Signs of Harmony from Political Vibrations

11/20/2005

Paul Munnis

As a direct result of the confrontation between Democrats and Republicans over the subjects of Iraq withdrawal and POW Torture, plans to settle these issues are making progress in spite of the negativity and actions of some members of our Congress.

Iraq is being confronted with the reality of an eventual pullout even as they are asked what conditions they seek for withdrawal.

In the Pentagon, plans for an orderly withdrawal are being made.

Suddenly Senator Murtha is not the enemy within but a man who is speaking statesman-like common-sense.

Indeed, we must leave Iraq sooner or later, the issue is not IF, but is WHEN; and WHAT goals do we seek to accomplish in concert with the people of Iraq prior to our leaving. Answering the question of WHAT dictates answers to the matter of WHEN do we leave.

Such a plan is what Democrats have been asking for and we are pleased to see forward movement on the matters of Iraqi withdrawal. It is too bad that bi-partisanship has not come forward until the Bush Administration has reached a tipping point and is on the verge of being forced from office.

Never-the-less we Democrats will work with Bush to address the matters of Iraq in a bi-partisan manner. It would help a lot if the GOP attack dogs were put back in their cages first.

Democrats are also surfacing our plans for solving much of American economic woes and our nation would be well advised to listen carefully to what is being said. We are offering a plan to address the problems of education and infrastructure and to do so in a “pay as we go manner,” and it needs to be considered carefully. The Democrat plan is based upon solid economics and proven performance activities.

For a moment consider a dollar spent on energy in the mid-west rather than being spent in Saudi Arabia. As grain is purchased from farmers and converted to ethanol, the money is spent by the recipients. They in turn spend the money that they received and now the money touches about eight hands, each of whom is taxed, before it returns to Washington to be again spent for more ethanol. 

Compare that to a dollar spent in Saudi-Arabia that does not stimulate the American economy and is counted as capital outflow on trade accounts and thus contributes to deficit spending.

Which of the two dollars spent is more valuable to America?

Of course it’s the dollar spent at home and not only does it stimulate the private sector economy, it also increases government revenues meaning that taxes do not need to be increased. When Democrats speak of “Pay As We Go,” that is what we mean. When Democrats add to taxes we do it to invest and that too is different from spending. Investment provides a return on investment. Mere spending may in fact return little to nothing of value.

Now a dollar spent on energy is easy to understand, what about a dollar spent on education - how does that benefit the economy and how does it pay its own way?

It’s in the same manner actually. The recipients do not sit on the money, they spend it in America. When they do that then it again touches eight American hands, each of whom is taxed, and the money comes back to Washington. This touching of American hands is called “velocity of money,” and it creates compound growth curves depending upon how fast it is spent.

We have been deficit spending with money not going into American hands and thus it’s not helping our American economy at all. That is why Democratic programs generate jobs. It is why taxes are not bad for America. It is why the economy tends to super-heat under Democrats and why we can pay off our deficits - because we can take a portion of the money coming back in the form of taxes and use it to retire bonds held by foreigners.

This is the science of economics and it is taught at every college and University in the land. The rest of the science in macro-economics deals with how to deal with growth and how to speed it or slow it or to redirect it to sectors of the economy. It also is why tax money spent on health payments or on Social Security is not a bad investment. The money goes to individuals who in turn spend it and it stimulates our economy and generates tax revenues as a result. Macro economics as practiced by Democrats is all about a money machine and is an owners manual on how to run the money machine.

In many ways the Democrats who manage are making Capitalism flourish while the GOP has been strangling Capitalism. Spending a portion of tax money on a social safety net is not a waste of money it’s simply a way to disperse the money where it will be again spent in the economy. It also meets social needs and creates domestic tranquility so that the rest of America’s agenda can be pursued. Democrats do not object to military spending as long as it is generating jobs in America. We do not object to spending money on grants either, as long as the money is spent in America.

Enough - there are signs that America’s two biggest problems may now be addressed using common-sense. Iraq has to be managed and not allowed to just fester. So does our American economy. The talks have begun between the Administration and the Congress. Senator Murtha has performed a statesman-like service for America. He took much heat for it too and many owe him an apology. Those who attack his patriotism and his courage are especially in need of making an apology, not for Sen. Murtha’s sake, but for their own.