Semi-Daily Journal

Plainly, the US needs less terrorism and more
economic growth. Toward these ends, please find
below the draft of an op-ed piece I am preparing.
Of course, any comments and suggestions are
welcome.

SUPPORT THE COALITION TROOPS AND FIGHT TERRORISM
AT HOME. STEAL THIS MICROSOFT-APPROVED BUSINESS
PLAN.

Hello all. I'm Frank Ruscica, founder of The
Opportunity Services Group, a startup provider of
lifelong learning and career services. Not long
ago our business plan was circulated internally at
Microsoft. Soon after, I received the following
email from Randy Hinrichs, Manager of Microsoft
Research's Learning Sciences and Technology Group:

"Frank, you are a good man. Have you thought about
joining this team? Your only alternative, of
course, is venture capital. But their usual models
require getting rid of the 'originator' within the
first eighteen months. With Netscape it took a
little longer, but you get the idea."

An updated version of our business plan is now
online at www.opportunityservices.com.

Why?

"An American invasion of Iraq is already being
used as a recruitment tool by Al Qaeda and other
groups," a senior American counterintelligence
official said recently, "And it is a very
effective tool." So the months and years ahead
may be a dangerous time for coalition troops and
corresponding civilian populations.

How dangerous depends in no small part on we
civilians.

As the counterintelligence official's remarks make
plain, a big part of winning the war on terrorism
is convincing potential terrorist recruits and
supporters that their interests are being served
by America and her allies. People are at their
most convinced when they are psychologically
addicted. Psychological addiction takes shape in
the part of the brain called the nucleus
accumbens, which is fired by the prospects of
professional success, romance and laughs.

By definition, providers of lifelong learning and
career services (LLCS) will focus on increasing
their clients' professional success. In
particular, providers will race to develop and
fund their own student loan programs, as most
customers will need financing in order to consume
their initial bundle of LLCS, and will be drawn to
the provider offering the best loan package. These
loan programs will, in time, democratize access to
LLCS -- and hence, expand prospects of
professional success to all who might otherwise
become terrorist recruits or supporters.

Credibly sustainable providers will also enable
their clients to enjoy more romance and laughs.

Men comprise a large majority of the most
desirable '1.0' LLCS clients -- students of
information technology or business who reside in
the United States. The most desirable '2.0'
clients are U.S.-resident women who are college
students or recent graduates. According to a
recent American Demographics survey, 36% of
couples in the U.S. meet at work, and 27% at
school. Increasingly, couples are also meeting
online. In December 2002, 26 million Americans
visited online dating sites. So credibly
sustainable LLCS providers will facilitate the
formation of student/professional networks -- both
on- and off-line -- that will provide meeting
places.

As the founder of an LLCS provider, I have a bad
case of comic plight: like many men, I want to
succeed in my professional life and also be the
best boyfriend, and later husband and father, I
can. In my case, achieving this balance is
complicated by the magnitude of the stakes in the
market -- and will be further complicated by
company-affiliated actresses, who will routinely
employ their beauty, and their charms more
generally, to make a favorable impression on me.
Given this, and given the desirability of running
marketing as a profit center, the centerpiece of
our '1.0' marketing strategy is a reality TV show
based on my plight. Competing shows, featuring
other LLCS CEOs, will necessarily follow. As
will online complements showcasing variations on
the CEOs' plight that will characterize relations
between affiliated actresses/actors and employees
at all levels of the companies. So LLCS
provider-supplied laughs will abound.

Civilian efforts to turbocharge maturation of the
LLCS market, then, should be a big part of the war
on terrorism.

Again, our plan is online at www.opportunityservices.com.

Given this fiscal picture, why is Congress even considering the Bush call for new tax cuts? Why is Bush charging ahead with a tax cut policy when all the signals are flashing red?

It is obvious that there will be no correction to the federal fiscal deficits until after Bush leaves office.

I sometimes think that if Bush announced he wanted to shoot 10 people at random the Democrats would argue for five.

The problem is that the opponents of the tax cut have let Bush set the terms of the debate as "how much" rather than "whether." Maybe this is a good example of "anchoring," but isn't it about time people caught on to the trick.

Frank,

"us civilians"

http://www.nytimes.com/2003/03/21/opinion/21KRUG.html

March 21, 2003

Who Lost the U.S. Budget?
By PAUL KRUGMAN - NYTimes

The latest official projections acknowledge (if you read them carefully) that the long-term finances of the U.S. government are in much worse shape than the administration admitted a year ago. But many commentators are reluctant to blame George W. Bush for that grim outlook, preferring instead to say something like this: "Sure, you can criticize those tax cuts, but the real problem is the long-run deficits of Social Security and Medicare, and the unwillingness of either party to reform those programs."

Why is this line appealing? It seems more reasonable to blame longstanding problems for our fiscal troubles than to attribute them to just two years of bad policy decisions. Also, many pundits like to sound "balanced," pronouncing a plague on both parties' houses. To accuse the current administration of wrecking the federal budget sounds, well, shrill — and we don't want to sound shrill, do we?

There's only one problem with this reasonable, balanced, non-shrill position: it's completely wrong. The Bush tax cuts, not the retirement programs, are the main reason why our fiscal future suddenly looks so bleak....

Using another blog for advertising stinks!

Hello all. I'm Frank Ruscica -

Rubbish and rudeness....

Good Grief!

March 21, 2003

House Narrowly Passes $2.2 Trillion Budget
By DAVID E. ROSENBAUM - NYTimes

Voting largely along party lines, the House early today narrowly approved a 10-year budget plan that would allow the deep tax cuts President Bush has proposed.

The Republican-controlled House approved its plan by a vote of 215 to 212. The legislation calls for a $2.2 trillion budget for the 2004 fiscal year that includes $726 billion in tax cuts that the White House has proposed....

