Volume 3, Issue 34

Although there have been 17 shutdowns since 1977, this is only the second time in our history that Congress has threatened not to raise the debt ceiling, which would result in a potential default or at least slowdown on paying U.S. debts and could occur as soon as October 17. We all know what happened when Congress came to the edge of this cliff in 2011 — Standard & Poor’s lowered the perfect AAA rating enjoyed by the U.S. since such ratings have been in place — and the stock market took a significant hit (down 20% in the following months).

And that was without going over the cliff — markets reacted to the uncertainty created by a dysfunctional Congress in bringing the U.S. up to that edge.

Yes, we need to get our fiscal house in order, but threatening the full faith and credit of the U.S. is not the way to do it.

That said, something is telling us to balance our budget now, get creative about finding ways to be more efficient. The handwriting on the wall is saying it’s finally time to stop kicking the can down the road.

Meanwhile the first manifestation of our leadership is not to get creative and solution- oriented, but to continue the finger pointing. This just wastes time during an emergency, which seems practically a treasonable offense.

Too bad Congress keeps getting paid while other Federal workers are laid off. The surest way to concentrate their minds on solutions would be to embargo their pay. However, there is no time to consider options that would take too much time to activate; it is a time to be pragmatic about what can realistically be done quickly. Making Congress more accountable is something that should be tackled long range, not now.

This is the kind of challenge that can bring out the best in people. First they have to get past the anger and blame, the natural first reactions. Those with the right stuff will get past those predictable but useless reactions the fastest. And on to solution thinking and creativity. Not just passionate speeches.

Creativity in government is almost an oxymoron. Old ideas are hauled back out again whenever any challenge arises. The print/digital newsweeklies bring to light more creative ideas about what governments can do than government leaders themselves offer, despite hardworking staffs generating some creativity that I suspect runs into walls.

Scenarios that we would like to see, things each of us can do right now to help out in this crisis:

1. Citizens write to advise each of their representatives that they will not get another vote unless they stop the blame game and start leading with creative solutions. (My great friend and lifelong mentor Norm Hecht writes: “The founding fathers did not foresee professional politicians. [Tighter] Term limits needed, otherwise giveaways get them elected.”)
2. Citizens set up a website where people could pledge voluntary donations to the Federal government. (Better yet, a highly-visible news or other organization takes on the job of publicizing and handling the compilation of pledges.) I will pledge an extra $2000/year over taxes until the budget is balanced. I would hope richer folk, corporations and even wealthy nonprofits would pledge donations at many higher orders of magnitude. Maybe some people from other countries would pledge too — America is still an important part of many people’s dream for what the world will be someday. If the donations equate to an average of $1000 for every person in the USA, that would be about $300 billion/year extra revenue to help the turnaround happen faster. I’m sure most of us remember the climax of the great Frank Capra classic “It’s a Wonderful Life” where the townsfolk appear out of nowhere with money that had been stuffed in their mattresses to bail out Jimmy Stewart’s hometown bank.
3. The U.S. does not accept volunteers working without pay because of the potential liability that these people will demand later to be paid for the work they did. This policy should be changed using release forms as the mechanism to remove that liability issue. People who can’t afford to pledge money could pledge their time if they can.
4. Since a large part of the shutdown is the Republican desire to thwart Obamacare, doctors and other health care professionals who have new health care ideas should step forward and speak up publicly, offering their recommendations for improving the existing Obama law. This could contribute to conflict resolution between the parties. Crystal Run Healthcare in Middletown NY is one example of how doctors are taking the lead in the development of accountable, data-driven, efficient and effective health care. Let’s rechannel the idea of destroying universal health care into refining the plan so that all can support it.
5. Each department in government should be mandated to write a plan to become more efficient and deliver more for less, and to write this plan in the next week. They need to be given a target e.g. 20% saving, or whatever the economists determine is the needed reduction for year one in order to reach a balanced budget and declining debts by x date. Tax revenues need a shot in the arm too, which realistically can only come from removing tax protections enjoyed only by the people and corporations who need them the least, i.e. by adopting whatever adjustments Warren Buffett might propose. This efficiency activation has been proposed many times before and never implemented except at state and local levels as a result of Federal cuts. But the need has never been as pressing as it is now.
6. A week later all efficiency plans and voluntary donation pledges should be summed up in the news media, and a government consensus forecast should be issued, showing the year not too far off when the U.S. government is fiscally back on track again, not increasing but paying down debt. Any departments whose plans fail to achieve the targeted percentage will be exposed to criticism, a point which should be made in advance.
7. Efficiency will probably mean temporarily having higher unemployment as Federal jobs are cut. Plans will be needed for retraining and helping these people find jobs mostly in the private sector, except for urgent infrastructure rebuilds, which can effectively be done by any sector as demonstrated by FDR.
8. Long-term changes emanating from such a new plan would include using the schools to better prepare individuals to discover the work at which they would excel and be happiest. This would include work-study programs with internships in the summer and at other times during the school year, with the goal of helping people find careers and jobs earlier in life that will make them happier and more successful.
9. Other long-term implications of the new plan might be to push down many non-military government functions to more local levels where it will be easier to find creative solutions for challenges such as taking people off of Federal welfare rolls by providing local government roles and helping to connect to nongovernment jobs they can usefully perform. This stuff is much easier among neighbors. Plato believed that city-states would lose the ability to manage complexity as soon as the Polis grew to over 1000 people. The degree of built-in inefficiency of trying to manage 300 million people across so many aspects of life demands a more massively parallel approach with distributed tasks rather than centralized ones.
10. Based on the hopeful soundness of this plan and its wide nonpartisan support, we will have showed the world — and ourselves — once again what we are made of.
11. With our own confidence restored, we might find it the right move to increase the debt limit slightly right now, but with declining limits over time to ensure that the efficiency plan is followed.
12. In the context of these positive changes, if it still becomes necessary to delay debt payments slightly, the world should not overreact. The idea of prioritizing certain debts over others has already been criticized by Wall Street as undermining confidence in America forever, and this is the last thing the world needs. The debt ceiling has to be raised, and the only responsible way to do that is with an efficiency plan to turn the whole situation around, a plan that requires the best minds to be heard in an organized and fast process. This should be facilitated by the highest digerati giving up sleep for the next month if necessary to collate all the ideation.

Can something like this be what actually happens?

What is the alternative?

Best to all,

Bill

P.S. I’ll be signing the latest edition of my book MIND MAGIC at the Inquiring Minds Bookstore in New Paltz, NY on Sunday, October 13 between 4 and 5 PM. Please stop by if you are in the area.

Follow my regular blog contribution at Jack Myers Media Network: In Terms of ROI. It is in the free section of the website at  Bill Harvey at MediaBizBloggers.com.