Rock n' Roll Doggie
Join Date: Apr 2001
Location: in the jungle
Local Time: 09:30 PM
Originally posted by Dreadsox
The New Security: Economic Growth and Justice in the 21st Century
Security, which used to mean freedom from violence, takes on a broader meaning in the twenty-first century. Citizens of this republic are today asking how to secure their livelihoods, their communities, their natural environment, and their children's futures. This expanded definition of security, now added to homeland security, is uppermost on people's minds. But traditional politics, locked into old ideological quarrels, is not responding coherently.
If we presume the era of the New Deal, Fair Deal, and Great Society was generally characterized by our national government creating a social safety net for the middle class and the elderly, a ladder of opportunity for the poor, and programs to stimulate rural development and urban renewal, that era ended with the election of Ronald Reagan in 1980. Government, long the instrument of growth and progress, became "the problem", and the then-hidden strategy of stimulating deficits as a means of reducing government—the "Stockman" strategy—has now become explicit Republican doctrine.
Now, government investment has been replaced by tax cuts, regulation has given way to market forces, and public social programs, especially for the poor, are replaced by "a thousand points of light" and "faith-based charities". Perhaps nothing characterizes the current age better than the wholesale demeaning of the word "liberal" and amnesia regarding the half-century of social progress it represents.
At the turn of this century, Republicans resort to laissez-faire, supply-side economics, and deregulated markets from the 1920s, and Democrats offer a variety of program initiatives focused primarily on the middle class. Republicans claim the country is a meritocracy but ignore the many examples of unequal opportunity. And they claim that markets always provide superior solutions but do not acknowledge all the ways in which markets can and do fail. Republicans enjoy the advantage of consistency. Their economic philosophy has changed little over the past century since powerful interests and financial elites captured the party's levers of power at the close of the Progressive Era and the age of Theodore Roosevelt.
In a time when government activism is out of favor, Democrats have resorted to a nebulous centrism—featuring more streetlights and school uniforms—that too readily devolves into a least-common-denominator outcome. Lacking in Democratic Party economics are central organizing principles or a conceptual framework that gives disparate policy initiatives coherence. In Churchillian terms, "this pudding has no theme".
Today, I suggest a set of organizing principles forming an economic framework meant to provide a theme for economic security in this new century. To do so, however, requires an understanding of the times in which we live; for they are not ordinary times or simply a linear continuation of twentieth-century life. These are revolutionary times. There is the revolution of globalized markets, the internationalization of finance and commerce. There is the information revolution that, like globalization, is further dividing the developed from the less developed world—in this case, a "digital divide". Together with the revolution in the sovereignty of nation-states leading to state failure and a revolution in the nature of conflict and violence, globalization and the information revolution are transforming the world of the twenty-first century.
Revolutionary times require revolutionary thinking about policies that will channel the forces of revolution to our benefit. Instead of devising new economic policies to turn these revolutions to our advantage, we are returning to an age of economic royalism. We have adopted a program of tax cuts for the extremely rich, some of whom qualify for Franklin Roosevelt's description of "malefactors of great wealth". Our current government's response to these revolutions is market radicalism, a form of economic extremism that deceptively uses these tax cuts to shred the social safety net in the name of fiscal stimulation. Our current laissez-faire policies, representing anti-family values, are destroying communities. And, predictably, we are seeing anti-democratic concentration of wealth at the top of the social order instead of the opportunity for wealth creation and economic security being made more openly available to all.
Against this backdrop of revolution, we must now create a new understanding of security in terms larger than defense against attack. In this light, let us consider the principles upon which a new national economics might be based to achieve this new understanding of security.
First, our national goal must be security through savings and investment so that every American has the chance to become an entrepreneur, own a home, or afford higher education. The Securing America Plan includes a Child Development Account, a Citizen Saves Account, a double Earned Income Tax Credit, and a child-care tax deduction patterned after the home mortgage deduction. This suggested package of initiatives, to replace the president's proposed tax cuts, shifts our national priorities from further accumulation of wealth at the top to supporting our working families in their struggle for economic security.
