The Proper Way to Balance the United States Budget

The Republicans and Democrats are competing to see who can do the best job of improving the fiscal status of the United States. They are both going about it the wrong way (as is the Tea Party also). It takes a lot more work, but if you really want to get the country's economy in good shape, you don't reduce the budget. The proper technique is to wipe out the budget altogether. Take it to zero, and then, item by item, decide what should go back into it. If our government had the commitment and stamina to set up a group to completely rebuild the budget from scratch, we would end up operating the country at a much lower financial level. The problem is that our politicians would never approve the process. They would have to justify each and every item in the budget, which would be a colossal job, but more important, it would expose the flimsy justification for many of the components of the existing budget. There are many parts of the federal budget that are there just because they pay for doing things the way we have done them for a long time in the past. As Shakespeare said, "The past is prologue." The only way they will find most (but not all) of the unjustified spending is to throw everything out, and start over. The nature of politics is that some waste will find its way back into the new budget because of the need to compromise and horsetrade between opposing views, but a huge amount of what we now spend will not be justifiable to either side. Assign three of the best minds from each party plus a couple of economics professors to a special committee, and the job will become doable, even if extremely difficult.

Walking Tightropes

In the Middle East, the fictional country of Ibrimia is on the edge of a revolution. Thirty-seven friends have managed to get the populace of the second largest city upset at the ruling regime. They have convinced the people that they could achieve many of their dreams if their country was a democracy. In this action they are copying the pattern of successful government changes elsewhere. The existing regime considers itself to be generous to a fault in providing free college education and healthcare, and in distributing significant oil revenues to all citizens.
If the activists force out the regime, the stability of oil income might end. While the majority of the population is in favor of democracy and new leadership, there is no agreement as to what alternate group should rule and with what agenda.
While the existing regime does not want to use military might against its own population, it feels that it offers the safest and most secure future for everyone.
What is the best course for each side to take in walking the conflict tightrope toward an improved future?

• Should the regime announce increased benefits and salary structures?
• Should the activists hold meetings to elect a "government-in-waiting" that will formulate and announce the people's goals following the ouster of the current regime?
• Should the regime offer big increases in employment on government-funded public works projects?
• Should the activists meet openly with government representatives to discuss possible power sharing and reforms of constitutional provisions?
• Should the regime offer term limits for itself and future governments?
• Should the activists attempt to split the country and gain international recognition for the part they control?
• Should the regime risk international condemnation by cutting off financial support and utilities to the part of the country it no longer controls?
• Should the activists invite outsiders to support their cause?
• Should the regime cancel the citizenship of the activists and offer citizenship to loyal immigrant workers instead?
• Should the activists seek an alliance of their part of the country with the neighboring large and stable country?
• Should the regime threaten the neighboring country with attack if it interferes in Ibrimia's internal affairs?
• Should representatives of both sides meet secretly to negotiate a mutually acceptable outcome?
• Should the regime ignore the uprising but ship its wealth overseas just in case the outcome isn't favorable?

If you were leading one side or the other, what would you do or recommend?

Middle East Solidarity and Fragmentation

The winds of change that are sweeping middle eastern countries may be just the beginning of turbulence with unknown consequences. It is relatively easy to get a population fired up against the status quo and an unpopular, authoritarian leader. During the process of such an attempted or successful overthrow of a government, the populace is essentially united because everyone wants the current situation to change. As soon as such a movement becomes successful, however, it becomes dangerous to all concerned, because unity will disappear as different segments of society push for their own agendas. This is the point at which power grabs and civil wars develop. The initial jubilation at overthrowing an authoritarian regime may be replaced by a lengthy period of groups jockeying for position and attempting to manipulate each other. External governments would be wise to be nonspecific in their gestures and declarations of support because they will not know nor be able to influence the final configuration of power centers for a long time to come. Enthusiastically backing a losing group may be at least as unwise as taking no public stance on the political upheaval process.

Hurrah for the Little Guy!

