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The New Independent Party Blog

This Blog is maintained by Mike Barron, Executive Director and Founder of the New Independent Party. The views expressed here are not necessarily those of the Party, its Board of Governors or its Members.

To post a comment just click on the "comments" link just after the date of the original post.

Comments on the blog have to be moderated before they will appear.  The reason for this is the tendency for those with extreme opinions to attempt to force out other voices by intimidation. I apologize for this format and I will attempt to review comments as quickly as possible. All respectful comments, regardless of political orientation, will be published.

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If you would like to start an entirely new thread on the blog, just post it as a comment to the most recent blog post.  Alternatively, you can post a comment on the post set up for starting new discussions. I will establish it as a new thread. Don't forget to tell me what you would like to title the thread. 

Significance of the Alabama Special Election for US Senator

I suspect that there are very few people in the U.S. apart from Steve Bannon and Donald Trump who are really upset by the outcome of the recent special election in Alabama for the U.S. Senate. 

The winner, Doug Jones, the Democrat, is likely to be a short term problem for Republicans. If Republicans in Alabama can muster the good sense to nominate a more moderate, and less tainted candidate, they should easily recapture the seat at the regular election.

If Roy Moore, the Republican, had won he would be an albatross around the neck of the Republican Party for his term in office and beyond. Now, he will likely be forgotten in short order. While his vote might have helped them given their narrow majority in the Senate, his presence in the party would have made life far more difficult for Republicans up for re-election in 2018. If the Republicans had nominated Luther Strange, a more main line Republican, they would have a won the election and avoided the albatross.

Democrats are, understandably, jubilant about the outcome. Jones, a fairly center of the road liberal, is right of center in the current Democratic Party. He is the kind of candidate the Democrats must field to have a hope of winning elections. If they had nominated someone more appealing to the Bernie Sanders/Elizabeth Warren wing of the party, Roy Moore would be in the US Senate.

Public Policy and Sexual Misconduct Charges?

(Editor's Note: this is a new thread started by a reader)

Suddenly "sexual harassment" and closely related issues have become a huge issue with power to destroy careers with as little as an accusation. The country needs some kind of national policy and procedure for dealing with it. One part of such a policy needs to be to distinguish degrees of severity. Another is to distinguish between crimes and poor taste. Others are the degree to which if at all the accused is entitled to a presumption of innocence, the need for timeliness of allegations, and appropriate penalties. As it is now, all perceived forms of sexual misconduct are in the court of public opinion considered equally bad, there is no due process, there is no presumption of innocence, allegations do not have to be timely, and the penalty in all cases is dismissal from employment. That is not justice as America defines it.


Why I voted for Ralph Northam in Virginia Governor's Race

Ed Gillespie is a mainline conservative Republican. Ralph Northam is a moderate Democrat. In normal times I would have had difficulty choosing between these two candidates, but these are not normal times. 

Ed Gillespie chose to run a campaign appealing to many of the nativist impulses that helped elect Donald Trump. In hind sight I hope the Republicans realize that this was a terrible mistake since it cost them not only the Governorship, but the Lieutenant Governor and Attorney General spots. More sobering for the Republicans is that it appears to have cost them control over the General Assembly, which has been reliably Republican for a long time. 

Ralph Northam was a reluctant choice for for many Democrats. They nearly went with a far more left wing candidate, supported by the Bernie Sanders wing of the party.

My view was that a vote for Northam was a two-sided message. 

 To the Republicans it was a message to back off from Trumpism, if you hope to win.

To the Democrats it was a message that you can win with more moderate/centrist candidates.

The outcome of this election will be spun in a variety of directions by all sides. Speaking for myself and other centrist voters, who I believe swung this election, the message is move to the center.

Would you like to start a new discussion on a different issue? Here's how.

If you would like to raise a new issue or comment on the platform, you can just post a comment here. I will set it up as a new thread and others can comment on it in response. 

Trumpism, the Republican Party and the mid term elections

It is not the least bit controversial to note that the politics of Donald Trump do not align well with mainstream Republicanism. That is not a criticism. The politics of the New Independent Party do not align all that well with mainstream Republican, Democratic, or Libertarian thought either. 

The ways in which Trumpism differs are, unfortunately from my point of view, not the ways in which my own views, or the views of the NIP,  differ from those of the existing mainstream parties. Specifically his embrace of economic nationalism, his anti-immigrant views, and his protectionist impulses are all at odds with both the mainstream of the Republican Party and the views of the New Independent Party. I don't believe his positions on these issues have traction with a majority of the American people but they may have enough traction with his base that he can seize control of the Republican Party and bend it in his direction.

It is possible that this will lead to a defeat of the Republican Party at the Congressional level during the mid term election in 2018 and this could be good news.

First let me lay out my favorite fantasy. In this fantasy the Democrats nominate a slate of moderate/centrist candidates and win a majority in both the house and the Senate. Trump discouraged by what this implies about his chances for re-election and anxious to be thought of as effective compromises with them on a variety of issues and there is a normalization of the Presidency. Trump decides to not run in 2020 based on his age and "our long national nightmare" will be over.

My expectation is quite different. The Democrats, goaded by the far left and those who want American politics to be as chaotic and divisive as possible, are likely to nominate a slate of congressional candidates in the mold of Elizabeth Warren and Bernie Sanders. The vast majority of the electorate will be so turned off by the alternatives facing them that they stay home rather than vote. With low voter turnout the outcome of the mid terms will hinge on which party can motivate its extreme base the best and, whoever wins, we will be in an even worse political environment than we are now.

Will someone please explain to me how I am wrong.

The Way Forward for Centrists

There appears to be a slow growth of interest in centrist alternatives to the existing political structure in the U.S. Some of this may be fed by displeasure with the current political situation in DC or by surprise at the success of the new centrist party in France. Whatever it is, I sense that there is an opportunity for the emergence of a true centrist movement in the U.S.

A number of sources seem to agree that the best hope is to elect a few independent centrist candidates in the House and/or the Senate. Surprisingly, the easiest target might be the Senate because most House districts have been turned into reliably safe seats for either Republicans or Democrats.

Given how closely the Senate is divided a handful of centrist independents could have a disproportionate influence on legislative outcomes.

Let us know if you are aware of centrist independent candidates in your state for House or Senate seats. 

Disability Benefits under Social Security

Unfortunately, the cost of the Disability Program under Social Security has been exploding in the last few years. There appear to be three reasons for this: first, the criteria for disability were recently loosened to include a variety of harder to verify disabilities including mental health issues; second, the system tends to expand with long term unemployment with many of the long term unemployed using it as a vehicle for extending their coverage until regular social security benefits kick in; and third, there appears to be a very uneven and arbitrary system for resolving claims, with some administrative law judges being quite lenient and others more strict.

Obviously, we cannot afford the open ended expansion of yet another entitlement program. I would suggest that only forms of disability that can easily be verified be allowed as criteria for receiving benefits. We also need to standardize the process for resolving claims to make it tighter and more consistent.

We do seem to have a greater problem with long term structural unemployment, but expanding disability insurance into a long term welfare program seems to be both too expensive and counter productive in that people who go on it rarely come off.

Instead we need to find ways of providing cost effective retraining for the structurally unemployed, perhaps through cooperation between private sector employers and community colleges and technical training schools.

Means Testing of Medicare

I see it suggested sometimes that Medicare should be "means tested." 

When one keeps in mind that the Medicare tax is not capped and that higher income people pay higher premiums for Medicare coverage, it becomes quite obvious that the system is already quite heavily redistributionist (what some would call "progressive").

For example, someone earning $500,000 a year contributes 2.9% of that amount for Medicare (including the employer contribution), plus an additional .9% on income over $250,000. That amounts to $16,750 a year. Over a 40 year career that amounts to $670,000. Keep in mind that in retirement these people will have to pay more for the same coverage than everyone else. Let's say that generously the net subsidy for these people in retirement is $10,000 a year or over a 20 year retirement $200,000. Net they are overpaying by about $470,000.