Second, to expand on this plan, let us, as a national priority, put our children first. Investment in our children, the mark of a civilized society, must become our highest national goal. Our children are the message we send to a future we will never see. Every American child should receive necessary health care, and every American child should receive the best education possible. Our children are our future, and America is wealthy enough to invest in its future.
Third, let's make our economic foundations secure. We must get both our public and private economic structures right. The key concepts are long-term investment and accountability. We must invest more in our most precious resource, our people. American corporations, the backbone of capitalism, must re-establish accountability and must adapt their own behavior to a new age. We must also consider changing our revenue base-including taxing unnecessary consumption and destructive behavior-and rewarding savings. And we must have a new social compact between employer companies and the communities in which their employees live to help provide greater security of livelihood.
Fourth, we must recapitalize our national assets. We should adopt goal-oriented national budget priorities. This means directing resources toward achieving world leadership in science and technology and recapitalizing our schools, universities, and laboratories. Likewise, it means excellence in education, with the goal of America becoming the university of the world. It means rebuilding a modern, productive manufacturing base. And it means an efficient national infrastructure, including, for example, the use of revenue-bond concepts to rebuild our transportation systems. True security requires a strong and productive nation.
Fifth, we must achieve energy security. Energy security must become a national goal equivalent to reaching the moon. We must become sufficiently energy independent that American lives are never sacrificed to obtain foreign oil, especially for wasteful consumption. Our national goals must be sustainability and increased use of renewable resources while reducing imported energy. Increased efficiency must also be a central national transportation standard. We will not be secure so long as we depend on undependable foreign oil supplies. And we can achieve that security while increasing environmental protection standards.
Sixth, we must restore the community as our political base. Think globally, act locally. In the interest of restoring the American republic, community governance must become a national economic and political goal. No American should be left behind. Innovative administration of national social programs—such as public education, welfare, and local security—must be encouraged at the neighborhood and community level. Restoring the principles of the republic will make our communities more secure.
Seventh, we must hold ourselves accountable to future generations by establishing a sense of public legacies. This accountability must be a new policy standard for all national programs. In the vast army of lobbyists seeking favors from our government, only a tiny platoon speaks for future generations. Instead, every public undertaking should respond to this question: How will this policy or program affect our children and their children? This standard must particularly apply to the management of our public resources. By accepting our moral duty to future generations, we will guarantee their security as well our own.
The hallmark of twenty-first century economics must be security: security against violence; security of livelihood; security of community; and security of our progeny. Let's consider how each of the proposals I have mentioned may contribute to that goal.
First, a plan for securing America through savings and investment. Four major initiatives could help make every American family—not just corporate executives, bankers, and lawyers, but also Wal-Mart employees and truck drivers—more secure and provide economic opportunity for every child. The first element of the Securing America plan is a Child Development Account, a down payment on economic security for a generation of Americans. Every child born in America would receive an account with an initial, tax-free government deposit of one thousand dollars. Parents and family then could continue to contribute to and help manage these funds. After reaching adulthood and receiving instruction in finance management, the owner of the account could use the accumulated amount for higher education, job training, home purchase, or to capitalize a small business.
The second element of the plan would make every American eligible for Securing America accounts in which our government would match every dollar deposited in this account up to a maximum amount of one thousand dollars. The total amount saved would likewise be available to start a business, buy a home, finance job training, or finance higher education.
The plan's third element would double the Earned Income Tax Credit to a maximum of $8,000 a year for any American working full time who has a dependent. We could also extend a portion of this benefit to households earning less than $50,000 per year. This benefit could be used to help finance participation in the Securing America account and thus be eligible for the government's matching funds.
The security-through-investment plan should also include treating the cost of child care under the tax laws in the same manner as the home mortgage deduction. Quality health care is increasingly a crucial element in the ability of parents to support their family's livelihood. This aspect of the Securing America plan would help make quality child care affordable for everyone so that no family would be forced to choose between earning income for their family and caring for their children.
Second, as an extension of this philosophy, we should put our children first. Even after twenty years of rhetoric about "family values", eleven million American children have no health care coverage, millions attend dilapidated schools, and almost twenty percent of our children are in poverty. Millions of children lack quality child care as their parents work, and ten million children and teens have no supervision after school. Almost three million children are abused and neglected, and thousands are murdered or commit suicide. Some family. Some values.
