- Joined
- Jul 24, 2008
- Messages
- 33,627
- Points
- 0
[h=2]The genius in the US Fiscal Cliff and its relevance to S’pore[/h]
December 22nd, 2012 |
Author: Contributions
However, as time passes, the memories of the large angry crowds at opposition rallies start to fade, the PAP govt slowly falls back to its pattern of 'business as usual'.
USA has borrowed too much money and worries about the size of its debt has led to a general consensus among law makers and the population that something has to be done. The US govt spends much more money than it collects every year so mathematically there are only 3 things you can do to solve the problem 1. Increase Revenues by raising taxes 2. Spending less money 3. Do a bit of both – increase revenues and spend less. Option 1 is very painful for the Republicans because it involves raising taxes on the richer citizens by a lot and option 2 means deep cuts in social spending which is too painful for Democrats. Democrats have the White House and Republicans control the Congress so nobody can force either 1 or 2 on the other side. So option 3 seems to be the way to go and that is what the US public wants based on surveys done.
Option 3 requires each side to sacrifice something which is against ideological beliefs. There is also the problem of support base – the Republican support base will never support anything tax hikes while the Democrats’ support base will never support any cuts in social spending. If they compromise, their supporters will feel betrayed because they are so deeply and stubbornly locked into beliefs. If they negotiate, no compromise will emerge because neither side will agree to any sacrifice and the whole negotiation will be deadlocked. So what does it take for both sides to give way? To bring both sides together and overcome their ideological hurdles, they have to see disaster or crisis looming to force them to act together to solve the problem. That is what the Fiscal Cliff is - it is designed to be an artificial disaster to force both sides to agree. In Aug 2011, after the acrimonious US debt ceiling talks, they agreed to create this man-made crisis in order to force both sides to come to a compromise:
“On August 2, 2011, Congress passed the Budget Control Act of 2011as part of an agreement to resolve the debt-ceiling crisis. The Act provided for a Joint Select Committee on Deficit Reduction (the “super committee”) to produce legislation by late November that would decrease the deficit by $1.2 trillion over ten years. When the super committee failed to act,[14] another part of the BCA went into effect. This directed automatic across-the-board cuts (known as “sequestrations“) split evenly between defense and domestic spending, beginning on January 2, 2013. Also, theAffordable Care Actimposed new taxes on families making more than $250,000 a year ($200,000 for individuals) starting at the same time” – Wikipedia[Link]
The Fiscal Cliff consists of large increases in taxes and big cuts in social and military spending…and will likely plunge the US economy into recession. It demands heavy sacrifices on both sides unless they are able to compromise. It also provides both sides with justification to supporters that the compromises they make are necessary to avoid the Fiscal Cliff which has deeper social spending cuts and higher tax increases. Without the crisis or threat of crisis, political leaders sometimes find it hard to make changes that run counter to the beliefs and expectation of their support base. The compromise represents the middle ground that most Americans want.
“Our policies, our measures, those we must update, you must revise and look at it afresh…..”
“We have to represent the middle ground of Singapore. It’s becausewe have had a middle ground in Singapore, we are able to have a dominant party and consensus politics because more or less in Singapore, whether in a three or five-room flat, you are part of a country and your interests are the same and your identity is about the same.” – Lee Hsien Loong to activists [Link]
PM Lee recently spoke to PAP activists telling them that PAP “has to represent” the middle ground in Singapore to remain the dominant party – you notice he chose to use the word “update” policies rather than “change” when he talks to his activists. In recently years, more and more Singaporeans have began to feel that that the interests of the PAP have diverged from their own. The middle ground is not only shifting it is thinning out. There is less middle ground to stand on as inequality in our society increases and for many issues, there is no middle ground left to stand on. PAP’s problem is not just one of finding the middle ground but creating enough middle ground to stand on. Just like the Republicans and Democrats in America, its supporters want the PAP to stay the same and stick to the policy principles that represents the PAP ideology.
For years now, the PAP has pursued pro-business, trickle down economics and allowed the income gap to expand to be the highest (sometimes 2nd highest) among developed countries. Whenever possible, it spend money on tax cuts for the corporations and wealthy – these included corporate tax cuts and elimination of inheritance tax – rather than social spending even as income inequality expanded and poverty rose.