Take someone earning $30,000 a year. Under the same assumptions, they will contribute $34,800 over the course of their career. Because they pay less than our wealthier person in premiums for their coverage during retirement, their implicit subsidy might be $15,000 a year or $300,000 over a 20 year life expectancy. The net subsidy for them is over $265,000.

My example is highly oversimplified, but, from a big picture point of view, I think it accurately portrays the character of the existing system.

If we priced cars in the same fashion, wealthy people would pay $100,000 for a $30,000 car and lower income people would get the same car for $3,500.

I think the system is "means tested" enough.

What should be done about Obama Care, the shut-down, and the debt ceililng?

It would appear that, despite its lack of popularity, Obama Care is an accomplished fact. The Republicans seem to have overplayed their hand on this one and it looks like it's only a matter of time before the Democrats do the same by denying the Republicans any kind of fig leaf victory before retreating. Candidates for an appropriate fig leaf would be ending the special treatment of congressional staff and/or ending the tax on medical equipment revenues. The first first should go because it is shameless; the second should go because it is likely to raise little revenue because it will probably just force this manufacturing off shore.

If the Democrats want to simply change the topic they could easily agree to chain indexation of Social Security and gradually pushing up the age for eligibility for Social Security and Medicare. Both of these are sensible in light of the long-term crisis we face with entitlements and the budget and the Democrats could easily exchange them for a continuing resolution that would end the shut down and approval for raising the debt ceiling. This would end the immediate crisis and make a small dent in postponing the longer term crisis. It would also allow the Republicans and Democrats to save face.

Having said all of that Obama Care is still a problem. It is a problem because, even if it works as planned, it will add to the already crippling entitlement problem that we face. It is also a problem because, as currently structured, it stands an excellent chance of starting a death spiral in insurance rates that has no pleasant end point.

The first point is obvious but the second deserves a little explanation. When Obama Care was passed the fee for not participating in the system was set artificially low in order to gain political support for the program both in terms of individual and corporate participation. As a result, healthy young people will not sign up, as often as hoped, and many corporations will opt to pay the fine and dump their employees onto the exchanges.
Under-participation  by healthy young people will cause the rates for those participating to rise. Higher rates will drive more people off of the system, which will cause the premiums of those remaining on the system to rise and so on. Even if the fee had not been set too low, the fact that the IRS was denied effective enforcement powers under the act would also result in the same outcome.

The Democrats probably knew of these problems when they enacted the legislation but thought they could fix them latter with higher fees and better enforcement powers. This, however, required that they remain in control of the House and the Senate. As we know, they lost the House because the roughshod and fiscally irresponsible manner in which they were governing gave the Tea Party an effective rallying cry.

The only way Obama Care works is if young healthy people become exceptionally cautious and risk averse. Hmm, it looks like another case of the left betting against human nature.

Another problem with Obama Care is that, since some states can and have opted out of expanded Medicaid, a large number of the near poor are ineligible for subsidies. This results in the bizarre and inequitable situation of a few dollars of less income costing the near poor around $5,000 to $15,000 worth of subsidies. It is also likely to result in the vast majority of these people not signing up, since many if not most of them are exempt from even the appearance of facing a fine for non-participation. We should expect to see these people using the traditional route to subsidized medical care, the emergency room, with all its adverse effects on the cost effectiveness of the system.

Well what can be done to fix these problems. First, everyone, and I mean everyone, has to start playing nicer. The Democrats can't fix Obama Care without the cooperation of the Republicans and the Republicans can't get this and other forms of entitlement spending under control without the cooperation of the Democrats. Both sides should give up the dream of every being allowed complete control of the House, Senate, and White House again. Clearly, neither side could or should be trusted with that much power.

Obama Care can be turned into a good and a far less fiscally irresponsible program with a few key steps:
1) Raise the penalties on individuals for not having insurance as high as the lowest cost plan and give the IRS full authority to collect those taxes.

2) Tax employer provided health care benefits as income to the employee (just like all other employer provided benefits) and eliminate the mandates and penalties designed to make employers provide health care benefits. This will remove the job killer aspects of the act.

3) Raise the required co-pays and deductibles under all of the qualifying plans except for immunizations, the treatment of communicable diseases, and high-leverage preventative care.

4) Lower the magnitude of the subsidies provided under the program, but extend these subsidies to individuals who are currently not qualified by virtue of their states refusing to accept the expansion of Medicaid.

Doing all of these things would give us a robust individually based health insurance system in which no one could be denied care because of preexisting conditions. This system would also provide better incentives for cost containment, and a more equitable treatment of the poor and near poor.

Any thoughts?

Means testing of Social Security

The selection of Paul Ryan as the Vice Presidential candidate for the Republicans got me thinking about the issue of means testing Social Security. As I mentioned in my blog on Ryan's selection, Social Security is already means tested in the method of calculating the benefits and in the taxation of those benefits.

Means testing is often speciously defended by asserting that the likes of Buffet and Gates do not need Social Security benefits. While this is no doubt true, means testing Social Security to prevent it from going to the truly wealthy would not save enough money to be worth the bureaucratic trouble and cost. In order to get a worthwhile benefit from means testing it has to impact the middle class.

A significant middle class means test, whether based on assets or income or both, will be very difficult to design and implement equitably. For example, if IRA and 401K assets are to be counted then the market value of pensions must be counted too, if not, it will not only be inequitable, it will force a massive redirection of retirement programs toward classic defined benefits pensions. Including the market value of pension plans will require that the government develop and maintain a bureaucracy with the actuarial ability to asses the value a wide variety of pension plans.

If, as is more likely, the means testing is focused on income, including income from with drawls from IRA and 401K plans , it creates a powerful disincentive for work and savings and punishes individuals who responded to earlier government incentives to invest in these plans. This effect could be diluted by basing the indexing on cumulative life-time Social Security income, but this solution still creates a disincentive for work.

The New Independent Party's Platform avoids these disincentive, equity, and bureaucracy issues by attacking the real source of the problem: longer life expectancies. Gradually increasing the retirement age for Social Security deals with the underlying problem without creating any perverse incentives for work or investment or requiring any additional bureaucracy.

If the objective is to shift even more of the burden of supporting these programs to higher income groups, that can be done with far less bureaucratic fuss by increasing the cap for the Social Security payroll tax or by removing the cap entirely for some small percentage of that tax or by applying that tax to unearned income. This will still have a negative impact on incentives for work and investment but it will spare us from having to develop the necessary bureaucracy to administer a means test.

Paul Ryan as the Vice Presidential Candidate?

The best thing about the selection of Paul Ryan as the Vice Presidential candidate for the Republican Party is that it focuses the election on the what should be the central issues of this campaign: the budget and the economy.

I don't think I agree with Ryan on every position he has taken on these issues but he deserves praise for taking the issues on in a straightforward manner, when other politicians have hidden their heads in the sand.

He will, no doubt, receive criticism for his positions on Medicare and Medicaid. I would encourage those who are considering these criticisms seriously to ask the critics what their plan is for dealing with the fiscal train wreck that these programs have become.

Two proposals that Ryan appears to support would be in conflict with the New Independent Party's Platform. The first Ryan position that is in conflict with our platform is his support for means testing Social Security. As pointed out in our Platform, Social Security is already progressive in its design both because its benefits are calculated to favor low income participants and because those benefits are exempt from taxation for low income participants and taxed progressively for higher income participants. Further means testing of Social Security seems to us to be unwise because it creates a disincentive for savings and investment.  The second Ryan position that is in conflict with our Platform is his believe that the size of the tax credit to support private health care insurance purchases should be tied to the health status of the individual. We oppose this because it would create a massive amount of bureaucracy to track the health status of individuals and with it a significant opportunity for fraud and abuse.

Despite these differences with Ryan's proposals there are huge areas of agreement between Ryan's positions and those of the New Independent Party.

Gun Control

The recent tragedy at a movie theater in Aurora, Colorado, in which at least a dozen people were killed and scores more were injured by a well-armed individual, is bound to turn attention toward the issue of gun control. 

