Wednesday, December 19, 2012

My Letter to Speaker John Boehner



December 20, 2012

Rep. John Boehner
Speaker of the House
H-232 The Capitol
Washington, DC 20515

Re: Fiscal Matters
Dear Speaker Boehner,

As is well known, many of your members have signed pledges not to raise taxes under any circumstances, and a majority of legislators are lawyers.

1. Breach of Civic Duty

It is a standard feature of corporate law that, although shareholders may enter into voting agreements, directors may not contract away their vote, and doing so is a breach of fiduciary duty. They are required to act in the best interests of all shareholders, in keeping with novel and emerging conditions, and not bind themselves to any predetermined course of action.

If being a Member of Congress is like being a company director, then such pre-agreements are a clear breach of civic duty to act in the best interests of the country, in keeping with the facts as they emerge. Indeed, they are a commitment NOT to act in the best interests of our country.

2. Fundamental Reasons to Raise Taxes

Throughout history, governments have levied taxes to cover emergency or unusual situations, which may obviously include:

a.       War. If these wars were worth fighting, they were worth paying for, through direct taxes and not merely as a “Trojan Horse” to foster a fiscal crisis to cut social benefits.

b.      Economic Calamity. We are still recovering from the damage done by the financial crisis, triggered by lax regulation in the Bush-Greenspan years. Many 18-26 year olds are now unemployed and living in their cars. Our economy has long been dominated by the demand side, not the supply side. If consumers were spending, business would pick up, and tax revenues along with it. The Republican program to defeat Obama by leaving the economy mired in recession has failed. Responsible leaders would enact emergency taxes on those with surplus money, to prime the pump.

c.       Prior Improvidently Granted Tax Cuts. If tax cuts were going to stimulate the economy and create jobs, we would be drowning in jobs and growth by now. The Bush Tax Cuts for the wealthy were clearly a mistake, since the promises of jobs and growth have not materialized. Those who promoted these false, greedy ideas should be marginalized, and the cuts rolled back, since they have yielded no public good.

d.      Inability of the Wealthy to Deploy the Money. Not only are interest rates at record lows, harming savers, but meaningful investment opportunities are few and far between. Being rich makes you feel smart, rather than lucky. But apart from a few super wealthy, who can hire the best advisers, most everyone else is losing money. If the economy were running on all cylinders, there would be thriving businesses to invest in. Hence giving cash to the rich has been a foolhardy idea, since without a thriving economy, all they can do is sit on it, and complain about “uncertainty,” which is phony, since the main problem is the economic collapse, brought on by attempts by Wall Street to vastly overpay itself, relative to the “value” it was producing.

e.       Failure to Manage Health Costs. The “crisis” of Medicare is really a failure to bring health care costs in line with other developed nations. Rather than blame health care recipients, who have little to no bargaining power, Congress should either face down the greedy health providers and insurers, or raise taxes to cover their charges. Medicare Part D is a subsidy for drug companies, and taxes should have been raised to fund it. If you want tax reduction, first tackle cost reductions, which should be trivial since other nations pay half or less, then reward yourself based on success.

3. Failure to Govern

The point of government is not to borrow large amounts of money, make special payouts to a few, and then bankrupt the company (country). Rather than pander to powerful interests, the job of national leaders is to manage those interests for the common good, a concept formerly known as “statesmanship.”

On this point Obama is equally as guilty as Congress. He has apparently never seen a powerful person or program he didn’t feel like bowing down to, no matter how illegitimate or pernicious. You likewise have allowed yourselves and your values to be bought by persons whose ideologies cannot help America, and obviously harm it.

The game is over, and the new non-white majority assembled by Obama will demand and get the necessary transition, to politicians acting responsibly rather than as handmaidens, even if it must replace both yourselves and Obama to achieve it.

There is still time to act responsibly. Please do so.

Respectfully,

Frank W. Sudia
Hagerstown, MD

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