Fiscal Cliff Notes

I can remember my freshman and sophmore years in high school. Back when I had acne and could still run. I used cliff notes to gain a better understanding of the book we were assigned in English class. I am sure that some of my readers can relate to cliff notes or similar commercial summaries. Instead of reading the whole book, cliff notes allowed students to read at the last minute and still pass.

In a way, the fiscal cliff reminds me of cliff notes. Congress does not want to do the work they were sent to do and are trying to pass legislation at the last minute. Yes, the stakes are more serious than a bad grade on an English test, but it seems like Congress is looking for a shortcut. If only there were cliff notes on achieving economic stability and fairness.

The reality is that there are no shortcuts to fixing our economy in the global environment that we live in today. Luckily, we can look at other economies and history to help us make fiscal policy decisions. Below are my cliff notes for the fiscal cliff. It is not enough to solve all of the complex problems we face, but it can provide a framework for how we should approach it.

(1) Effective January 1, 2013, tax rates will go up for every level of income. The payroll tax holiday will also expire and spending cuts to schools, public health, and defense will take place. It is estimated that almost 90% of Americans, mostly low and middle income, will face on average, a $3,500 increase in tax liability.

(2) Federal tax revenues have been at there lowest levels in sixty years. This is due to the fact that tax rates have never been lower and the Great Recession has put many people out of work, which has decreased the amount of people who pay taxes.

(3) The national debt is currently over $16 trillion. The first president to go over $1 trillion was Ronald Reagan and it has been estimated that the Bush tax cuts reduced revenue by $1.8 trillion from 2002 and 2009. The debt to GDP ratio is not at the highest level. In 1946, debt was 108% of GDP compared to 104% today.

(4) Since the 1980's, and with the late 90's as an exception when Clinton was president, the United States has run a consistent budget deficit. During the Bush presidency, two wars and the Prescription Drug Bill were expenditures that increased the national deficit. With President Obama as president, the main expenditure was the Stimulus Bill. Both of their tax cuts on incomes over $250,000 have had a significant impact on increasing the deficit.

(5) Entitlement spending on programs like Medicare, Medicaid, and Social Security is rising quickly. Because of the millions of baby boomers who are retiring and the fact that health care costs are rising at a much higher rate than other goods or services, this poses a fiscal challenge. The Affordable Care Act will help, but it will not be enough.

(6) Countries that enacted austerity have suffered more than any country should have to suffer. Deficit hawks in the United Kingdom have drastically cut spending and there has been little to show for it. Unemployment remained stagnant for five years and UK's GDP is smaller than before austerity.

(7) Despite the United States national debt, the US is still able to borrow at historically low costs. Furthermore, those who have warned of hyper-inflation have been proven wrong for years. Inflation has averaged 1.4% during Obama's presidency and it is projected to be 1.2% for the next 10 years.

(8) Income inequality has grown to unsustainable levels. The top 1% of incomes take home over 20% of total GDP wealth. CEO pay has increased 300% since 1990 compared to the 4% increase for the typical worker. Out of every developed country in the world, the United States has the highest level of income inequality. It may be appropriate that the "Great Gatsby" is going to be in theaters soon, because there has not been this much inequality since the Roaring 20's.

These eight fiscal cliff note summaries give some perspective. While it is important that we confront entitlement spending and lower the national debt to GDP ratio in the long run, the main focus should be on achieving growth.

The average middle class American should not have to shoulder the responsibility of paying down the deficit so that the wealthy can keep their tax rates at historically low levels. Moreover, we have seen the effects of austerity, or cutting discretionary spending that benefits low and middle income citizens. It is a prescription for economic malaise.

To achieve growth, we will need to spend on infrastructure, education, and research. These are the ways in which our businesses can remain competitive in a global economy. Spending in and by itself is not the problem. And while the debt has increased to its highest numerical value, US bonds still have incredibly marginal yields.