Not coincidentally, I just finished reading a great book on the subject of gun control by Adam Winkler, a constitutional law professor at UCLA. The book, Gunfight, provides a nice, balanced review of the history leading up to the recent Supreme Court decision on gun control: D.C. v. Heller. This landmark decision explicitly laid out, for the first time, the Supreme Court's position on what the Second Amendment really means. (There was a much earlier Supreme Court decision, U.S. v. Miller, that addressed the issue, but it did not shed much useful light on the subject.)

Despite a long history of lower court rulings that the Second Amendment only prohibits federal laws (including laws passed by the District of Columbia) that might interfere with the forming of militias, the Supreme Court held in Heller that the Second Amendment also provides protection against federal laws infringing on the ability of individuals to keep guns for their own self defense. 

Heller makes one thing unambiguously clear: all gun control laws that prohibit, or severely restrict, the use of hand guns and traditional long guns, in the home, for personal self defense will be held to be unconstitutional, whether or not such laws might be manifestly effective at improving public safety and reducing gun violence.

Justice Scalia, however, noted, in his majority opinion, that, "like most rights, the right secured by the Second Amendment is not unlimited." "The right was not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose." He concludes that "nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms." He goes on to say, citing U.S. v. Miller, that "we also recognize another important limitation on the right to keep and bear arms....that the sorts of weapons protected were those "in common use at the time.'" This certainly permits restrictions on the right to keep machine guns and seems to keep open the possibility of controlling ownership of semi-automatic assault weapons and other "dangerous and unusual weapons."

A subsequent Supreme Court decision, McDonald v. Chicago,  ruled that the 14th Amendment extends the protection of the Second Amendment to individuals against laws passed by the states and local governments.

These decisions, while prohibiting gun control laws that ban all gun ownership or prevent their ownership for self defense, allow federal, state, and local governments to impose a variety of restrictions on how guns are acquired, what types of guns citizens can possess, who can possess them, and where they can be taken.

The public policy debate on gun control, apart from the unlikely potential for a constitutional amendment, is therefore framed around what kinds of restrictions are justified based on the data and history of our experience with gun control.

The New Independent Party's Platform addresses the issue of Gun Control in a manner completely consistent with the recent Supreme Court decision in D.C. v. Heller. What it does not address is where the line should be drawn as to what constitutes a reasonable restriction on the constitutional right to bear arms and what does not. My personal position, which I also think is consistent with Heller, is that the burden of proof lies with the government to demonstrate that any proposed restriction on the right will provide a material improvement in public safety and will not impose an undue burden on the individual's right to bear arms for their personal defense. The D.C. and Chicago gun control laws would never have passed this test. I believe the existing restrictions on the ownership of machine guns would. The restrictions on semi-automatic assault rifles that recently expired would probably not pass the first test, because there are other weapons that are equally lethal and because the restrictions had loopholes that made them unenforceable.

Gun control advocates might argue that it is unfair to criticize gun control laws on the basis of loopholes created at the insistence of gun rights advocates. It may be unfair, but it is also reasonable that we should not to pass symbolic legislation, that imposes burdens on law abiding citizens, without a reasonable expectation that the legislation will be effective at improving public safety.

If the courts ultimately embrace the notion that a legislative burden of proof must be met for gun control legislation to be deemed constitutional, what will it mean? First, it would mean that regardless of the evidence on effectiveness, complete bans on hand guns and traditional long guns in the home for the purpose of self defense will be held to be unconstitutional. Second, it would mean that other restrictions would be held to be constitutional if the legislative history of the acts indicated that the government had acted on reasonable evidence that the legislation would materially improve public safety and would not impose and undue burden on the rights of individual citizens.

Given the court's traditional deference to legislative actions, this second test probably means no more than that there must be a legislative history that these issues were addressed. It would be unlikely that future courts would substitute their own weighing of the facts to rule a particular statute unconstitutional unless it violated the first test.

As a a consequence, while there may be a long series of court battles over prior gun control acts, it is my belief that local, state, and federal legislatures can avoid constitutional challenges to future gun control legislation by simply avoiding blanket bans on gun ownership and by being attentive to carefully weighing the public safety benefits of legislation and its burden on law abiding citizens during the legislative process.

What I hope this means is that the issue should gradually disappear from the courts and become a tightly framed, data driven, legislative question, rather than the emotionally charged issue it has been for the last few decades. 

I believe that there is a permanent role for the courts to play here here and in most other areas of constitutional law that is consistent with the philosophy of "originalism" but recognizes that the framers could not fully have anticipated technological change. The New Independent Party"s Platform states, in the Judicial Appointments plank, that the Constitution should be a binding document that should be interpreted based on the original intent of the framers. The courts should not reinterpret it based on changing social preferences, like our attitudes toward death penalty. They must, however, reinterpret it in the light of technological changes. 

For example, Scalia, implicitly decided that handguns and traditional long guns kept in the home are not "dangerous or unusual weapons."  I suspect that a modern semi-automatic hand gun, or semi-automatic rifles with a telescopic sights, would have been considered quite "dangerous and unusual" in the late 18th century. I agree with Scalia's judgement that, despite this, these guns are covered under the "original intent" of the framers. Originalism can take one only so far before some degree of latitude is required to deal with technological change.

Having said that, I do not believe that this discretion should extend to interpreting the Constitution to be consistent with current popular sentiment.

Supreme Court on the Constitutionality of the Health Care Law. What's Next?

The recent Supreme Court decision settles the issue of the constitutionality of the "Affordable Care Act" but leaves this public policy issue front and center for the election.

I agree with the portion of the decision that found the act coercive with respect to the expansion of state provided Medicaid. I would have agreed with Roberts' decision to find the Act constitutional under the federal government's broad taxing powers were it not for the history of the Act and its language.

Tax legislation is constitutionally required to originate in the House. The Act originated in the Senate, for political reasons. In addition, also for political reasons, the administration went to great lengths to avoid characterizing the penalty for not having insurance as a tax in the language of the legislation. If Roberts had wanted to hold that the Act would have been constitutional if it had originated in the House and if the fee had been labeled as a tax in the Act's language, he would certainly have had plenty of cover.

The fact of the matter is that he did not, so the issue going forward is strictly a public policy debate over where we should go from here legislatively.

The Democrats would have us believe that the issue is settled. This is clearly not the case. The Democrats, also for political reasons, set the tax so low that both individuals and firms are likely to pay the tax rather than comply. As a consequence insurers will be left with a high risk pool of clients and will be forced to raise rates. Higher rates will encourage even more people to opt to pay the tax and wait until they are seriously ill to seek insurance coverage (which under the Act cannot be denied to them).

The Act, as it is currently constituted, is therefore fatally flawed and everyone who is in a position to be honest about the question knows it.

Congress could fix this flaw by simply raising the tax on employers and individuals who fail to comply. That, of course hands the power to rewrite the legislation to whoever controls congress. If Obama remains president he could, of course, veto whatever legislation emerges from congress, but if he does so he is left with the currently fatally flawed legislation on his hands.

My own guess is that he would veto an outright repeal of the Act, but that he would accept significant changes to the Act that might be functionally the same as "Repeal and Replace."

In a future blog, I will attempt to lay out the changes that I think would move the Act in the direction of the policy proposals embodied in the New Independent Party's Platform.

Americans Elect bows out for 2012

Recently Americans Elect decided to drop out of the 2012 Presidential election. The decision was apparently motivated by the failure of any of the announced candidates on their web site to receive 10,000 votes of support. The candidate who came closest was Buddy Roemer, former Louisiana Governor.

Americans Elect was very well financed (in the 10's of millions of dollars). Their failure to catch on means something for our efforts but I'm not sure exactly what. They had no party platform and that may have discouraged people from joining. They also were secretive about some of their sources of funding. Their explanation, as provided by Cristie Whitman on an NPR interview, was that some of their major donors wished to remain anonymous because they were concerned about the reaction from the major parties. I have also seen it reported that Americans Elect was committed to returning some of the funding they had received from large donors. This may have acted to discourage small donors from contributing. Another concern often voiced about Americans Elect, is that it would draw support from one or the other of the major parties. I think both Democrats and Republicans suspected it was an attempt to drain support from them.

