Tough Choices Highlight Need to Amend Constitution

March 29, 2009

The linked editorial by Deborah Weinstein, executive director of the Coalition on Human Needs, speaks to the need to make tough choices to fund the intiatives proposed by President Obama in his budget.  In a particularly cynical mood, I wrote the following response:

This may be the fatal flaw in democracy – the inability to make tough choices. Like a family with four children that is run democratically, the end result is inevitably a bankrupt household loaded with toys, run by truant, morbidly obese children, lying around in front of the TV amid the clutter of empty pop cans, potato chip bags and candy wrappers.

How can any tough choices ever be made when we are governed by people interested above all else in re-election who will tell us what we want to hear – that we can have it all while reducing taxes further with each election cycle?

I see absolutely no hope that these problems will ever be addressed.

What hope can we have that any of our problems will be addressed when one party tells us that we can have it all, to be paid for later, while the other party tells us that we can cut taxes more and more without consequence?  Both parties say they want fiscal responsibility, but the time is never right.  There’s always some crisis that must be dealt with first. 

Then I remembered that similar problems are dealt with successfully all the time at the state level.  The arguments about spending and taxes are virtually the same, yet compromise is ultimately reached and budgets are balanced.  Why?  Because it’s mandated by the state constitutions.

In the 222 years since the Constitutional Convention in Philadelphia in 1787, the constitution has been amended eighteen times to add 27 amendments.  Only one amendment, the 16th, ratified 96 years ago in 1913, dealt with the economy and the financing of our federal government.  The 16th amendment established the income tax, addressing the fears of many that the United States would soon become insolvent without it.  Until that time, all federal revenue was generated from tariffs on imports and from some small “excise taxes” that were nothing more than incomes taxes disguised to skirt questions about their constitutionality. 

Just imagine what our nation’s leaders in 1913, concerned about insolvency then, when our national debt was about $2.6 billion, would think if they could see the state of our nation’s finances today.  Today, our national debt is 5,000 times higher.  Even adjusted for inflation and population growth, the per capita share of the national debt burden is about 77 times higher.  In 1913, we had no trade deficit, while in 2008 our trade deficit was $677 billion.  In 1913 we were self-sufficient in energy resources while today we import 75% of our energy needs.   I think it’s safe to say that the framers of our constitution and even our nation’s leaders in 1913 who were so concerned about the potential for insolvency would be absolutely stunned and aghast at what has become of our country, now bankrupt in every sense of the word. 

Because of the political consequences associated with making tough choices, none are ever made.  There is talk in Washington of a complete overhaul of regulation of our financial industry.  But the problems go much deeper and the need for reform extends much further.  Nothing less than constitutional amendments are needed if we are to have any hope of a return to fiscal responsibility and any hope of dealing with mortal threats to the continued viability of our nation, including the trade deficit, energy policy and overpopulation. 

If our philosophical differences prevent us from reaching agreement on how to balance the budget, let’s begin by agreeing that it needs to be done and mandate it through an amendment to the constitution.  If we can’t agree on how long to wait for our free trade policy to eventually restore a balance, we can agree that an enormous, perpetual trade deficit is unsustainable and amend the constitution to require a balance.  If we can’t muster up the courage to utter even a peep of concern about the potential for population growth to transform us into another India, then let’s amend the constitution to at least force a discussion on where we’re going and just high high we’re willing to let our population rise. 

The framers of our constitution could never even begin to imagine the breadth and depth of the problems that now beset us.  Otherwise, they would surely have included mandates to force us to deal with them.  But we can see the problems clearly.  The question is, do we have the courage to act, as our forefathers surely would have if they had a crystal ball, or is this also too tough a choice for us to face?

Energy Consumption Per Capita: Are Americans Wasteful?

February 26, 2009

Here’s an example of how public policy can go awry when the relationships between population density, per capita consumption and employment are not clearly understood.  Click the above link to see a chart of energy consumption per capita for seven different countries.  Recently, I’ve seen something similar posted on various blogs that deal with issues like energy policy and global warming, and in each case the conclusion of the author has been the same – that since Americans use far more energy per capita than other wealthy nations like Germany, Japan and the U.K., then Americans are wasteful and great oil savings (and reductions in carbon emissions) could be realized by becoming as efficient as those nations at the right hand side of the scale. 

