The Fiscal Diemma, by T.S.Khanna, 1-13-2013

Foundation for Better Government

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January 13, 2013..

The Fiscal Dilemma

By T.S.Khanna, January 13,2013.

The truth, rare as it is its supply is usually greater than its demand, especially in the power circles.  Our confusion is confounded by the conflicting truths (facts) given out by various “reliable sources”.

Assuming Rana Foroohar’s facts are correct in the January 14, 2013 issue of TIME, the solution to fiscal crisis is in sight, if personal and party interests are set aside for the sake of national interest.

The US corporations have 1.7 trillion dollars in foreign earnings kept abroad to avoid higher rate of taxation, 35%, in the US as compared to 12.5% in Ireland.  Competitive tax rate can certainly bring in the most needed capital in the US to create jobs and perk up the economy.

However, the apprehension expressed by Warren Buffet and Prof. Clausen is that if the corporations operate under lower tax rate, they will outsource the jobs.  There is an implied blame on the corporations without exploring the reasons.

The goal of every business is to maximize profit for the investors.  It is natural that corporations should seek out places with competitive taxes and wages.  With globalization of the economy, the US is no longer a world apart, but there is a lag in adjustment of its economic policies.

Instead of blaming the corporations, the government must adopt competitive tax rate and the unions, competitive wages.  The capital and the jobs will come back.  The corporations will flourish and the wealth producing workers will be encouraged.

Supreme Council for the USA By T.S.Khanna,Jan.5,2013

Supreme Council for the USA.

T.S. Khanna, January 5, 2013.

The US Congress seems to be under a perpetual snow storm.  It keeps spinning its wheels without moving.  It was designed to be the fountainhead of the U.S. government but it has turned into a stagnant pool of highly paid “do-littles”.

Well intended checks and balances have turned into unintended deadlocks and gridlocks by the growing ideological polarization of the political parties.  Representative democracy has created tribal politics splitting the nation by intense partisanship.  There is no accountability for collective irresponsibility or for delivering timely and quality product.  There is no organization with an overview of and responsibility for protecting and promoting the national interest.

 At the inception of U.S. government, the Senate was created at the insistence of smaller states supporting slavery.  They wanted equal voting power in the Congress as a safeguard against abolition of slavery.  The senators were elected by the state legislatures as their reps at the federal level.  To eliminate corruption by the State legislators, this procedure was changed to election by popular vote by the Seventeenth Amendment of the Constitution.  Another function of the Senate was to provide a cooling off period for the House of Reps (lower House) decisions.

The Senate has long outlived its intended purpose and functions.  Now it is only a duplication of representation.  The heated up Senate is unable to cool off the lower House. 

The present process of appointing the Supreme Court judges is highly partisan influencing their attitude.

The two-year term for the lower House members is cumbersome and expensive. They are constantly concerned about the next election.  They are beholden to the lobbyists.

Democratic principles require that power be divided with checks-balances.  Yet, over the years, the US President has emerged as the most powerful single person in the free world.  Many of his powers are not constitutional, they are conventional.  At every presidential election, the cleavage between the parties and the citizens becomes deeper and more intense.

In view of the above, I call upon “Political Pandits” (scholars) to consider the following suggestions:

• Establish a 15-member non-partisan Supreme Council.  The non-partisan members may be elected from fifteen zones created by intelligent grouping of the states, promoting national integration. The Supreme Council may be designed to counter the divisive politics of representative democracy.
• Abolish the Senate, transferring all its responsibilities and functions to the proposed Supreme Council.
• Make the lower House a unicameral congress with only one six-year term for its members; one third members to retire every two years, like in the present Senate.
• The Supreme Council to have the powers to over-rule the dead-locks (beyond the prescribed dead-lines) of the congress for taking timely decisions in the national interest.
• The present offices of the president and the vice president may be absorbed by the President and the Vice-President elected by the Supreme Council every two years, doing away with the expensive and divisive presidential election by the general public.  All the present presidential powers to be exercised with the approval of the Supreme Council.