All of the above reasons are possible explanations for Americans Elect's failure to succeed despite their substantial funding. None of them, however, provides any cause for concern for the approach advocated by the New Independent Party. What would be a cause for concern is if the real reason for their failure was that America is not that interested in moderate candidates. There is the possibility that the American electorate is really as polarized as the political process.

I don't think this is the case, but the experience of Americans Elect serves to illustrate just how difficult it will be to nudge the political process out of its current pattern of polarization even with significant funding.

House Republican Budget,

Since Mitt Romney, the likely Republican candidate for President, has embraced the House Budget I think it would be a good idea to compare it to the economic plan laid out in the New Independent Party's Platform. This seems especially important since, I think, there is about a 50% chance he will pick Paul Ryan, the head of the House Budget Committee and a principal author of the House Budget as his running mate.

The Budget and National Debt the Big Picture

From a big picture point of view, the House Budget targets long-term total federal tax revenue at about 19% of GDP. This is higher than current levels but lower than the 20% target established in the New Independent Party. To put these numbers in context Ron Paul argues for taxes and spending at about 15% of GDP. It appears that the Democrats support a level of taxation of about 23% of GDP, but I have not seen a specific number from them.

Another big picture observation is that the House Budget anticipates a long term level of spending below this 19% level so that eventually the national debt is retired. The New Independent Party supports a spending level at around 20% of GDP so that, after a brief period of deficit and debt reduction, the U.S. maintains a lower but positive level of national debt. The Party's Platform does not explicitly identify a long term target Debt to GDP ratio. I am guessing that something greater than 25% but less than 50% would be sustainable. Current public policy would result in a level of national debt many times the annual GDP of the U.S. The current Debt to GDP ratio is around 70%.

The Democrats appear to agree that the current public policy path on the budget is unsustainable, but they want to place the primary burden of reducing it on higher taxes, matched with a more modest level of spending reductions. It is not clear what long-term targets for spending, taxation and debt the Democrats would support, but I am guessing they are all substantially higher than both the House Budget and those proposed in the New Independent Party's Platform. On this issue we lean in the direction of the Republicans but don't go as far as they do.

Marginal Tax Rates

The House Budget proposes lowering the top marginal personal and corporate rates to 25%. The New Independent Party proposes a top personal rate of 30% and a top corporate rate of 20%.

I believe that the President has proposed a lower corporate tax rate, I think it is also 25%. The quid pro quo for lower corporate income tax rates is higher personal marginal tax rates for high income individuals.

All sides, including the New Independent Party. appear to support reducing deductions, exemptions, and credits to offset the loss of revenue from lower marginal rates. Not surprisingly both Republicans and Democrats are silent, for the most part, about which of these "loop holes" they would chose to close.

The Democrats are on record, I believe, that the principal objective of higher personal marginal tax rates is not revenue but "fairness." It is hard to say objectively what is "fair" but it should be remembered that corporate income is taxed twice: once directly as corporate income and then again through the taxation of dividends or capital gains. So when the President talks about the tax that upper income people, like Warren Buffet, pay he should reflect the combined effect of both tax rates. This puts the top federal marginal rate on combined corporate income, dividends and capital gains at close to 60%. This is well above the tax rate that the average middle class person pays. No one disputes that this is the appropriate way to look at this issue (the Democrats as simply silent on the question), but when stated this way it does not make very good populist politics.

Other Issues

I will address the Republican Budget's position on other issues like Social Security, Medicare, and Medicaid. in future blogs.

"The Swing Vote" by Linda Killian

I just finished reading "The Swing Vote" by Linda Killian. While I enjoyed the book because I agree with a lot of what she has to say, I have to say that many of the criticisms of it in a review from the New Republic also seem valid to me. 

Here is the gist of the debate. Killian notes that something like 40% of the public identifies as Independent and that this percentage is growing. Ruy Teixeria, who wrote the review in TNR, notes that many of these folks lean Republican or Democratic. He notes that a greater percentage of Democratic leaning independents voted for Obama than did self-identifying Democrats. 

I did not find this all that surprising because candidate Obama said all the right things to appeal to independents and some of this may have alienated some true blue Democrats. I think it will be interesting to compare these numbers during the next election. 

That said the TNR review has a point. Many independents are IINO's "independents in name only."  But what he fails to note is that many Republicans and Democrats are RINO"S and DINO's. I was was that myself for most of my life. There is certainly no point in being an independent in a state that disenfranchises them by refusing to to allow them to participate in primaries. I have seen it estimated that only half of the 40% of voters who identify as independent voters are true swing voters, although the TNR review cites a lower estimate. 

The TNR reviewer also notes that this group tends to vote less and be less engaged. This is also not terribly surprising given what they have to choose between.

I will research this issue and report back here but my prior frequency distribution on this issue is divided into fifths. I think about 20% of the voting age population is Democrat and happy with their party, about 20% is the same for Republicans, about 20% generally leans toward the Democrats and 20% toward the Republicans but not enthusiastically, even if consistently, and about 20% are true swing voters. 

Having said that some of those who are less than fully affiliated with the major parties are anything but centrists. This crowd includes Green Party sympathizers, Occupy Wall Street types, and right-wing fringe groups and individuals.

In terms of my aspirations for the New Independent Party and its Platform, I think that about 20% of the voting age population would pick out our Platform if it were laid out next to that of the major parties. I think this would be about the same that the platforms of the major parties would attract.

I tend to agree with George Will, who I believe said that all politics is partisanship (or something like that). For that reason I believe that movements whose core purpose is bipartisanship or nonpartisanship or centrism are unlikely to achieve great success. What I am hoping to see is partisanship in support of a specific agenda (as outlined in our Party's Platform) that happens to be more centrist.

Americans Elect and the Electoral College

One big concern about third party candidates for president is that a modestly successful third party candidate could prevent any candidate from receiving a majority of electoral votes and push the election into the House. 

Christine Whitman, former Governor of New Jersey and a board member for Americans Elect, was on the Diane Rehm show on NPR today. She said that Americans Elect is determined to avoid this scenario. 

Unfortunately, I am not sure that they can. More than half the states require electors to vote for the candidate who won the popular vote in their state. In those states where this is not a requirement, the electors from Americans Elect could just pledge to vote for the candidate who receives a plurality of the vote nationally, or some other rule and avoid sending the election into the House, but they would not all be free to do that.

Plans to Increase Retirement Savings

I have seen a number of proposals lately for increasing retirement savings by creating a form of mandatory IRA. The proposals differ slightly but they have a common set of characteristics. Individuals would be compelled to contribute some amount (typically 5%) of their compensation to a federally managed index fund (that would include fixed income and equity). Low income individuals would either have their contributions matched by the federal government or the federal government would make these contributions for low income people. Proposals for paying for these subsidies vary but a common theme is to increase taxes on the "wealthy." In at least one case this is done by reducing or eliminating tax incentives for "high income" people to invest in IRA's. The theory is that these "high income" individuals will save anyway and the tax incentive is wasted in terms of inducing aggregate net savings.

I have a number of objections to these proposals:

1) I dislike any proposal that compels people to take action. Sometimes this is necessary but we ought not to get into the habit of doing it.

2) As with higher income individuals the savings that this plan compels will displace other kinds of savings for low income people (including the purchase of long-term consumer durables like housing). The net effect on total net retirement savings is likely to be less than expected. It is wrong to think that people who don't save much can't save less, because they can take on debt thereby cancelling out the effect of the savings. In this regard, it is important to remember that a larger proportion of people in the lowest income quintile own their homes outright than do people in the highest income quintile.

3) In the event that there is a significant market collapse, like the one that occurred in 2008, there is also likely to be enormous political pressure to make low-income people whole.

What should we do to increase the savings rate?

We should remove the responsibility for the Fed to pursue full employment (or encourage home ownership) through artificially low interest rates. This would increase interest rates encouraging savings at all levels. In addition, it would lessen the fear of inflation from loose monetary policy, which acts to discourage savings. (Full employment should be pursued through other policy vehicles.)