Instead, a rich nation can provide health care, high-quality education, protection and supervision for every child—and a civilized nation would do so. The federal government spends $8 per senior citizen for every $1 it spends on our children. We can, and we must, devote more resources directly to our children. I say we should make this our highest national priority, and I can suggest at least two ways—cancellation of unnecessary weapons systems and cancellation of tax cuts for the rich—to pay for this urgent priority. Our highest national priority should be immediate health-care coverage for all children, protection and supervision for every child, community-based day care and post-school supervision, and guaranteed access to quality pre-school for every child.
In addition to the proposed Child Development Account and the child-care tax deduction outlined above, we should also adopt a wage-supplement program for early childhood educators presently compensated at poverty-level wages. This would help attract high-quality, accredited teachers into the earliest education of our children.
Third, we should focus investment and accountability on securing public and private economic structures. It comes too late to hundreds of thousands of investors and employees who have lost billions of dollars to provide a lecture on the dangers of unregulated or laxly regulated markets. We all know the tragic stories from last year. As a senator, I opposed much of the unwarranted deregulation during the first frenzy in the early 1980s, for it was clear from any reading of American economic history what would happen. Unscrupulous executives and managers would take every advantage of curbed regulatory watchdogs that they could to inflate profits and earnings, cut accounting corners, plunder corporate treasuries, and launch their own gilded yachts. Stuff your pockets and sail off into the sunset was the watchword.
As before, however, following the long night of greed comes the dawn of responsibility. Now, we must restore progressive market regulation. Free markets are those in which you are free to make choices, not free to deceive and manipulate. Accounting firms must be forced once again to become public auditors, not collaborating "consultants". And the Securities and Exchange Commission must enforce this. Investment banks must provide investors honest assessments of stocks unconflicted by their own underwriting stakes. Boards of corporate directors must be required to do their jobs of overseeing management integrity. And managers must fulfill a mandate of loyalty and duty to their employees and the investing public. How will this be secured? Only by public regulation. Those who manage the private capitalistic system must recognize, once again, that the "freest" markets in the world—as, for example, in Russia—are often also the most corrupt.
But the other intersection of private capital and public regulation is our revenue system, the taxes we pay for the public services we enjoy and often demand. Our current administration says tax dollars belong to us and, therefore, should be returned to us. But our highways, our Social Security, our schools, our judicial system, public health system, and natural resources, all belong to us. And all require investment of tax dollars to maintain. Every revenue dollar returned to the nation's most wealthy is a dollar not invested in our common wealth and nation. No CEO who ran up large corporate debts and then returned revenues to shareholders rather than invest in his company's productivity would last long.
For most of the last century, our tax system has been based upon income. We must now consider, instead, progressively taxing consumption and destruction. Since the early 1980s, I have proposed a national debate about taxing consumption and thus encouraging greater savings. We cannot accumulate the capital we require for national rebuilding, restructuring, and renewal with our persistent low savings rates. While we consume our wealth, we depend on investment from overseas to finance our debt and even our defense, sending much of the profits from our own productivity abroad. After a few years of public surpluses and debt reduction, we are now back to deficits and massive borrowing from foreign investors and, perhaps most troublingly, our children.
We can increase savings, reduce borrowing, and increase our productivity modernization by fundamentally changing our tax structure. This is what tax reform ought to be about, not mindlessly reducing public revenues in a way that creates huge structural deficits, but rather, shifting what we tax in order to enhance economic growth. Income saved and productively invested should be encouraged.
And we should increase taxes on habits that hurt our country—pollution, wasteful energy uses, unnecessary plundering of our resources, and our throw-away culture. As six percent of the world's population, we consume more than a quarter of the world's energy and produce over a quarter of the world's pollution and trash. Both consumption taxes and environmental taxes would help restore a proper system of public values. Let's tax effluents and impose user fees on a graduated basis and dedicate the revenues to children's health.
Additionally, massive tax cuts as economic stimulus will not work so long as the rising cost of health benefits remains the greatest single impediment to job creation. The health care sector represents almost a fifth of our economy. That sector must be restructured so that prescription drugs are affordable, it is more efficient, its quality is high and services affordable, and more competition is introduced.
