Thursday, September 15, 2011

Big or Bad Government?

This essay may be reproduced.
Reprinted in St. Petersbug Times, Sept. 23, 2022, Page 15A

Big or Bad Government?
Edward Renner, PhD

The grid-lock in Washington over the role of government confuses two separate issues: the size and the function of government.
They are not same. 

The important distinction between them is the practical ways they affect our lives, today. It is not their rhetorical role as political ideologies.

We live in an increasingly complex globalized world. In the last 40 years the population of the US has increased by 50 million people. In that short time span there has been more change in communication and commerce than in the previous 400 years. 

We need government standards to assure airline safety, food purity and drug effectiveness. We need federal oversight to prevent financial institutions from taking speculative risks with our money. 
One measure of the total size and scope of our modern global reality is our Gross Domestic Product (GDP).

By this measure our government is no larger now than when we were born. Government expense as a percentage of GDP has remained relatively constant for the past 60 years.

Contrary to what is often claimed, the huge annual budget deficit and accumulated federal debt is not evidence of "big" government. These are unpaid bills due to reduced levels of revenue and borrowed money to pay interest on borrowed money.

Throughout our entire history, with two exceptions, revenue has always been adjusted to keep pace with expenses. In 1981 and again in 2001 our government reduced taxes and essential government oversight of predatory corporate and Wall Street practices.  The economic toll of reducing the role of government started with Enron and culminated in the financial bailout and stimulus package required by the financial crisis of 2008.

The spike in spending after 2000 is compounded by the invasion of Iraq on false pretenses and the policy of paying for the war with borrowed money.

These outcomes are the result of "bad" government, not "big" government. They are mistakes of judgment that can and should be reversed. 

We are not going to fix "bad" government by reducing Federal spending relative to GDP. We need and deserve our government to grow in capacity with the increased size and complexity of living in a globalized world. 

We can fix "bad" government by taking the necessary steps to ensure that our government protects the general health, safety and well-being of its citizens. I want my government to contain predatory corporate and Wall Street practices. I want my government to speak the truth about the expanding global issues we face, and to engage in civil civic discussions to find practical solutions, not to grandstand political ideologies. 

Good government is our civic responsibility. We can start to reclaim good government by not confusing “bad” as being synonymous with “big.”

Size is not the problem. It is the quality.
_____________________
Professor Renner teaches in the Honors Program at the University of South Florida. This essay is based on his podcast series “Forums for a Future” at www.kerenner.com.

Friday, September 9, 2011

Time Travelers

We Are All Time Travelers Now
K. Edward Renner, PhD

Time travel has always captured our imagination.

 We know that when Scrooge saw the future that “was to be,” he changed how he lived in the present. 

But that was fiction. Back then, people could only live in the past tense. Quite literally, today was yesterday: A grandfather could put his hand on his grandson's shoulder and say "son, when I was your age…" and his advice would be relevant because his reality at that age was no different than his grandson's reality at that moment.

All that started to change with the advent of the Modern Era. Science and technology held out the promise that we could make today be whatever we wanted it to be. Over the next 500 years we were gradually freed from living in the past tense. 

Today is today. 

The crown jewel marking the end of the Modern Era was to complete to perfection living in the present tense. We have been living as if there was no tomorrow. 

But now – in the 21st Century -- the momentum of the change that carried us from living in the past tense to living in the present tense has propelled us into a new era. 

Suddenly, today is tomorrow. Now, unexpectedly and unprepared, we have been thrust into the future. Like Time Travelers, what we are now experiencing is incomprehensible based on what we have always believed. 

There are many examples of this time-warp. Population growth is perhaps the clearest illustration of the many transformations, although often imperceptible, that are invalidating our current way of life. 

When I was born in 1936 there were slightly more than 2 billion people on the planet, there is now nearly 7 billion. The planet can roughly hold 9 billion in terms of providing the food and energy we need and absorbing our waste.


In fact, if all 7 billion people now live as we do in the United States it would require five planets Earth to sustain us all. This cannot be. Those of us alive today need to find a solution before we sink the good ship earth with us still on it.  

But, population growth is just one example of how we are racing towards a limit, all within the span of a single lifetime: India has more honors students than America has students. For students in a four year technical degree program, half of what they learn in their first year will be outdated by their third year of study. 

Our human challenge today is to grasp the idea we must start living in the future tense. It is a whole new way of life. Truly, how we respond today will seal the fate of our own tomorrow. 