We should also lower corporate tax rates and maintain very low dividends and capital gains tax rates for low income individuals which will create a market incentive for them to save through purchasing equities. Personal income tax rates and deductions could be adjusted to make these changes revenue neutral.

Angus King: Independent US Senate Candidate in Maine

Angus King is the former Independent Governor of Maine. He is running for the Senate seat that Olympia Snowe (R) is retiring from. While he will probably caucus with the Democrats, he has not shut the door on doing so with the Republicans. He is reported to be fiscally conservative and socially liberal and bears watching. He is expected to be the favorite in the upcoming race, since he is well liked in Maine.  Unfortunately, he has not taken definitive positions on a large number of issues yet.

What does success look like for the New Independent Party?

Success for the New Independent Party does not require the end of the two party system.

What I, for one, would like to see is the election of some Democrats who are willing to significantly lower federal spending and curtail entitlement programs in return for some modest broad based tax increases and tax reform; some Republicans who are willing to trade off some modest broad based tax increases in return for those spending reductions and tax reform; some open minded Republicans on social issues; and some Democrats who are willing to show restraint on how high and fast they will push the bar on social issues.

With enough of these people spread around the House and Senate reasonable compromises on the public policy problems facing our country can be achieved. How many will it take?

A handful in the House might be enough, just enough to prevent the party in power from being able to pass anything extreme and enough to allow the party that is out of power to prevail if if offers an attractive alternative. 

In the Senate there have to be enough to permit a successful cloture vote to overcome a "filibuster" and allow a vote. This means that success might require that 20% of each party in the Senate be centrist, in the way in which the New Independent Party defines it.

Is this achievable? I think it is, considering that 18 states have open primaries and a few others have partially open primaries. That combined with the fact that roughly 40% of the electorate is independent creates the potential for a significant powerful centrist swing vote in Congress even in the context of a completely two party system.

The challenge for the New Independent Party and others who would like to see this outcome is to organize at the state level and begin participating in the primary process. we need to support candidates from either party who lean toward the New Independent Party Platform and who, with significant independent voter support, could win their party's primary and the general election.

Any thoughts?

"Come Back America" David Walker on Tax Policy

I am currently reading David Walker's book on the fiscal crisis. He was the former U.S. Comptroller (1998-2008). He has been touted as a possible third party candidate for President.

Walkers criticisms of the current personal and corporate tax system matches up closely with those laid out in the Party's Platform. His solutions, lower rates and fewer deductions and credits, are also similar to those proposed in the Platform.

He argues that more total revenue is necessary to deal with the current fiscal crisis, which is not at odds with the Platform.

Where he does depart in a significant way from the arguments and proposals in the New Independent Party's Platform is in his embrace of the consumption or value added tax as a vehicle for raising more revenues.

The Platform suggests using externality taxes as the vehicle for accomplishing closing the fiscal gap and opposes a consumption tax. He does not address this approach so there is no way of knowing how he would react to it.

As an aside, I think it is interesting that he wants geographical differences built into the tax code. This is not unlike his desire to make special arrangements for older manual workers in his Social Security proposal. From my point of view, public policy should take care of the broad issues and let individuals and markets adjust. In the case of the tax code, if some regions have higher costs and are therefore disadvantaged by some policy change then, overtime, people and markets will adjust to these differences. To do otherwise invites complexity, bureaucracy, and inter-regional lobbying.

"Comeback America" by David Walker: Health Care

This book, on America's fiscal crisis, was written by David Walker, former Comptroller of the U.S. He has been touted recently as a possible third party candidate for President.  Unfortunately, the book came out before ObamaCare was fully baked. It is not clear how he would have come down on the final product. He also does not mention voucher or refundable tax credit based systems like the one embodied in the Party's Platform, so we don't know how he would feel about it.

Having said that his diagnosis of the problems with the current system matches up very well with that laid out in the Party Platform.

"Comeback America" by David Walker: Social Security

I am currently reading David Walker's book on the fiscal crisis. He was the former U.S. Comptroller (1998-2008). He has been touted as a possible third party candidate for President.

I will be commenting here on the differences between his proposals and those presented in the New Independent Party's Platform. But before taking on the first issue, I should mention that he has a variety of process recommendations that I will not be addressing. These recommendations are mostly centered around ways to get broad buy in to the proposals.

The first of the substantive issues that he takes on is Social Security.

There are several similarities between his recommendations and the Party's Platform including: leaving those currently at or near retirement largely unaffected and raising the full retirement age to 70. He does not mention switching over to the chain index for calculating the cost of living adjustment but he does suggest slightly lowering the adjustment, both of which are similar in their impact. He recommends raising the minimum retirement age to 65 which is essentially the same as the Platform's recommendation for 64 years of age. The Platform raises the maximum age to begin taking Social Security to 72; he suggests having no maximum age but allowing individuals to elect to indefinitely postpone taking Social Security in return for, actuarially equivalent, higher benefits beginning at a later time. This seems completely consistent with the proposal in the Party's Platform and I, for one, find it a reasonable addition.

There are however, three major differences between the Platform and his recommendations. The first is to increase the welfare like characteristics by raising the floor on benefits and reducing payouts for those with a history of higher incomes. The second it to raise the income cap on Social Security from $106,800 (2009) to $150,000. The third is to require a 2 to 3% contribution to an individual IRA.

The effect of the first two of these recommendations is to increase the welfare like nature of Social Security. It needs to be remember that compared to a private retirement plan Social Security is already tilted heavily in the direct of being a welfare program. Low income wage earners receive the Earned Income Tax Credit to offset their contributions. The benefit formula is tilted to disproportionately provide benefits to low wage earners. Finally, the benefits are taxed as income and when combined with the progressive tax system this further reduces the payout to higher income individuals relative to low wage earners. The Party Platform retains the redistributionist character of the current system including the Earned Income Tax Credit (actually recommending increasing it under certain circumstances), but opposes efforts to make the Social Security System even more welfare like than it already is. The Platform recognizes the possibility that the cap on the Social Security tax might have to be raised to make the system completely sound, but it views this as an escape valve to be used after the benefit changes discussed above are exhausted.

The third difference between his recommendations and the Platform is the recommendation for a required contribution to an IRA. This is not necessarily a bad idea but it may have a much smaller impact on the national savings rate, than Walker expects. The U.S. savings rate recently bumped up to around 5% after drifting down to around 3% during the housing bubble. During the bubble individuals viewed their homes as a form of savings and felt that additional savings were less necessary. As housing values declined savings rates rebounded. Similarly, if individuals are compelled to save 2 to 3% in IRA's they will feel, at least to some extent, a reduced need for other savings.

One objection raised to extending the age for receiving benefits is concern for those who may not be able to work longer in their careers by virtue of age. He suggests that those engaged in heavy labor be allowed to access Disability Insurance to tide them over until they are eligible for Social Security. I did not include this as a major difference because, to a certain extent, it is not a policy change at all since those who become too infirm to continue working are already entitled to disability benefits. If that is all that he means I don't think there is a significant difference between his recommendation and the Platform. If, however, he is recommending a special class of occupations and eligibility rules for Disability Insurance I think he is asking for a bureaucratic mess. All kinds of work become more difficult as we age, I don't think we want to go down the road of trying to deal with this governmentally.  Instead, individuals who are doing work that they are unlikely to either want or be able to do until they are 70 should save more and take the early retirement option. The government should not be expected to intervene to micro manage this situation.


Another organization in the independent political space is "Nolabels." Nolables was co-founded by David Walker mentioned below. I respect the efforts of groups like Nolabels and Americans Elect but I find that in the effort to be non-partisan they lack substance.

Nolabels is focused on a dozen changes that they feel would make government work. For me, and for many others I think, making government work is only a good thing if the substance of what it would be doing is better than nothing. Gridlock may be superior than greasing the skids for a narrow majority of either the Democratic or Republican Party to do what they want. I view the checks and balances in our system as a good thing, not something to be overcome.

That is why the New Independent Party was built around a well defined political agenda. It is my hope that if enough votes and money can be aggregated around that agenda candidates in one or both of the major parties will begin to tilt toward that agenda.