And a third intersection of public and private structures is the role of the corporate employer in the community. Especially since the dawn of the age of globalization, corporations have abandoned their role as community citizens in pursuit of the quickest profits, closing factories, abandoning workers, and decimating communities. We must instead insist on a new social compact between employer corporations and the communities in which they operate. This compact should include guarantees of early notification of intent to close or to relocate, paid relocation of at least some workers, individual employee training accounts for new jobs, and cooperation with community governments in alleviating the impact of relocation. Even in an age entranced by deregulation, certain minimum corporate citizenship should be demanded by a modern civil society.
So, the new economic security requires corporate accountability, corporate citizenship, and a tax system based on old-fashioned thrift.
Fourth, our choices about public investment should now be based recapitalizing our national assets and national goals rather than traditional pork-barrel, spoils-to-the-powerful, politics. The U.S. Commission on National Security/21st Century found that, as a matter of national security, America had to recapitalize its education system, especially scientific education, and its university and government laboratories. That is one clear goal. Rebuilding our public infrastructure, especially our transportation systems, should be another. Elevating the United States to the status of university of the world, where we educate not only American young people, but also future world leaders, is yet another.
The fundamental principle is that the goal of making America secure in the turbulent twenty-first century will require new priorities for public investment. A sound economic policy would establish those priorities. Scientific leadership, educational preeminence, a highly trained work force, a productive manufacturing base, and modern, efficient infrastructure, together with preeminent investment in our children—these should be the standards for public investment.
But, fifth, even given new public-private structures and new budget priorities, the United States will not be economically secure so long as we are energy dependent. We must have as a central national goal energy security, and it must be pursued with the same intensity and commitment of resources used to travel to the moon. This is a national challenge with no single solution. To meet it will require some increase in conventional energy production (more deep gas wells, for example); greater efficiency, especially the adoption of greater transportation efficiency standards; a graduated tax on carbon emissions; increased reliance on renewable energy sources, such as sun, wind, and water; and renewed research in alternatives, including hydrogen fuel cells. Properly led, the American people will adopt this project with the same patriotic vigor and national unity they have exhibited with every national challenge in our history.
Here, a new tax system can help. If we taxed oil imports, with rebates to those dependent on those supplies for home heating, and taxed carbon emissions, we would dramatically reduce dependence on unreliable supplies and drastically reduce possible loss of young American lives fighting for someone else's oil. But we should also shift our declining dependence on imports from the Persian Gulf to Russia. Not only would this boost the Russian economy, it would also liberate much of our foreign policy in the Middle East.
This topic has been debated enough in the past quarter-century for us to know what needs to be done. What is lacking, especially now, is political leadership and political will.
That leadership should be blunt and direct. Right now, America's energy policy is to rely on foreign oil supplies and to fight for them if they are threatened. We are using our military, the lives of our sons and daughters, as the guarantor of our wasteful life-style. That is the brutal fact. But our political leaders are not willing to remind the American people of this. This is our energy policy, and it is immoral.
Sixth, although it may seem more a political and social issue, I believe that restoration of community government should also be an economic matter. If, as I argue, the age of the national government as the instrument of progress and justice is, for the time being at least, over, and if, as I also argue, we need to restore the classical republican qualities of civic virtue and citizen duty, then reliance on community government is a means of assuring that our national social programs are administered more fairly and justly by American citizens themselves in their local communities.
There is little reason, including from the standpoint of efficiency, why federally funded and mandated programs of social assistance, environmental quality, public education, workplace safety, public health, and a wide range of other public undertakings cannot be administered by local government councils at least as well as remote federal bureaucracies. Too often Democrats have mistaken means for goals and insisted on federal program administration even as ordinary tax payers were losing confidence in national administrations. We can reverse public distrust and increase citizen involvement by making administration of many federal programs the responsibility of local communities. And we can and must do so without reduction of national standards or federal resources required to meet those standards.
