Category Archives: tax related issues

the cost of our system

National Security

National Security

The United States Intelligence Community (IC) is a group of 17 separate United States government intelligence agencies, that work separately and together to conduct intelligence activities to support the foreign policy and national security of the United States. Member organizations of the IC include intelligence agencies, military intelligence, and civilian intelligence and analysis offices within federal executive departments. The IC is overseen by the Office of the Director of National Intelligence (ODNI), which itself is headed by the Director of National Intelligence (DNI), who reports to the President of the United States.

Among their varied responsibilities, the members of the Community collect and produce foreign and domestic intelligence, contribute to military planning, and perform espionage. The IC was established by Executive Order 12333, signed on December 4, 1981, by U.S. President Ronald Reagan.

The Washington Post reported in 2010 that there were 1,271 government organizations and 1,931 private companies in 10,000 locations in the United States that were working on counterterrorism, homeland security, and intelligence, and that the intelligence community as a whole includes 854,000 people holding top-secret clearances. According to a 2008 study by the ODNI, private contractors make up 29% of the workforce in the U.S. intelligence community and account for 49% of their personnel budgets.

The government funded agencies are:

Agency Parent Agency Federal Department Date est.
Twenty-Fifth Air Force United States Air Force Defense 1948
Intelligence and Security Command United States Army Defense 1977
Central Intelligence Agency none Independent agency 1947
Coast Guard Intelligence United States Coast Guard Homeland Security 1915
Defense Intelligence Agency none Defense 1961
Office of Intelligence and Counterintelligence none Energy 1977
Office of Intelligence and Analysis none Homeland Security 2007
Bureau of Intelligence and Research United States Department of State State 1945
Office of Terrorism and Financial Intelligence none Treasury 2004
Office of National Security Intelligence Drug Enforcement Administration Justice 2006
Intelligence Branch Federal Bureau of Investigation Justice 2005
Marine Corps Intelligence Activity United States Marine Corps Defense 1978
National Geospatial-Intelligence Agency none Defense 1996
National Reconnaissance Office none Defense 1961
National Security Agency/Central Security Service none Defense 1952
Office of Naval Intelligence United States Navy Defense 1882

In addition, there are several other agencies responsible for, National Security. Not listed above are the Federal Bureau of Investigation, the Secret Service, Office of the Director of National Intelligence (2001), the DEA, Dept of the Treasury office of Intelligence and Analysis & Army Intelligence.

I am certain that all of these agencies are doing wonderful work, but does it really take 23 separate agencies to perform national security and intelligence gathering? Are any of these agencies territorial? Do they freely share all of their information with other agencies? I’ll leave you to ponder the answers.

What I do know is that these agencies were founded at different times and for different reasons and are funded via different budget requests. I wonder if our security could be performed more efficiently and at a much lower overall cost? If we hade zero security today and were building an organization from scratch would it look like what we have today?

Short vs. Long Term

Short vs. Long Term

One significant issue that has kept us from maintaining our elite status, as a country, is that we have had a very short-term focus. Most public companies tend to make decisions that maximize their performance from one quarter to the next. Many political decisions are made to support special interest contributors’ short term profits ignoring the consequences to the longer-term cost to the economy and resource availability.

One good example is the low price of fuel, which ignores the cost to maintain the transportation infrastructure. Does it make sense to encourage the sale of fossil fuels when all of the experts recognize that this resource is limited? The only disagreement is just how much time remains before exhausting this resource. Would longer-term thinking dictate that higher fuel taxes with proceeds dedicated to infrastructure improvements make more sense?

Another example is the out of control Federal spending that tends to satisfy current political agendas but which mortgages the future for many generations to come. The facts are that our internal population in both aging and is declining. Our total population continues to grow slightly via immigration, but our workforce continues to decline even with the addition of folks from other countries (both documented & undocumented). The decline means there are fewer workers to pay taxes to support spending, especially as it relates to social security & Medicare. The fact that healthcare costs have accelerated out of control and many times faster than wages adds to the problem.  Average wages have only increased slightly since 2000, from $30,756 to $33,229 or less than 9%. For that same period, the median cost of a new house has increased from $165,814 to $315,815, or over 95%. During that same period, the cost of healthcare and advanced education have almost tripled! We started mortgaging the future several decades ago, and we are already experiencing the results.

There are many other examples, but one of the most recent was the tax reduction. It was deficit funded and is currently adding $150 Billion of red ink every year and will continue to do so for the next ten years. Not only will future generations have to pay the price, but the middle class did not receive their fair share of this redistribution of income. Our National debt is well on the way to $23 trillion and will reach that level early in 2020. Currently, we are adding $1 million to our debt every 35 seconds! Two years ago, we were running an annualized deficit of approximately $800 Billion. Today that is running $990 Billion. Believe it or not, that is the good news. The level of unfunded liabilities for all the budget area commitments now exceeds $125 trillion. These are costs that we have committed to pay but which we have not identified any revenues to support the costs. The unfunded liability for just one item, Medicare, exceeds $30 trillion.

Healthcare Revisited – A simple solution to 2 problems

  • Healthcare Revisited – A simple solution to 2 problems

As the Democratic contenders vie for the nomination “Healthcare” is again one of the more significant topics. Medicare for all, private option and other variants are being proposed. My view is that no candidate is willing to confront the real issue with our broken healthcare system. I strongly believe that healthcare should be a right of citizenship and permanent residency. However, as a fiscal conservative I cannot support a solution that adds to our out of control National Debt.

When searching for solutions to any problem I favor two approaches. First, start by working “upstream”. By this I mean search for the cause of the problem. Once you determine that cause keep working on additional factors that are contributing to the it. The US has by far the highest cost of healthcare, per capita, of any country in the world. Our costs are almost three times the average for the EU countries without the corresponding benefit of better quality of care. What is causing the problem and why are we not addressing solutions?

There are several factors that contribute to out of control costs. Among them are the role of insurance companies, drug costs, hospital costs, physician compensation, obesity rates and legal factors. These areas have been thoroughly addressed in several earlier posts on this topic.

The second method that I advocate for problem solving is a technique called “base-lining”. What this means is to investigate other systems that are yielding positive results and learning how to benefit from the experience of others. There are several countries’ systems that are worth investigating that have a higher quality of care at less than half the per capita cost.

Solving the cost issue would more than cover the cost of proving healthcare for all and would also significantly reduce the out of balance national budget deficit. One solution to improve, if not solve, two problems.