The motto of Nolabels is: "not left, not right, but forward."  For me "forward" is not, by itself, a good direction.

David Walker of the Come Back America Initiative and Americans Elect

David Walker, U.S. Comptroller General from 1998 to 2008, is getting some press as a potential standard bearer for a fiscally conservative, socially moderate bid for the White House. Walker has been mentioned in the last couple of days in editorials by Tom Friedman at the New York Times and Harold Meyerson at the Washington Post.

As Meyerson points out Walker is on the long list of candidates available to support at "Amercans Elect" (see below for discussion of this organization), but then again so is Tom Friedman. Neither one of them seems to have more than a small fraction of the support garnered by Ron Paul, or others, on that sight.

As Meyerson points out Americans Elect appears to be promoting Walker with a positive press release but, by design, Americans Elect has turned the decision of who to support over to its "delegates."  Delegates in the American's Elect process only have to be registered voters, no donation is required.

This situation provides a nice illustration of why the New Independent Party only grants Governing Member status to donors and only empowers Governing Members to amend the Party's Platform once the membership reaches a substantial threshold.

American's Elect appears, at least to me, to have been taken over by Ron Paul supporters at zero cost. Our method for empowering our membership, while not perfect should act to discourage those who do not support most of the initial platform of the Party from joining. As a consequence, the founders of the New Independent Party can be comfortable handing the decision of who the Party will support over to the Governing Membership.

This turn of events also points out to me another failing of Americans Elect that has kept me from joining them. They have no intellectual core, other than bi-partisanship. Perhaps their feeling is that the requirement for their Presidential candidate to choose a running mate of another party is enough to guarantee reasonableness. As I understand it, however, their requirement is just a different party not a major party. One could therefore imagine a Democrat with a Green Party Member or a a Republican with a hard right-wing independent. To me at least, Americans Elect is too much about process and not enough about substance.

Any thoughts?

Obama's Proposal for Changing Corporate Income Taxes

The Administration has leaked that they are planning on proposing changes to the corporate income tax tomorrow, Feb. 23.

The good news is that, as they have indicated before, they would support lowering the top rate from 35% to 28%.

The bad news is that they would more than compensate for lowering the rate by eliminating enough deductions and credits to actually increase corporate tax revenue by a significant amount. They would also attempt to lower taxes on manufacturing (how is not quite clear) and impose a tax on U.S. Corporation's foreign earnings.

The New Independent Party's Platform calls for lowering the corporate rate to 20% and eliminating deductions and credits as much as possible to help pay for it. Absent the new sources of tax revenue outlined in our tax proposals and significant reductions in government spending as a quid pro quo, we would insist that the effect be revenue neutral (assuming no change in economic activity). It should be noted that the average corporate tax rate among developed countries is about 25%.

The desire to single out manufacturing for special tax benefits seems to me to be both unworkable and bad public policy for reasons explained in the blog comment on Santorum.

The notion of taxing U.S. corporations on their foreign income seems especially wrong headed and likely to result in less competitive U.S. corporations with a smaller share of global markets. Most other developed countries are moving in the opposite direction taxing corporations only on the income that they generate in the host country.

I suspect the special breaks for manufacturing are meant to appease the unions which are over represented in this sector and a major source of support for the President.

Long Range Planning-How to get there from here

People often ask me to name a few fiscally conservative and socially liberal candidates.

It's a hard question to answer, particularly if I restrict myself to current candidates. There are two existing but endangered groups that are likely places to find candidates that the New Independent Party's membership might support. One is the Republican Leadership Council, a PAC set up to promote moderate Republicans who are "fiscally conservative and socially inclusive;" another is the Blue Dog Coalition, a group of fiscally conservative Democrats. I also think that some Tea Party members might be sympathetic to our agenda. It is my understanding that this loosely affiliated group has a core fiscally-conservative agenda and no social agenda. To the extent that that is the case, roughly half of all Tea Party members could well be sympathetic to our agenda. Unfortunately, I don't think the Tea Party has spawned any candidates who would be attractive to our membership. If any one is aware of any Tea Party associated candidates who are socially liberal, libertarian, or even just "socially inclusive," please let me know.

The challenge for all of these groups and the New Independent Party is to get attractive candidates to emerge from the existing nominating process of the major parties. I think that, in order to serve the purpose of growing the pool of attractive candidates, the New Independent Party will eventually have to inject itself into primary politics.

We are a bit late in the current election cycle to do that. In the future, however, I can see a role for the New Independent Party during the primary process, especially in those states that have open, or nearly open, primaries. By identifying candidates early on, we might be able to push the political process to produce some candidates that will be more supportive of views like those in the New Independent Party's Platform.

How that would work in terms of the mechanics of the New Independent Party is hard to say. The primary process is very fluid and it would be difficult to fix a date and take a vote of the Governing Members to decide who to support. Perhaps an open poll could be set up on the web site that listed all candidates registered in the early primaries. Based on the ongoing information from that poll and research conducted by the Party's staff, the Board of Governors could endorse candidates and encourage independent voters in those states to vote for them in the primaries.

Any ideas?

Set up Facebook, Linkedin, and Twitter accounts and more.

There is now a New Independent Party Facebook page, a twitter account at "NewIndependentP", and a Linkedin account. There is also a new Linkedin group: "New Independent Party"  They are all linked together and they all link back to this web site. If you are on any of these services please take a moment to link to us. The Linkedin group looks like a good place for a free and open exchange on the issues we are discussing. Visit us there too.

Laurence Kotlikoff

Someone sent me a link to a Youtube video by Laurence Kolitkoff. He is a Professor of Economics at Boston University and a candidate for President in the Americans Elect primary. His web site is kotlikoff2012.org.

Since he is an economist there are some, not terribly surprising, similarities in our approaches to a number of issues.

However, there are some significant differences.

First, as mentioned in the Platform Philosophy section of the Platform, we are focused on four key principles: economic efficiency, equity, personal freedom and political realism. A brief reading of his tax plan suggests that he tends to overweight equity (as narrowly defined in the form of the progressivity of the tax system) relative to us. We define equity more broadly to also incorporate social mobility, equality of opportunity and personal responsibility. In addition, we note that the current degree of progessivity of our tax system is part of our problem, encouraging the largely untaxed to prefer too much government and the over taxed to prefer too little of it.
Second, there are some specific differences in his plans that, I think, are bad public policy. For example he, like us, proposes a voucher system for subsidizing health care. But he argues that the size the the voucher should be tied to the health status of the recipient. I can only imagine the fraud and/or the massive bureaucracy that policing such a system would create. I am sure that the reason he does this is because he has no mandate to purchase insurance and as a result he anticipates that the cost of insurance for sicker people will be prohibitively expensive. We deal with this problem by making the voucher only available to purchase insurance policies from firms that don't discriminate on the basis of pre-existing conditions. If the voucher is large enough this should be a near perfect substitute for a mandate and it would avoid the fraud and bureaucracy problems of his plan.

Third, he proposes replacing the income tax with a combination of broad based consumption and inheritance taxes. Since he eventually taxes both consumption and savings (income) I suspect he believes that the advantage of this approach is ease of administration. Unfortunately, in all likelihood, a broad based inheritance tax would be a nightmare to administer. The only saving grace to the current estate tax is that if affects relatively few people.

Fourth, his carbon tax proposal is for a variable tax that falls as the market price rises and increases as the market price falls. He clearly recognizes that this creates a perverse incentive in the face of OPEC's market power over oil but his comment that this should be taken in account begs the question of how one might do that. In my view, there is no good way of doing this (we studied this at some length when I was at the Department of Energy). He also suggests that we should go ahead and impose a carbon tax on ourselves and encourage others to do the same. As a an economist he must know that this kind of a tax will be ineffective, and possibly counter productive, if others do not almost universally impose similar taxes. His suggestion for a tariff on all imports from countries that do not impose a carbon tax on themselves (or its equivalent) suggests that he does understand this. Unfortunately, his suggestion that we "coordinate" this with the World Trade Organization does not circumvent the fact that such a tarriff would be in violation of a wide variety of existing trade agreements.  We support the notion of a significant tax on carbon emissions provided that the vast majority of the rest of the world agrees to impose similar taxes on themselves. We believe that the only way we will get effective carbon restraints in place is by insisting that our cooperation depends on the cooperation of others like China and India. His desire to use some of the proceeds of the tax to subsidize low income people reflects his bias toward income redistribution noted above. His desire to use the proceeds to subsidize specific clean energy technologies is unnecessary, since the whole point of the the tax is to internalize the environmental costs of carbon. Once that is done there is no need for further government intervention with the possible exception of some basic research.