Despite a very pro-business and clearly lopsided policy to import foreign labor to the highest level per capita in the developed world, minor changes implemented in 2012 by the PAP govt were greeted by resistance by corporations that have become dependent on foreign labor. Even small changes are resisted as certain groups feel they are entitled to hire workers from where-ever they want, hire and fire as they please sometimes paying wages that is insufficient for workers to live on. Today 400,000 Singaporean workers are put on Workfare [Link] just to keep them afloat and taxpayers are made to pay for the outcomes of these policies as corporate profits rise to record levels relative our GDP.
When PM Lee spoke to his own activists, he felt that he needed to remind them about the middle ground because for many of the PAP supporters their perspectives have been shaped by the benefits the derived from the system. They feel the system is good because they have done well. Many benefited from generous scholarships, employment in GLCs or civil service still able to dish out various benefits not enjoyed by the ordinary Singaporean. Those who are part of the system (the PAs, SAF, NTUC etc) who enjoy good medical benefits and rising wages cannot see that the system that has worked well for them is not working well for a growing number of ordinary Singaporeans. It is always easier to argue that someone else should sacrifice and be the losing end of any policy trade-off…especially those without any power or voice.
The PAP govt- unchecked, un-moderated, dominant and armed with propaganda – evolved unbalanced policies but change is not going to be easy even as the problems pop up one by one and become painfully obvious to ordinary Singaporeans . Those who have benefited and want to continue to benefit from PAP policies now form their support base making change difficult….even as the middle ground shifts and voters swing away from the PAP.
Right now solving the main problems in housing, transport and healthcare has turned into almost intractable puzzles for the PAP govt. Another year has gone by and these problems have only worsened exacerbating the effects of the income gap. A home is less affordable now that it was at the beginning of the year. A car is now less affordable for the middle class family some of whom now have to take the public transport and service quality for public transport hasn’t improved…. but Minister Liu is now talking about fare hikes next year citing rising costs. It will be a bigger challenge now compared with the past to get people to accept a fare hike because real wages for a large segment of the population has remained stagnant and the public transport companies are still highly profitable. Healthcare costs keep rising at a rate above median income increase and the lack of universal healthcare to ensure good affordable healthcare means there is rising financial risk for those who are under-insured, those who are uninsured due to pre-existing conditions or facing financial difficulties – the PAP govt’s approach to shift as much financial burden to the sick and their families has led to ordinary Singaporeans having the highest %out of pocket payment and the highest % share of healthcare expenditure (vs govt healthcare expenditure) [Link]. The middle ground shrinks as the middle class shrinks due to relentless rise in housing, transport and healthcare costs.
We saw some sense of urgency to effect change shortly after the 2011 GE when the loss of votes provided a wake up call for the govt. However, as time passes, the memories of the large angry crowds at opposition rallies start to fade, the PAP govt slowly falls back to its pattern of ‘business as usual’. The motivation for change fades and the PAP convinces itself their system works fine and all it needs to make some “adjustments” and tweaks and the system can again deliver the goods. It now conducts the National Conversation which seems to be going nowhere – a new Gallup poll has found Singaporeans to be least positive people in the world out of 148 countries. What we need is leadership not conversation to break out of our current trajectory. But in the absence crisis, real change is hard as thick ideological lenses obscures rationality.
For the US Republicans, they feel that taxes for the rich is too high even it is at the lowest when it is the lowest since World War 2. They refuse any cuts in defense spending even though the US spends more on defense that the rest of the world combined. Their plans, vision and actions are checked and balanced by the existence of a strong political opponent and a president from the other side. The PAP has turned Singapore into the 2nd most militarized state in the world[Link] with its high defense spending that exceeds the combined defense expenditure of our 2 closest neighbors. Under the PAP, Singapore has the lowest tax rates in the developed world and more elderly workers than you will seeany other developed country and sometimes people from developed countries are shocked by the number of elderly workers they see in Singapore. While this, along with inequality and financially burdening the sick are intolerable for many of us, the PAP operates on another set of values and principles. Solving our public transport problem so the it would broadly benefit Singaporeans would require the PAP to put service quality and affordability above the need for public transport companies to generate profits but this is not something that the PAP can or will do easily.