At first blush, it seems like a reasonable conclusion, doesn’t it?  After all, the image that immediately comes to mind regarding the relatively higher energy consumption in America is gas-guzzling SUVs, right?  And the image that comes to mind regarding Japan is fuel-efficient cars like the Toyota Prius.  There is some smattering of truth there, although no one thinks about the fact that there are far more Priuses on the road in the U.S. than there are in Japan. 

More importantly, the conclusion that America is wasteful and great energy savings could be realized is erroneous because population density and its relationship to per capita consumption, together with the economic consequences of that relationship,  haven’t been taken into consideration.  In the cases of Japan, Germany and the U.K., their per capita energy consumption is low not because they are more efficient than the U.S. but because their extreme population densities have driven down per capita consumption of nearly everything.  (Japan is ten times as densely populated as the U.S. while Germany and the U.K. are about seven times more densely populated.  Also, notice that, with the exception of the tiny city-state of Luxembourg, the left side of the scale includes the sparsely populated nations of Canada and Australia.) 

For example, consider the effect upon the per capita consumption of dwelling space in Japan.  It’s only 30% of that in the U.S., not because the Japanese like living in tiny homes, but because there is no room for anything larger.  So the energy used to light, heat and air condition their homes, in per capita terms, is only 30% of that in the U.S. as well.  Now, that may sound like a good thing from an environmental perspective until you consider the economic ramifications.

Not only is their per capita energy consumption in their homes reduced to 30% of the U.S., but so too is the per capita employment in all industries associated with building, furnishing and maintaining their homes.  Making matters worse, their per capita consumption of nearly everything, along with their per capita employment in those industries, with the exception of food and clothing, is similarly affected to a greater or lesser extent by their extreme over-crowding.  This leaves them with an enormous glut of labor that can only be gainfully employed by manufacturing products for export.  In essence, this over-crowding and low per capita consumption transform them into a parasitic economy, feeding on the markets and manufacturing jobs of nations like the U.S.

So the only way to reduce per capita energy consumption in the U.S. to a Japan-like level is to cut our overall per capita consumption of everything to their level.  The problem is that this would also cut per capita employment, just like in Japan, but without any other U.S. to turn to for employment of the resulting labor glut.  This would drive unemployment through the roof and start a world-wide decline of living standards. 

So let’s back up and consider the real problem, which is not the per capita consumption of energy but the total, world-wide consumption of energy.  If we want to reduce it, the correct approach is not to drive it down in the U.S., a move that would send global unemployment soaring, along with poverty around the world, but to dramatically reduce the population in overpopulated nations like Japan, Germany, the U.K., China, Korea and so many other places.  Yes, this would actually allow their per capita consumption of everything to rise, but the net effect would be a significant reduction in total consumption while allowing living standards to rise around the world.   

It’s imperative that we understand the economic consequences of overpopulation if we want to avoid a move toward well-intentioned policies that make a complete mess of the global economy.

Oil and Gas Industry Commercial: Less Than Reassuring

October 20, 2008

I’m sure you’ve all seen the commercials that have been running frequently in prime time for the last few months, the ones with the lady striding confidently across a chart of America as she proudly boasts that “we have enough oil and gas right here in America to heat 160 million homes and power 60 million cars for the next 60 years!”  Is it just me, or do you also find this to be less than reassuring?  We already have 160 million homes, and it’s growing by two million homes per year.  And we have about 150 million cars hitting the road every day, not 60 million.  So now that oil and gas will only last maybe 30 years, not 60.  Then what?  It’s not like other global reserves aren’t being gobbled up at the same rate. 

This country needs to get serious real fast about planning our energy future, and no plan can possibly succeed if it doesn’t begin with stabilizing and then reducing our population. 

Thank you, oil and gas industry, for making it crystal clear just how dire our situation is.  By the way, you’ll soon need to change the figure in your commercial to “… we have enough to last 59 years.”