When Speaker John Boehner failed to rally his own GOP members to pass his "Plan-B," it was another sign of GOP infighting. They were unable to pass legislation that would have increased taxes on incomes of over $1 million. The extreme tea party wing have gained so much clout that it may mean the end for the Republican party. But more importantly, it may mean the end for a fiscal compromise.

A part of me wants to go back those high school years when I had little responsibility. No bills, no worries, and no care for how Congress made its decisions. It is different now. As a small practitioner, I need Congress to do the right thing. Too bad they're not doing their homework.

The Newton Shooting and the Law

In a time that is traditionally set aside for the family and holiday spirit, fellow Americans are trying to cope with the task of planning the funerals of their young children. The shooting at Newton, Connecticut is a tragedy beyond what anyone could imagine. The lives of innocent elementary students were taken away suddenly and senselessly. 

This mass shooting did not only have an impact on the victims' families or the small town of Newton. The whole psyche of the nation has been affected in a traumatic way. I, who will one day have a family of my own, fear that my children will be brought into a world that is far different from when I was born.

While the nation grieves, there is the need to find answers. What could have been done to prevent this crime? Would it be prudent to immediately pass strict gun control laws? How about increasing the opportunity for low-income individuals to obtain mental health coverage? 

These "solutions" may increase the nation's safety, but cannot take away the pain of the victims and their families. Nevertheless, it is wise to have a discussion about current law related to gun control and mental health care. 

Gun Control

In June 26, 2008 there was a 2nd Amendment case, D.C. v. Heller, wherein a strict gun regulation law was struck down. The District of Columbia attempted to prohibit the use of handguns, unless it was registered and in the home of the owner, unloaded or locked away. The Supreme Court, in a 5-4 decision, held that "[the law] makes it impossible for citizens to use arms for the core lawful purpose of self-defense and is unconstitutional."

The National Rifle Association, or NRA, declared it a "major victory." The minority opinion disagreed with the NRA and stated that "the words 'the people' [in the 2nd Amendment] do not enlarge the right to keep and bear arms to encompass use or ownership of weapons outside the context of service in a well-regulated militia. 

In sum, the Court interpreted the 2nd Amendment to mean that every citizen has the right to defend himself/herself. The dissent's opinion, that the rights of gun ownership are supposed to be decided within the context of an 18th century world, when 95% of the population lived in rural areas, is simply an opinion, not the supreme law of the land.

The effect of this monumental 2nd Amendment case has been disappointing to gun enthusiasts and advocates. Since Heller, the Court has upheld most gun regulations that have attempted to expand on the requirements for those wanting to purchase weapons or ammunition. For example, a felon or a person committed to a mental institution may not legally purchase a firearm, and laws strengthening those policies are constitutional.

Heller may be more symbolic than anything but it sets precedent for future regulation. States are already thinking about legislation that could pass the scrutiny of that case. California is discussing legislation that will make it more difficult to purchase ammunition. Congress is considering laws that will curb the gun show "double standard", in which private sellers are able to bypass the requirements that all licensed dealers must meet before selling a firearm. 

In my opinion, we need to regulate ammunition to the same extent as guns. Adam Lanza had hundreds of rounds of ammunition. There is no purpose to have a large amount of ammunition to defend yourself. Do we need to place hundreds of ammunition boxes near the window, instead of a Christmas tree, to ward off potential criminals? I think not. We should also implement stricter background checks and require mandated educational classes to instruct people on gun safety prior to their purchase.

Mental Health

There is confusion among citizens about mental health. For far too long, there has been a stigma surrounding it. If a person is suffering from depression or bipolar disorder, individuals may misinterpret it as weakness. More education about mental illness needs to be a priority despite the fact that Adam Lanza may have had some variant of autism, a mental syndrome.

Almost 1/4 of the population will suffer from a mental illness and less than half will be treated. And since it is an illness, like any other common illness, a person suffering from post-traumatic disorder or depression needs to be treated.The Affordable Care Act ("ACA") has already attempted to cover more individuals that need this type of healthcare. Employers, both large and small, will have to offer policies that cover mental health. Moreover, the ACA will also invest in recruiting mental health professionals. That's a good start.