Fifth, his limited purpose banking proposal is intended to get at the same "too big to fail" problem that we address with a tax on the scale and leverage of financial institutions. His accomplishes the objective but only by eliminating leverage from financial institutions. Leverage can be useful in making legitimate economic activity worth pursuing that would not justify the costs in the absence of leverage. It makes financial markets more efficient than they would other wise be. I view his approach as throwing out the baby with the bath water. The problem is excessive leverage when combined with scale. Taxing these factors reduces the risk of the "too big to fail" phenomenon, while allowing firms to take advantage of leverage if they are willing to bear the cost of the tax.

Having said all of that, there is a lot in his platform that is appealing.

One thing I particularly liked was his approach to quantifying the deficit. He defines an infinite time horizon deficit equal to the difference between the present value of all future projected government expenditures less the present value of all future expected tax revenues. He cites an estimate of $311 Trillion. I agree that we ought to routinely look at this number since it shows how untenable our current fiscal policies are.

Americans Elect

A number of folks have mentioned Americans Elect as a possible source for a third party candidate that we might want to support. Americans Elect is an online political organization that is very well funded. They are trying to put a candidate on the ballot for President and Vice President in all 50 states. They have an online process for selecting a candidate and a requirement that the candidate (assuming they accept the nomination) pick someone from another party to run with them as the VP candidate.

While Americans Elect is a noble experiment it has the same problem that all third parties have particularly at the presidential level. Since they are unlikely to actually win in the election their candidate will siphon off votes from the candidate they are most like. If the Americans Elect candidate leans left it will help elect the Republican. If they lean right they will help elect the Democrat. If they are successful enough to deny both candidates a majority in the Electoral College they will toss the Presidential election into the House of Representatives.

It is not inconceivable that the New Independent Party could end up supporting the Americans Elect candidate. In order for this to happen the Board of Governors would have to decide that they had a serious chance of success and put them on the ballot for the Governing Members to vote on. If the Governing Members of our organization then selected that candidate during the Party's online poll then that would be our candidate.

At the moment Ron Paul appears to be a likely candidate from the Americans Elect process. If he were to accept the nomination and gain a significant portion of the vote this would almost certainly hand the election to the Democrats.

General Comments

Feel free to post any comments here: about the Party, the web site, the Platform or whatever you would like to say generally. I will try to review and approve comments as quickly as possible so that everyone can see them.

Comments on Newt Gingrich

Newt is no Rick Santorum. 

Newt has some good fiscally conservative credentials, but his campaign has been very troubling to date.

At first it seemed that he was not really serious about it, that he was in it to plump up book sales and speaking fees. But he seems to have become the new anti-Mitt focal point and has the skills to be able to hold onto the position much better than his predecessors in the role.

There are two things that trouble me about Newt.

One was amply captured by a cartoon that I think appeared in the Economist, which showed Newt as a hand grenade with his own hand on the pin. He seems prone to making gratuitously inflammatory remarks for the fun of it. This makes for a very entertaining conversationalist, but I'm not sure it is a good characteristic in a world leader or, for that matter, a Presidential candidate.

The other thing that concerns me about Newt is that he has turned populist, attacking Mitt Romney for being a "vulture capitalist"  Putting aside the factual questions with regard to his attack on Romney, it suggests that Newt thinks businesses have an obligation to act as social welfare agencies.

It seems like Newt has gone from a candidate that did not care enough to one who, perhaps, cares too much. So much in fact that he is willing to adopt anti-free market populist rhetoric to stay in the race.

Comments on Santorum

I just finished reviewing Rick Santorum's record and he is what he says he is. Santorum to his credit is consistent.

He is also completely unelectable. A characteristic, if you believe the polls reported on Real Clear Politics, he shares with every other Republican candidate other than Romney.  Santorum is unelectable because he is a social conservative first and a fiscal or economic conservative second. If he wins the Republican nomination, which seems unlikely despite his surprising showing the the Iowa caucuses, it will be a Pyrrhic victory for the social conservatives.

His proposal on a lower corporate income tax on just "manufacturers," is illustrative of his light weight status as a fiscal conservative. He seems to be oblivious to the practical difficulty of implementing a tax change of this kind. He also seems to miss that fact that in the modern era many service industries can be outsourced rather easily. Philosophically, he seems to have adopted a social engineering approach to economic issues rather than accepting that the tax rates need to be low enough not to distort economic activity and allow markets to make judgements about the allocation of resources. Santorum acts like non-manufacturing activity is an externality, like pollution, that we somehow need to discourage.

I am not impressed.

Comments on Mitch Daniels reply to the State of the Union

It may seem to some that I am favoring the Republicans in the last few Blogs. That appears to be the case, because the Romney Plan, the State of the Union, and Mitch Daniels' response were overwhelmingly about US fiscal and economic policy.

Foreign policy is not a hotly contested issue in the US at the moment and I think most everyone is glad to see American troops returning from Iraq and the elimination of Al Queda's leadership.

I will be addressing Santorum in a Blog in the near future and I will not sound like an apologist for the Republicans when I do.

Back to Mitch Daniels.

I think my most negative reaction to Daniels was over his plan for means testing Social Security and Medicare.

Social Security its already means tested in terms of the formula for determining benefits which favors low income people. You could accomplish the objective of making the system more progressive (assuming that is what he wants to do ) much more simply by just leaning into that formula a bit and by raising the cap on the Social Security tax. Implementing a true "means test" tied to post retirement income and assets would be an administrative nightmare.

I think, but am not sure, that Daniels promotes the concept of means testing because he thinks the alternative is raising the income cap on the tax.

The theory of the income cap on Social Security is that folks who have income higher than the cap should save and invest for their retirements to supplement the Social Security benefits with enough to allow them to sustain their pre-retirement life styles into retirement. Eliminating the cap completely as some on the left would do changes a government mandated retirement income program, with a social welfare program inside of it, into a full fledged social welfare program. I think popular support for Social Security has always been tied to the, partly fictional, notion that it is the former rather than the latter.

I think that the New Independent Party's plan for protecting Social Security by gradually raising the retirement age makes a lot more sense than either means testing or raising the cap. In addition, it is completely consistent with the original intent of the program given increased life expectancies.

In the case of Medicare, I gather Daniels favors a voucher system similar to the one mentioned in our Platform. What I think his proposal misses by tacking on a means test is the opportunity to use the voucher approach more generally as a way of getting health care coverage available universally without exclusions for pre-existing conditions and without an individual mandate.

Comments on the State of the Union Address

With a day to think about it, I come  away from the State of the Union address with the feeling that it was mostly lightly veiled class warfare.

Take for example the proposal to tax those earning over $1 million a year at a minimum rate of 30% and to take away their deductions. Since those in this bracket who earn ordinary income are already paying the top marginal rate of 35% and have already lost many of their deductions, this plan is addressed at those like Warren Buffett and Mitt Romney who earn most of their income from investments. 

The odd thing is that President Obama mentioned earlier in the speech that America's corporate income tax rate is to high at 35%. Surely he must understand then that the income that these investors receive is taxed twice. It is taxed once at the corporate level and once at the personal level, which means that this group actually pays a top federal marginal rate of approximately 45%. If one includes state level taxes this number moves up well over 50%. If the President wanted to say that these people should pay taxes of more than 60% of their income from investments rather than 50%, he should have.  I don't think it would have quite as much popular appeal, but it would be honest.