In GE2011, Singaporeans sent a clear signal that they want change. If that signal wasn’t clear enough another was sent during the PE when the majority of the people voted against the PAP endorsed candidate. In a BE (by election) scenario where people are not afraid of an abrupt destabilizing change of govt, they won’t be afraid to vote to signal a desire for change hence it is likely that another clear signal will be sent in Ponggol East SMC BE when it held…. that is if the opposition avoids a 3 corner fight. Unfortunately, all these signals will not be sufficient to move the PAP to make fundamental changes. Just like the National Conversation that started ambitiously with “no sacred cows” slowly become constrained and shackled by what the PAP cannot accept ideologically and started going in circles. In Japan, LDP seriously reformed itself after its election defeat to engineer a comeback, in Malaysia, heavy losses in the 2008 election and the threat of a defeat in 2012 pushed the UMNO govt to make progress in areas of human rights and democracy. There are 10 more days to the US Fiscal Cliff and both parties are still holding out refusing compromises that is against their ideology. President Obama reminds them the middle ground lies neither with the Republicans or the Democrats both sides needs to give up something that is fundamentally against their values and principles to reach this middle ground…and is only possible when both parties meet halfway neither side getting 100% of what they want.
In Singapore we have a dominant govt and a one party system. We have been under this system for more than 4 decades resulting in extremes not seen anywhere else in the developed world. In the past, with propaganda and control of the media, the PAP govt has been able to persuade ordinary citizens to accept its approach. However, in recent years, as a result of the Internet and increasing number of ordinary Singaporeans now understand how unbalanced PAP policies are and the middle ground is shifting steadily away from the PAP. However, with its ideology entrenched among so many of its supporters, change is not easy without a crisis. Without demonstrating the ability to make fundamental changes, the PAP tells us there is no need for a 2-party system or a multiparty system..the PAP can find the middle ground without a strong opposition presence. Listening to the National Conversation, listening to what the PAP and its supporters are saying and looking at the changes the PAP govt has been willing to make…
I think they are very very far from the middle ground and the growing frustration will lead to more support for the opposition until a sense of crisis if felt by the PAP and its supporters… only then will you see real changes that will significantly benefit ordinary Singaporeans and their families.
.
Lucky Tan
* Lucky Tan is an avid online blogger since 2005. He likes to study the thoughts of Singapore leaders and the laws of Singapore. He blogs at http://singaporemind.blogspot.com.
.
</EM></EM>Rate this (26 Votes)
<META content=4.42307692308 itemprop="ratingValue"><META content=26 itemprop="ratingCount">
USA has borrowed too much money and worries about the size of its debt has led to a general consensus among law makers and the population that something has to be done. The US govt spends much more money than it collects every year so mathematically there are only 3 things you can do to solve the problem 1. Increase Revenues by raising taxes 2. Spending less money 3. Do a bit of both – increase revenues and spend less. Option 1 is very painful for the Republicans because it involves raising taxes on the richer citizens by a lot and option 2 means deep cuts in social spending which is too painful for Democrats. Democrats have the White House and Republicans control the Congress so nobody can force either 1 or 2 on the other side. So option 3 seems to be the way to go and that is what the US public wants based on surveys done.
Option 3 requires each side to sacrifice something which is against ideological beliefs. There is also the problem of support base – the Republican support base will never support anything tax hikes while the Democrats’ support base will never support any cuts in social spending. If they compromise, their supporters will feel betrayed because they are so deeply and stubbornly locked into beliefs. If they negotiate, no compromise will emerge because neither side will agree to any sacrifice and the whole negotiation will be deadlocked. So what does it take for both sides to give way? To bring both sides together and overcome their ideological hurdles, they have to see disaster or crisis looming to force them to act together to solve the problem. That is what the Fiscal Cliff is - it is designed to be an artificial disaster to force both sides to agree. In Aug 2011, after the acrimonious US debt ceiling talks, they agreed to create this man-made crisis in order to force both sides to come to a compromise:
“On August 2, 2011, Congress passed the Budget Control Act of 2011as part of an agreement to resolve the debt-ceiling crisis. The Act provided for a Joint Select Committee on Deficit Reduction (the “super committee”) to produce legislation by late November that would decrease the deficit by $1.2 trillion over ten years. When the super committee failed to act,[14] another part of the BCA went into effect. This directed automatic across-the-board cuts (known as “sequestrations“) split evenly between defense and domestic spending, beginning on January 2, 2013. Also, theAffordable Care Actimposed new taxes on families making more than $250,000 a year ($200,000 for individuals) starting at the same time” – Wikipedia[Link]
The Fiscal Cliff consists of large increases in taxes and big cuts in social and military spending…and will likely plunge the US economy into recession. It demands heavy sacrifices on both sides unless they are able to compromise. It also provides both sides with justification to supporters that the compromises they make are necessary to avoid the Fiscal Cliff which has deeper social spending cuts and higher tax increases. Without the crisis or threat of crisis, political leaders sometimes find it hard to make changes that run counter to the beliefs and expectation of their support base. The compromise represents the middle ground that most Americans want.