But more importantly, the conservative governors in the red states need to expand Medicaid to cover low-income individuals. So far, they have issued statements that they are unwilling to allow the implementation of the ACA. I find this both morally unacceptable and dangerous. Is it not possible that a low-income person suffering depression could resort to a mass shooting because of no treatment?

This is a time for reflection and prayer. But I also do not think that sending condolences is enough. We should have an honest conversation about how to prevent a tragedy of this magnitude in the future. As citizens of this great country, it our responsibility to those children that we find solutions.

The Bar Exam

Ever since I can remember, I knew that I wanted to be a lawyer. Maybe it was because my family loved going to the movies and I was enthralled with the legal characters that could win over jury with a persuasive argument on the big screen.

Or maybe it was because I have always had great respect for my uncle who was a tax attorney. His humble demeanor, great intelligence, and compassion were characteristics that I wanted to possess when I became an adult.

Or perhaps I was called to be an attorney because my interest for politics gave me the curiosity to look at a congressional website detailing the occupations of all of its members in the fifth grade. The 112th Congress, for example, had 200 members who declared law as their occupation.

Whatever the reason for my inspiration, I vividly remember my answer to the question, "what do you want to be when you grow up?" I, without missing a beat would reply, "a lawyer."

That's why Friday, November 16 was a memorable day. It was the end of a journey that I began after high school - but in a way - a path that began even before high school started.

The California bar examination is a three day exam, six hours each day. Since we had to be there early and wait for instructions after, it was an all day exam. But actually taking the exam may have been the easiest hurdle.

That is because my fellow July takers and I all began to study months before July 24. Before the ten hour Bar/Bri study days, we took the LSAT; completed law school applications; went through three years of law school classes and final exams; and fulfilled all of the necessary requirements to leave school with a postgraduate Juris Doctor degree. So in reality, the three days out of the five year process seemed quite infinitesimal.

Even if it seemed small, those three days would provide me the opportunity to practice the law as a licensed attorney.

On the night of the results, I screamed out loud with my fists clenched in celebration after Elizabeth told me that I passed. Even as I looked at the screen, it did not become real until she told me.

For those students who have not taken it yet and happen to also read my blog, I have a few pointers for you.

First, thanks for reading my blog. I know that it may be more painful than reading a casebook but at least you do not have to look for the issue, rule, and holding. There is not a final exam either.

Second, study with the right mental frame of my mind. Why did you go to law school? You aren't a masochist, you wanted to become an attorney. Remember that in our profession, attorneys read and write and then read and write. Think of bar prep as a preparation for your future practice and stay positive.

Third, do everything that you are told. I do not care if you get tired or think that you have done enough for the day. Complete every task assigned during bar prep and then do some more. You want to go in with complete confidence in your abilities because you will perform at your peak. And guess what? If you have a J.D., your best means that you can pass.

Fourth, embrace your faith or spirituality. It is no secret that in challenging times, we strengthen our relationship with God. Even if you do not believe in a Supreme Being, you can meditate or do something to make you focus on the bigger picture. In the end, there are more important things than an examination.

Fifth, allow your family and loved ones to help. I am a lucky man because my beautiful girlfriend, Elizabeth, did everything in her power to help us pass. She cooked, cleaned, did laundry, and was only a phone call or chat away. We shouldn't have to face the bar exam by ourselves and we do not have to. Reach out to whomever will help you succeed.

Sixth, take breaks during the day and on the weekends. Do not get burnt out. You will be working hard and that means your body and brain will need a rest. Go to the gym, a movie, or play some mini golf.

Seventh, on the day of the exam, enter the convention center with complete faith in what you have done during law school and bar prep. I listened to some motivational songs, remembered back to some of my favorite accomplishments, and was ready to give it my all. I had fun with it.

Tomorrow is the swearing-in ceremony. Let's hope I don't mess it up. I know that an attorney, a great attorney, would get it right.