It is possible, to give him the benefit of the doubt, that he would link lowering the corporate income tax to raising the capital gains and dividend tax rates on high income earners. But he never said that. If the President wants his rhetoric about governing for all Americans to be taken seriously, he needs to stop using the populist, class warfare approach and speak about taxation issues honestly.

Similarly the proposal to tax US corporations on overseas income, may sound like a winner to those who don't think the issue through. But surely he knows that US corporations don't have to remain US corporations. For those who do remain here paying these additional taxes will gradually squeeze these firms out of international markets, since they will not be able to compete for capital with firms in other countries who do not owe these taxes. Most countries in the developed world are moving in the other direction for precisely this reason. This is no secret.

With regard to his proposal to deny deductions to US firms that move their operations abroad and give tax credits to those who move operations to the US. This too is bad tax policy. It contorts an already contorted tax code even more. And it pushes US corporations to operate inefficiently to get tax benefits. This is not a good long-term strategy.

I can only think that his desire to give tax credits to manufacturing firms to the detriment of everyone else in the economy is driven by the fact that this benefits his allies in the labor unions disproportionately.

The increased spending on infrastructure would be fine, provided that he would agree not to require contracting rules that benefited unionized labor, which I doubt. I also fear the same motivation is behind his special task force on unfair trading practices from China. (not that there isn't some substance in those concerns.)

I could go on, but you get the drift. If one reads carefully between the lines his proposals are mostly about bad public policy that is meant to appeal to peoples envy of the rich and proposals to enrich his union constituency. This later motivation does appear to have been the driving force behind the auto industry bail out, that he touted last night.

When he does suggest a good public policy, like ending agricultural subsidies, he feels compelled to give it a class warfare twist by only ending them for the "millionaires."

I did find three proposals that I thought were unambiguously good:

1) Banning insider trading by members of Congress

2) Requiring the Senate to give an up or down vote on Presidential nominees in 90 days (although I'm not sure, operationally, how one would do that),

3) Making additional federal lands available for drilling (although his point on making frackers reveal their chemical components, seems gratuitous, since I think they already agreed to do this, recently.)

There were some other suggestions that were mostly air, like encouraging community colleges to coordinate with businesses, since, although it is a good idea, it is not really a federal issue.

There is a reason why the President had around an 80% approval rating when he took office: he promised to govern for all America. There is a reason why it is now in the 40's. He hasn't.

Just Finished Reading Mitt Romney's Plan

I just finished reading Mitt Romney's economic plan (the 59 point plan). I would agree with most of it. There are some significant areas of difference.

For one thing (as with all Republicans) he wants no increase in net tax revenue of any kind. Obviously we differ on that. Although our position is identical to his absent the externality taxes we discuss in the section on the form of taxes. At this point, I am aware of no political organization other than us that is proposing that alternative.

He is also pretty silent, in the plan, about how he intends to reform Medicare although he alludes favorably to the Ryan plan. I am not sure which Ryan plan he means though, I think the Ryan plan morphed after Mitt endorsed it. Can anyone confirm that?

On the whole in terms of economic policy there is no question that Romney matches up with the New Independent Party Platform better than Obama. I will see if there is a similarly coherent statement out of Newt to review. Any Comments?

The Education Platform

I just received some interesting comments on Education, so I am opening up this section of the blog especially for comments related to that portion of the Platform.

We went live today!

Until now the website has been under wraps. We have now finished all the regulatory requirements for launching, so I took down the password protection. If you know anyone who you think might be interested please pass the link along. Thanks to all of you who have provided comments and reviews of the web site during the early construction phase.


The end of subsidies for ethanol from corn!

The subsidy for ethanol from corn finally expired! It took way too long. This subsidy was bad public policy from both an energy and an agricultural point of view. In addition, by raising world grain prices it helped impoverish people living at the subsistence level world wide. Sadly, everyone familiar with the issue has known it was bad public policy from the beginning. The only reason this subsidy came into existence is because of the unique place of Iowa in American politics.

The key question going forward is: will the subsidy stay dead?  When oil prices fall, and eventually they will, if only temporarily, there will be calls to reinstate the subsidy. We can only hope that by then some state, other than Iowa, will be going first in the presidential primaries.

The Health Care section has been revised, comments welcome.

The Health Care plank has been revised. I am told it resembles the Swiss system for dealing with health insurance except that the system proposed here does not have an individual mandate.  It also has some things in common with the Wyden/Ryan plan. One significant difference between the Party's plan and the Wyden/Ryan proposal is that they suggest that the size of the voucher or credit be tied to the health status of the recipient. I view this as a huge bureaucratic complexity and unnecessary if the credit is large enough that the vast majority of people will choose to use it.

 Let me know what you think.

Just Finished Reading Tom Friedman's New Book: "That Used to be Us"

This book is interesting. It touches on many of the same problems identified on this web site. I agree with Friedman and his coauthor's conclusions about 80% of the time.

Among my differences are that I don't favor public funding of Research and Development as much as they do. It's not that R&D isn't important. But I have a problem with the federal government controlling the direction of R&D as much as it seems that they want to. Obviously, for the kind of basic research that NIH and the NSF support, the government will be a primary source of funding. But for things like the development stage of energy projects, I would favor increasing the price of the fuels we are trying to discourage through taxes and letting that provide the incentive, along with a lower corporate tax rate. This gets the government out of the way in terms of picking winners. Also it has to be remembered that government funded research quickly becomes public information, not just in the U.S. but world wide. So while this research may be a very good thing in terms of combating global warming, it does little to improve America's competitiveness.

Another difference may be the extent to which Friedman and his co-author believe that it is necessary to raise income taxes. They talk about the market-signaling advantages of a gasoline and carbon tax, but they seem to ignore the possibility of putting taxes like that to work to both lower the deficit and reduce taxes on work and investment.

Just Finished Reading Race Against the Machine

Just finished reading "Race Against the Machine" written by a couple of MIT professors. It addresses many issues directly related to those addressed in our platform. Their focus is on the impact of the IT revolution on productivity and income and wealth distribution. I find myself strongly agreeing with most of their plan for action, particularly those focused on education.

Comments have to be approved by the administrator before they show up.

Unfortunately with the blog software I am using here, comments have to be approved by the administrator before they show up. Go ahead and submit comments and I will try to quickly approve them. I will also look into letting comments appear automatically.

Party Logo

I need a party logo for the web site. Do you have any suggestions?

I think it should be an animal of some kind, since political parties world wide use animals as symbols. Ben Franklin apparently thought the turkey was a better symbol for America than the eagle. Franklin thought that the eagle was a scavenger, who let other animals do the work then swept in and stole their food. He also thought that the eagle was cowardly and could be frightened away by an attack from a sparrow. Unfortunately, the turkey carries a poor connotation today. Franklin also liked the rattlesnake, but I have a hard time warming up to that. The owl is taken by the Modern Whig Party, who, as an aside, are an interesting group. We could do the sparrow, but they have a reputation for aggression that we might not want to associate ourselves with.

I think instead that it should be Goya's sketch: "The Sleep of Reason" It shows a man with his head in his arms asleep being assaulted by monstrous animals. The quote in Spanish on the stone he is sleeping on is translated as "The Sleep of Reasons Produces Monsters."  Goya is a figure of the Spanish Enlightenment who felt that mankind's hope lay in reason and creativity.

Most of the web site is now functional (but we are still working on it).

Eventually passwords will be required to access the Voting pages for General and Governing Members. These pages will allow Governing Members to vote on the Platform, political candidates, and the Party's Board of Governors. General Members will also have the ability to vote their approval or disapproval of the Platform and Candidates, but these votes will not control the Platform or the Party's support for political candidates. The votes of the General Members will, nevertheless, be recorded and reported on the web site.

Hello Fellow Independent Voters!

Welcome to the New Independent Party Blog!

This blog is operated by Mike Barron, the Founder and Executive Director of the New Independent Party. The views expressed here do not necessarily reflect the views of the Party or its Board of Governors.

If you want to place a comment, please do. Comments have to be reviewed before they become public, but I will try to do so quickly and I will only edit out those that are offensive or unduly inflammatory. I am hoping for an honest exchange of ideas here.

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