“Our policies, our measures, those we must update, you must revise and look at it afresh…..”
“We have to represent the middle ground of Singapore. It’s becausewe have had a middle ground in Singapore, we are able to have a dominant party and consensus politics because more or less in Singapore, whether in a three or five-room flat, you are part of a country and your interests are the same and your identity is about the same.” – Lee Hsien Loong to activists [Link]
PM Lee recently spoke to PAP activists telling them that PAP “has to represent” the middle ground in Singapore to remain the dominant party – you notice he chose to use the word “update” policies rather than “change” when he talks to his activists. In recently years, more and more Singaporeans have began to feel that that the interests of the PAP have diverged from their own. The middle ground is not only shifting it is thinning out. There is less middle ground to stand on as inequality in our society increases and for many issues, there is no middle ground left to stand on. PAP’s problem is not just one of finding the middle ground but creating enough middle ground to stand on. Just like the Republicans and Democrats in America, its supporters want the PAP to stay the same and stick to the policy principles that represents the PAP ideology.
For years now, the PAP has pursued pro-business, trickle down economics and allowed the income gap to expand to be the highest (sometimes 2nd highest) among developed countries. Whenever possible, it spend money on tax cuts for the corporations and wealthy – these included corporate tax cuts and elimination of inheritance tax – rather than social spending even as income inequality expanded and poverty rose.
Despite a very pro-business and clearly lopsided policy to import foreign labor to the highest level per capita in the developed world, minor changes implemented in 2012 by the PAP govt were greeted by resistance by corporations that have become dependent on foreign labor. Even small changes are resisted as certain groups feel they are entitled to hire workers from where-ever they want, hire and fire as they please sometimes paying wages that is insufficient for workers to live on. Today 400,000 Singaporean workers are put on Workfare [Link] just to keep them afloat and taxpayers are made to pay for the outcomes of these policies as corporate profits rise to record levels relative our GDP.
When PM Lee spoke to his own activists, he felt that he needed to remind them about the middle ground because for many of the PAP supporters their perspectives have been shaped by the benefits the derived from the system. They feel the system is good because they have done well. Many benefited from generous scholarships, employment in GLCs or civil service still able to dish out various benefits not enjoyed by the ordinary Singaporean. Those who are part of the system (the PAs, SAF, NTUC etc) who enjoy good medical benefits and rising wages cannot see that the system that has worked well for them is not working well for a growing number of ordinary Singaporeans. It is always easier to argue that someone else should sacrifice and be the losing end of any policy trade-off…especially those without any power or voice.
The PAP govt- unchecked, un-moderated, dominant and armed with propaganda – evolved unbalanced policies but change is not going to be easy even as the problems pop up one by one and become painfully obvious to ordinary Singaporeans . Those who have benefited and want to continue to benefit from PAP policies now form their support base making change difficult….even as the middle ground shifts and voters swing away from the PAP.
Right now solving the main problems in housing, transport and healthcare has turned into almost intractable puzzles for the PAP govt. Another year has gone by and these problems have only worsened exacerbating the effects of the income gap. A home is less affordable now that it was at the beginning of the year. A car is now less affordable for the middle class family some of whom now have to take the public transport and service quality for public transport hasn’t improved…. but Minister Liu is now talking about fare hikes next year citing rising costs. It will be a bigger challenge now compared with the past to get people to accept a fare hike because real wages for a large segment of the population has remained stagnant and the public transport companies are still highly profitable. Healthcare costs keep rising at a rate above median income increase and the lack of universal healthcare to ensure good affordable healthcare means there is rising financial risk for those who are under-insured, those who are uninsured due to pre-existing conditions or facing financial difficulties – the PAP govt’s approach to shift as much financial burden to the sick and their families has led to ordinary Singaporeans having the highest %out of pocket payment and the highest % share of healthcare expenditure (vs govt healthcare expenditure) [Link]. The middle ground shrinks as the middle class shrinks due to relentless rise in housing, transport and healthcare costs.