Borders Bookstores have filed for Chapter 11 bankruptcy. This is not something to celebrate, but it shows that the swinging pendulum of the business cycle is never stationary. When Borders began building their super-colossal stores, they forced a lot of small independent bookstores out of business. Many family-run operations with long histories found they could not compete with the giant. Now, the giant is learning that its business model has become obsolete, as book buyers have turned to online vendors and the remaining small independent bookstores. People seldom crowd bookstores anymore to browse through the shelves, and the lack of foot traffic has draped the albatross of outrageous overhead around the necks of megastore management. Small business flexibility in planning and ability to react to the marketplace are going to be the watchwords of the economy for the near and middle term future. Only a small business can redefine itself within a short period if necessary. The independent bookstores that are continuing to thrive do things like specializing in a few subject areas, offer products other than books that relate to key titles, sponsor community activities, and celebrate local author events. The huge bookstore chains have had to develop their online presence to survive. Borders didn't even do a good job of that, letting Amazon run the online business for them. Sooner or later, huge bookstores and other businesses with overhead structures that are not in proportion to their revenues will have to change or close. Just remember, in business there are two ways to generate profits: Bring in more sales; and reduce your costs for the same sales.

A Funny Thing Happened on the Way to the Super Bowl

News Items:
The Chicago Bears will play the Green Bay Packers in the NFC Championship football game.
President Obama begs for more civil discourse among politicians and others who disagree.

I have been a Chicago Bears fan ever since I moved to the Chicago area many years ago. I have accepted and enjoyed the traditional rivalry and buildups before battles between the Bears and the Packers, two teams that consider each other hereditary enemies. Nevertheless, I have to admit that I respect the Packers and their traditions. Over the years, a significant number of Bears players have moved on to the Packers, and the reverse is true also. On occasion, I even root for the Packers when they are playing someone other than the Bears.
In political, religious, and economic matters, why can't we respect the opposition even though we disagree with them? One of the differences and problems is that in football both sides play by the same rules. If one side tries to gain an advantage over the other, it has to work within the framework of those rules. In politics and economics there are too many opportunities for people to go outside the very minimal framework of rules to gain advantages by making false and misleading statements, inciting an emotional population, and branding someone as an enemy. Maybe we need more referees and fact-checkers in our national discourse and our media as well as in our sports. There are many reasons to stick to the facts when debating our future. Too many times we have trouble even sticking to the facts when we discuss our past.

Making Mistakes

In life as in writing mistakes are not necessarily bad things. In most decision situations, you should not be afraid of making a mistake. Mistakes generate experiences from which we learn. The same is true in writing, whether fiction or nonfiction. When you make a mistake in the way you try to communicate a lesson or a story, you have to use creativity to overcome and explain the situation in which you have found yourself. Most mistakes are reversible, and there are many paths to get from here to there. Midcourse corrections are not only acceptable but desirable, because they add precision to your final outcome or destination. In writing, the analog of midcourse corrections is the revision process. It is virtually impossible to author a significant book without going back and making revisions to the manuscript. In life we also have to compensate for our misstatements and misdeeds in order to achieve our goals (which may also require modification) or to get along with other people. Just remember to trust your inner moral compass and make your own mistakes rather than allow yourself to be misled by others. There are always people with little or no stake in your well-being who will try to move you off your intended course.

Once You've Been Poor

Whether you were poor as a child or suffered economic reversals as an adult, something happens to your basic instincts once you've been poor. No matter how much money you manage to make afterwards, you have to fight your inner self to spend major portions of it, because you are afraid of being poor again. Even Oprah, with all of her millions feels this way because of poverty as a child. I grew up in a single-parent situation with only meager alimony/child support family sustenance. I didn't consider myself poor because we lived in a city neighborhood where all of my friends had similar economic conditions. From the age of seven on, I had to fend for myself after school until my mother came home from work. In those days, apartment house neighbors watched out for you if you ran into problems. It was also a time when kids were happy with a basketball or a building block set for Christmas. They couldn't even conceive of the Christmas largesse of today. As soon as I could get a work permit, I started working jobs after school and during the summers, and eventually things got better. Nevertheless, my psyche had been marked in two ways by the experience of being poor. First, I knew that I could get along no matter what economic reversals I suffered, because I had been there before, and I knew the difference between a need and a want. Second, I knew that I would never be able to spend money as though it had no importance because there was always the sensitivity to losing it all. I still look for the best value whenever I shop. Some of my friends who haven't been there can't comprehend my attitude. I thoroughly recommend raising your children on lean rations, because it is far better to live your adult life based on past experiences of being poor than it is to have to learn poverty survival skills during your later years.