Community security will become an increasingly important part of national security in the age of terrorism, and local citizens—traditional citizen-soldiers and first responders—will play a much more crucial role in homeland security than ever before. One way to achieve this goal would be to create a United for a Secure America (USA) Citizens Corps trained and equipped for auxiliary homeland security missions. With the globalization of economics and an increasing sense that events are out of our control, one way to ensure the immediate involvement of all our citizens is to increase both their rights and their responsibilities for self-government through their communities.
Seventh, establish the notion of public legacies. A new standard for our political economy must be the impact of today's policies on members of tomorrow's generations. We must leave them a healthy planet and a healthy economy; we are on course to do neither. Our consumer culture, with its emphasis on immediate gratification and the newest toy, represents a gigantic tax on future generations—a tax of pollution, congestion, waste, and depletion. Instead, all of our public, and hopefully much of our private, dealings should take into account how they will affect our children and generations of Americans to come.
Investing in the security of our public heritage not only benefits us, it is the right thing to do for our children. That is the central theme that permeates the twenty-first century economic framework proposed here.
Most Americans, as a matter of their personal finances, go to great length through their wills and estate planning to secure some kind of private legacy for their children. Why should not this same kind of forethought also go into our public legacies? We not only leave property and possessions to our children. We also leave a public legacy of our environment, our resources, our public safety, our national policies, and values. What good is a large estate if our heirs cannot breathe the air or drink the water?
Such a commitment to generational equity also necessitates addressing the public financing challenges that threaten the economic security of future generations. For years now we have known that the growing costs of the two largest government programs—Social Security and Medicare—will consume an ever-growing share of the budget, pushing out what is left for the important public investments I have described. To ensure that future retirees live with dignity and that we control huge projected deficits, changes that don't affect current retirees must be phased in. Those changes may include flexible retirement ages or indexing Social Security benefits to reflect longer life expectancies. But, unless we wish to push trillions of dollars of debt onto our children, change we must.
As a matter of national values and political economics, I am arguing here for inter-generational accountability, our commitment to future generations to leave behind a better world in every respect than the one that we inherited. Only with this kind of accountability will future generations also be as secure as we wish ourselves to be.
* * *
These ideas—an encompassing plan for savings and investment, especially investment in our children, accountable economic systems, goal-oriented budget priorities, energy security, community governance, and public legacies—are not economic policies in the traditional sense by any means. They are meant to stimulate a different way of thinking about the economy in the context of a new understanding of security. In the twenty-first century, security will mean much more than freedom from attack from other nations. It must include security from terrorist violence, security of livelihood, security of community, and security for our children and future generations.
The economic framework I am proposing here is not a Democratic framework. It is an American framework. It is not designed to rehearse stale old quarrels between right and left, but to stimulate a new way of thinking about our economic choices and priorities. But it may also become a blueprint for making the Democratic Party America's party. This framework is based on a commonsense notion—if we get our national goals right, reasonable people—imaginative, creative Americans—will figure out the right way to achieve them.
Most Americans, including myself, are tired of a host of special interests fighting it out for bigger pieces of a pie that is not growing—a fight carried out behind the closed doors of the White House and Congressional offices by people who have given and received vast amounts of special-interest campaign contributions.
Instead, let us establish our national goals and priorities for the twenty-first century. These priorities will guide our public choices and economic methods and will truly enable us to achieve security from violence, security of livelihood, security of community, and security for future generations.
University of California Los Angeles
The Anderson School
March 4, 2003
Thats a brilliant speech, in my opinion. Not much to find about foreign policy, but that is a thought model for foreign p. too, I would appreciate it.
"Especially since the dawn of the age of globalization, corporations have abandoned their role as community citizens in pursuit of the quickest profits, closing factories, abandoning workers, and decimating communities. We must instead insist on a new social compact between employer corporations and the communities in which they operate. This compact should include guarantees of early notification of intent to close or to relocate, paid relocation of at least some workers, individual employee training accounts for new jobs, and cooperation with community governments in alleviating the impact of relocation. Even in an age entranced by deregulation, certain minimum corporate citizenship should be demanded by a modern civil society."
One question I would ask him (if I could speak to Gary Hart): Do you think that deregulation could be reregulated too, in order to secure employment for American citizens? Do you think America should also insist on a new social compact considering terms of trade? That would be an important part of securing long-term stability and security, in my opinion.