We saw some sense of urgency to effect change shortly after the 2011 GE when the loss of votes provided a wake up call for the govt. However, as time passes, the memories of the large angry crowds at opposition rallies start to fade, the PAP govt slowly falls back to its pattern of ‘business as usual’. The motivation for change fades and the PAP convinces itself their system works fine and all it needs to make some “adjustments” and tweaks and the system can again deliver the goods. It now conducts the National Conversation which seems to be going nowhere – a new Gallup poll has found Singaporeans to be least positive people in the world out of 148 countries. What we need is leadership not conversation to break out of our current trajectory. But in the absence crisis, real change is hard as thick ideological lenses obscures rationality.
For the US Republicans, they feel that taxes for the rich is too high even it is at the lowest when it is the lowest since World War 2. They refuse any cuts in defense spending even though the US spends more on defense that the rest of the world combined. Their plans, vision and actions are checked and balanced by the existence of a strong political opponent and a president from the other side. The PAP has turned Singapore into the 2nd most militarized state in the world[Link] with its high defense spending that exceeds the combined defense expenditure of our 2 closest neighbors. Under the PAP, Singapore has the lowest tax rates in the developed world and more elderly workers than you will seeany other developed country and sometimes people from developed countries are shocked by the number of elderly workers they see in Singapore. While this, along with inequality and financially burdening the sick are intolerable for many of us, the PAP operates on another set of values and principles. Solving our public transport problem so the it would broadly benefit Singaporeans would require the PAP to put service quality and affordability above the need for public transport companies to generate profits but this is not something that the PAP can or will do easily.
In GE2011, Singaporeans sent a clear signal that they want change. If that signal wasn’t clear enough another was sent during the PE when the majority of the people voted against the PAP endorsed candidate. In a BE (by election) scenario where people are not afraid of an abrupt destabilizing change of govt, they won’t be afraid to vote to signal a desire for change hence it is likely that another clear signal will be sent in Ponggol East SMC BE when it held…. that is if the opposition avoids a 3 corner fight. Unfortunately, all these signals will not be sufficient to move the PAP to make fundamental changes. Just like the National Conversation that started ambitiously with “no sacred cows” slowly become constrained and shackled by what the PAP cannot accept ideologically and started going in circles. In Japan, LDP seriously reformed itself after its election defeat to engineer a comeback, in Malaysia, heavy losses in the 2008 election and the threat of a defeat in 2012 pushed the UMNO govt to make progress in areas of human rights and democracy. There are 10 more days to the US Fiscal Cliff and both parties are still holding out refusing compromises that is against their ideology. President Obama reminds them the middle ground lies neither with the Republicans or the Democrats both sides needs to give up something that is fundamentally against their values and principles to reach this middle ground…and is only possible when both parties meet halfway neither side getting 100% of what they want.
In Singapore we have a dominant govt and a one party system. We have been under this system for more than 4 decades resulting in extremes not seen anywhere else in the developed world. In the past, with propaganda and control of the media, the PAP govt has been able to persuade ordinary citizens to accept its approach. However, in recent years, as a result of the Internet and increasing number of ordinary Singaporeans now understand how unbalanced PAP policies are and the middle ground is shifting steadily away from the PAP. However, with its ideology entrenched among so many of its supporters, change is not easy without a crisis. Without demonstrating the ability to make fundamental changes, the PAP tells us there is no need for a 2-party system or a multiparty system..the PAP can find the middle ground without a strong opposition presence. Listening to the National Conversation, listening to what the PAP and its supporters are saying and looking at the changes the PAP govt has been willing to make…
I think they are very very far from the middle ground and the growing frustration will lead to more support for the opposition until a sense of crisis if felt by the PAP and its supporters… only then will you see real changes that will significantly benefit ordinary Singaporeans and their families.
.
Lucky Tan
* Lucky Tan is an avid online blogger since 2005. He likes to study the thoughts of Singapore leaders and the laws of Singapore. He blogs at http://singaporemind.blogspot.com.
.
</EM></EM>Rate this (26 Votes)
<META content=4.42307692308 itemprop="ratingValue"><META content=26 itemprop="ratingCount">