"I sometimes think that if Bush announced he wanted to shoot 10 people at random the Democrats would argue for five.

"The problem is that the opponents of the tax cut have let Bush set the terms of the debate as "how much" rather than "whether." Maybe this is a good example of "anchoring," but isn't it about time people caught on to the trick. "

Perfect.

The Administration budget plans contradict all we have learned about economics these past 60 years. Awful awful stuff. Possibly Senator John McCain can bring along enough Republicans to stop this absurd new tax cut plan.

you wrote: "The problem is that the opponents of the tax cut have let Bush set the terms of the debate as "how much" rather than "whether."

The problem is that the opponents of the tax cut don't have enough votes to stop it. Tax cuts are always politically popular. If tax cuts are enacted outside of a budget framework that also includes spending, then huge deficits will result. Reagan proved that with his 1981 tax cut. Bush is using the same strategy. Pass a tax cut without mentioning the deficit. When the deficit rears its ugly head blame it on A) the economy B) 9/11 C) Bill Clinton D) claim it doesn't matter. This administration is more fiscally irresponsible than Reagan.

"I sometimes think that if Bush announced he wanted to shoot 10 people at random the Democrats would argue for five. "

Funny as hell.

I vaguely recall, in the aftermath of the Nov 2002 Election debacle, that the Dem party was going to figure out its position on the original Bush tax cut. They had been coy in the fall, some of you will remember bitterly, because roughly a dozen Dem Senators had supported the first round of tax cuts.

So, just as this band of stalwarts was going to coagulate around the idea of freezing the remaining scheduled Bush cuts, Bush proposes more cuts. Change the tone! Now, instead of a debate about how much of the old cut to undo or delay, we are discussing how much of the new cut to enact.

Remind me again about how stupid Bush is.

Well it all depends on whether you define someone who outsmarts Democrats but destroys the country's fiscal position as "smart" or "stupid"

The Democratic Party does not have a unified position on tax and spending issues. The GOP does. WIth the exception of Chafee and McCain, the GOP supports tax cuts, runaway spending on defense and huge budget deficits. Democrats are split on these issues.

It is weird. While America 2001 had enjoyed sustained economic growth, heading toward a minor recession, had a few minor disputes with the E.U. over bananas, GM goods, and a bit of silly French fear of American hyperpowerism, had a $5.6 trillion long-run surplus, and was making steady progress toward freer trade, America 2003 has had economic stagnation for about two years, has seriously alienated the rest of the world and strained relations with many E.U. countries to a breaking point, looks like the federal government will go bankrupt in two decades, and is reverting toward protectionism. This isn't to say it's all Bush's fault (though much of it is), but he doesn't seem to have answers to any issues except what to do about Saddam Hussein (not WoMD, just Saddam Hussein, with Saddam's partial contribution to the overall problem of WoMD being included by association). Yet somehow, Bush is regarded as a man who has clear answers to the issues facing the country. Does anyone understand this? If Goerge H. W. Bush had been given this kind of reverence, he would have been president until 1996.

"The Democratic Party does not have a unified position on tax and spending issues. The GOP does. WIth the exception of Chafee and McCain, the GOP supports tax cuts, runaway spending on defense and huge budget deficits. Democrats are split on these issues."

Great great truth.

Looks like Bush gets all his tax cut. The House gave him 100%. The Senate gave him everything but $100 billion. There is little political penalty for voting in favor of a tax cut.

Don't want a deficit?

Two words: spending cuts.

"There's only one problem with this reasonable, balanced, non-shrill position: it's completely wrong. The Bush tax cuts, not the retirement programs, are the main reason why our fiscal future suddenly looks so bleak...."

The retirement programs are one reason we're stuck choosing between high taxes and substantial deficits. Bush is choosing deficits. A better answer would be to reform these and other programs, so that we can have reasonable tax rates without deficits.

Donald Luskin weighed in on the NY Times op-ed piece by Paul Krugman in the second edition of his Truth Squad for National Review Online. Luskin's comment on the Social Security shortfall was that the trustee's underestimate the shortfall by including the reserves and interest return on the reserves. But then wasn't the purpose of the payroll tax increase in the early 1980's to pre-fund the retirement benefits for the baby boomers? Luskin then questions the tax revenue shortfall estimated by CBPP to be between $12 and $14 trillion. Luskin's rationale is that somehow this long-term fiscal stimulus will increase long-term growth. Yet, he cannot address the issue of how the reduction in national savings is supposed to lead to more growth as opposed to less growth.

This "Truth Squad" is another reminder of how little truth emanates from the supporters of this Bush long-term fiscal stimulus.

"The problem is that the opponents of the tax cut don't have enough votes to stop it. Tax cuts are always politically popular. If tax cuts are enacted outside of a budget framework that also includes spending, then huge deficits will result. Reagan proved that with his 1981 tax cut. Bush is using the same strategy. Pass a tax cut without mentioning the deficit."

All true. But deficits are not popular. The way to get the votes to stop the tax cut is by making the case on the deficit strongly. The "tax cut for the rich" argument, however valid, doesn't resonate, in part because the public believes it's a no-cost proposition. The Democrats have done a poor job refuting that belief.

Bernard Yomtov's 3/25 post has a pessismistic but insightful post on the politics of tax cut. The good news, however, is that three Republican Senators put fiscal responsibility ahead of their desire for lower tax rates. The sad reality is that these responsible Senators are now having their patroitism questioned by the self-styled Club for Growth (actually Club for Rich People) crowd. See, for example, today's piece by Lawrence Kudlow at www.nationalreview. com. I guess it's OK for Ari Fleischer to promote an irresponsible tax good by saying "do this for the troops" but anyone who has the courage to do what is right is being called a traitor.