Unfortunately, a fictional ghost of what “is to be” cannot magically take us to where we can clearly see our own future. Nor, as in science fiction, can we be beamed momentarily into the future. 

The true legacy of the science and technology of the Modern Era are not the smart phones and all the other things we have made. Rather, it is all of the things we now know. 

Fortunately, we are not trapped in the necessity of living in the past tense like our early ancestors. Like the time travelers from literature, we can actually determine our own future based on forehand knowledge of “what is to be.”

That fictional Scrooge-like glimpse into the future is the supreme gift of the knowledge created by the Modern Era. 

What we will actually do with this knowledge will be the final judgment of the great human experiment on earth:  Can human intelligence grasp the notion, as Scrooge came to understand, that today is tomorrow?

At this time in history, learning how to live in a knowledge-based future tense is our purpose. If we so choose, we can let go of our ideological-based present tense and become time travelers. It is a whole new way of thinking. 

What an exciting time to be alive.­­­­­­­­­­­­­­­­­­­
_______________________
Professor Renner teaches in the Honors Program at the University of South Florida. This essay is based on his podcast series “Forums for a Future” at www.kerenner.com.

Friday, September 2, 2011

Speaking the Truth About the National Debt

Reprinted from the St. Petersburg Times, Thursday, August 4, 2011, Page A13.
Speaking the Truth and the National Debt

K. Edward Renner, PhD [1]

In order to make sense of the $14 trillion national debt we should not be focusing on the amount of the debt, but rather the wisdom of incurring it and the capacity to afford it.

 The appropriate statistic for doing this is the ratio of debt to wealth.

Over the history of the United States this ratio has varied considerably depending on the external circumstances we faced as a nation. Before 1981 every peak in the level of our national debt ratio was triggered by a major external event, from the American Revolution through the Depression to World War II.

The wisdom of incurring these debts has been generally accepted. 

Each time, after the external situation was over, the nation significantly reduced the relative level of debt, not by eliminating it, but by increasing our wealth so that it became affordable. 

During and after World War II everyone pitched in to help support the war effort through savings bonds, rationing, recycling and a frugal lifestyle; and, later, through endorsing a progressive income tax in which the highest marginal rate remained around 80-90%. The revenue built our national infrastructure, generated jobs, created Medicare and a widely shared level of middle class prosperity. 

By 1981 our debt to wealth ratio returned to roughly what it was at the time of the American Revolution, even in the face of the “Cold War.” 

However, in 1981 we started a new uncharted economic policy based on the theory that the size and scope of the post-WWII involvement in our economy by government was bad for the nation and for the American people. 

The highest marginal tax rate was dramatically lowered under the assumption that providing additional income for the wealthiest, and the deregulation of business, would stimulate even greater economic growth. 

The theory was that the benefits would trickle down to the workers below and that there would not be any need to cut government social programs because the additional wealth would provide the revenue to replace that lost through the reduction in taxes.

We now know that the theory was wrong. 

The relative reduction in revenue resulted in a rapidly increasing national debt ratio. The money never trickled down, even though productivity went up due to new technologies and globalization. The economic gains were not shared, the wealthy got wealthier while the relative debt rose.

The end of the Cold War reduced the need for defense spending, and a modest increase in the marginal tax rate added additional revenue. This provided a brief period of national prosperity and a decline in the relative national debt from 1996 to 2000. 

Then, this changed again. In 2000 we returned to the economic policies of 1981 of additional tax cuts for the wealthy, and further deregulation of corporate economic activities by the government, with the same results as before —  a huge increase in the national debt to wealth ratio. 

But, the difficulty did not stop with the large debt resulting from the tax cuts and the financial bailout of Wall Street. It was compounded by invading Iraq and Afghanistan. We were not asked by government, as we were in World War II, to pay more taxes, ration gasoline and to reduce our excesses. Instead, we were told to go shopping!

Only now can we see the true price of those wars. They alone are a $3 trillion contribution to the national debt. 

Yet, the current solutions enacted in Washington are more severe forms of the theory that produced the problem in the first place. They pass the costs of reducing the debt on to the average person rather than to those responsible for the problem. 

We can either renege on a 70 year old commitment by the government to our citizens to protect their retirement, health and general welfare; or, we can, once again, make our debt affordable by increasing the highest marginal tax rate, end the tax cuts for the wealthy, restore government taxation and regulation of corporate economic practices, put an end to the two wars, and to start paying for them now. 

Our choices are that simple.


[1] Professor Renner may be reached at kerenner@ usf.edu. The podcast series on which this essay is based is also available through the University of South Florida at: