federalist Paper No. 10 when Madison talked about how there is a need to guard against "factions." It is a systemic problem that has existed pretty much since the inception of the country.

And as for "politicians are the only people in the world who create problems and then campaign against them..." I point you to OPEC's practice in the 1970's regarding the oil supply or, more recently, Blackwater - whose job it is to try and provide security in Iraq funding various terrorist groups to bump up the violence and, therefore, their funding.

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