Why The Supercommittee Was Doomed

It's confession time. The eventual outcome of the Joint Select Committee on Deficit Reduction, also known as "the Supercommittee", was so obvious that I wrote most of this blog two weeks ago. There was no reason why there would be an outcome other than failure.

The Supercommittee was composed of twelve members, evenly divided among the bicameral Congress and evenly subdivided among the two major political parties. It was supposed to be a tool for getting around the stalemate between the Democrat-controlled US Senate and the Republican-controlled US House of Representatives.

Senator Pat Toomey (R-PA)
Image via Wikipedia

There is a non-profit, non-partisan, conservative organization called The Club for Growth. It measures the economic policy votes cast by members of Congress. Members favor low tax rates, free trade, limited spending, repeal of the inheritance tax and regulatory reform among other things. You may or may not agree with their positions, but they issue a scorecard that is a convenient measuring stick for the comparison of the Supercommittee members' approach to taxes and spending.

In the following paragraph is a list of members, their home state and their party affiliation. In parenthesis are their lifetime Club for Growth ratings. I've included this as a way for readers to see where members stand relative to each other. Two members have not been in office long enough to have a rating. You may wish to know that Senator Toomey, one of those two members, is a former head of Club for Growth. So though Toomey does not have a rating, if you pencil in 100%, you would likely be very close.

In Defense of Capitalism

I hate to tell the Occupy Wall Street group (OWS) this, but not only do they not understand capitalism, they aren’t even the trendsetters of anti-capitalism. For years, American culture and tax policy has been at odds with the values of capitalism. It’s a pity, but it’s true and one can trace the majority of our current economic problems to that fact.

Wall Street, 1867
Image via Wikipedia

The basis of capitalism is self-denial; the intentional delay of gratification for the chance of a greater reward later. If you think this is still the core of our country’s values, then you haven’t been paying attention.

In order to generate capital, individuals have to consume fewer resources than they have available, meaning that they save rather than consume. Then those individuals must be willing to risk those savings to acquire the tools necessary to provide desired goods. If the individuals make poor decisions, or as our Commander-in-Chief calls them “bets”, then they will lose their investments. This means that their sacrifices were in vain, except for some new knowledge of what fails.

Capitalism is what people do when left alone. Anything other than capitalism is because of a government that restricts what people freely do. Even simple barter requires a saving of resources and an investment to obtain other goods. Simple farming was also capitalism long before tractors and center-pivot irrigation systems. Early farmers sacrificed the consumption of seeds in order to invest them in next year’s crop.

Is capitalism good? It rewards innovation and efficiency. It creates job opportunities and allows families to