Q&A. Including Commentary on Trump’s “Flood the Zone”

Article #9 Purple Wayz: Navigating to the Center

Since I started Purple Wayz in October of last year, I’ve received plenty of great feedback. Please keep it coming! Before going back to core articles on Deficit, Taxes, Electoral Reform, Healthcare et al, I’d like to address some of these. Since late January, I’ve also received many questions about Centrist reactions to Trump’s “Flood the Zone”. So here we go….

Do you support DOGE? Well, yes and no. Most Centrists right now support the DOGE goals of material discretionary expense reductions. But at the same time, they don’t support the methods that the Trump Administration is using. As you’ve read, the Purple Wayz approach to deficit reduction is a Grand Bargain. Don’t ONLY go after discretionaries. Use a bipartisan approach to go after comprehensive and long lasting deficit reduction by targeting Mandatory Expenses (mainly, Soc Security and Medicare reform), Discretionary Expenses (government efficiency) and Taxes (expand the tax base mainly by eliminating loopholes).

If someone told me I could only focus on discretionaries, I would wait until my Cabinet was fully formed and task the heads of the agencies to come up with material cost cuts. These wouldn’t be the same percentages across the board–some agencies require more cuts than others. These agencies know who the top employees are and won’t let them go. They also know where other waste lies. But, inevitably they would come back a bit short (human nature). I would refer them to an internal restructuring consultant like DOGE to help with the last 3-5%. In other words, I’d use a scalpel, not a sledgehammer.

I would expect equally extreme push back from the left, by the way. Even if you do it more thoughtfully, you’re still shrinking the government. I wouldn’t take any joy in this either. It’s serious and sad, but necessary. These are real life people!!! The Elon chainsaw routine is brutal.

What if you’re wrong and the US really CAN run 6% of GDP deficits without running into harm? Have you read The Deficit Myth by Stephanie Kelton? Deficit hawks may have the wrong idea. It’s more about making sure key shortfalls are met including retirement savings and infrastructure. Artificial budget limitations prevent effective solutions to these pressing problems.

This is a really tough one, because on one hand, nobody knows for sure. But on the other, if Modern Monetary Theorists are wrong, the nation is screwed. There is no easy way back from the brink as we’ve analyzed. There are plenty of other examples historically (Roman Empire, et al) that have been wrong in the past. Why would this time be different? And we see lots of examples of economies starting to teeter around 150% plus Debt/GDP. She and others make the mistake of citing Japan’s 200% plus Debt / GDP, saying it’s going OK there. Again, Japan runs itself like a hedge fund. They have lots of investment assets to counter their liabilities. Their debt held by public is much lower than 215%. It’s approximately 120% now.

So the best arguments against Modern Monetary Theory are risk based and historical. The cost would be too dire, and we’ve seen this movie before. Also, it’s very possible to address our needed solutions within a framework that won’t risk Armageddon.

Finally, a little context…Kelton and other liberal economists pushed and developed these arguments strongest coming out of the 2008-2010 recession. They believed fervently that federal stimulus wasn’t enough back then, and that led to a very slow recovery. They might have been right about the 2009-10 stimulus. We will never know. But we do know that in the 2020’s, these and similar voices helped to convince Biden to ‘fight the last war’. Biden’s mega stimulus in 2021–simultaneous with the launching of vaccines which was a natural stimulus–contributed to inflation that we’re still enduring. Deficits increased to their current unsustainable levels.

This is yet another argument for the electorate to beware of electing Presidents whose past political experience can yield a worldview that doesn’t fit the present facts. We experienced this with Bush (Iraq/Cheney mistake), Biden (2021 stimulus mistake) and Trump (keep reading).

Why can’t we do more with taxing rich people to solve the deficit problems? This is complicated, but it comes down to some stark realities. First a quick refresher. The Purple Wayz Grand Bargain features $400 Billion of new tax revenue, which is 40% of the $1 Trillion (2024 dollars) needed to get the US back to a sustainable path. So why not $500B, or even the entire $1 Trillion?

1) There are simply not enough millionaires and billionaires. As I discussed in Article 8, it’s very possible to raise more tax revenue in the Purple Wayz Grand Bargain while becoming even more progressive (meaning people pay higher percentages of their income as you move up the income scale). But after about $400 billion of new revenue, you start to run into material problems of growth. And remember Debt/GDP is a two part equation: reduce the debt, but not so much as to materially reduce GDP growth. This is dynamic.

2) Higher tax rates lead to lower growth. The best way to increase tax revenues is to increase the tax base and either keep rates where they are or slightly lower. Investment and purchasing decisions that keep an economy humming are made with the marginal tax rate in mind. If the tax rate is 30%, more economic activity will occur than if it is 50%. So expand the tax base! Not rates!!! Most of my liberal and conservative friends are very focused on tax rates only, high and low respectively!

I’ll be going into these arguments in more detail in future articles. Taxes seems to be a hot button issue, and are widely misunderstood. This will become a hot topic later this year when Trump pushes either a simple extension of the current tax law or further tax rate cuts. Again, that would be a mistake without increasing the tax base. An old leader fighting his last war again.

Why do you think Ranked Choice Voting (RCV) did so poorly in the 7 states that had it on Referendums? Two things. 1) The Two Party Duopoly went to work hard on this, especially the Republican Party. The main argument made against RCV was that it’s too hard to understand. I asked lots of Aussies and Kiwis about this—they both use forms of RCV. Nope. Piece of cake for them.

2) The marketing for RCV and Open Primaries wasn’t that great. I’m not a marketing specialist, but I feel for the marketers here. It’s hard to rise above the noise during election season. And yeah, RCV does sound complicated the first time you hear about it. So we gotta keep banging the drum. I expect that the continued lousy performance of both parties will cause more and more people to look for alternatives. To me, RCV and Open Primaries are the best Wayz.

What does Purple Wayz think about tariffs? Not a fan. Unless it’s to combat dumping or targeted industrial policy (which China has enacted most notably in key industries like semiconductors and automobiles). We’ve heard the arguments about the value of using threats to gain back a level playing field. The issue there is that you have to follow through on the threat if somebody calls your bluff. And if you do that, the trading partner will respond tit for tat. And then it’s destructive to both. We are experiencing this today, March 4 2025. But there are multiple examples of this from history.

Yet it remains a fact that many of our trading partners have tariffs in place that are disproportionate to what the US places on their exports. How to deal with this fact? A ‘quieter’ policy of leaning on trade partners to level up protectionist policies would be far more effective. The US might not get every last dollar, but the risk reward equation would be far better. Bluster backfires too easily.

Given Trump’s style, it makes sense that he likes this approach though. My first job out of college was commercial real estate in New York. I saw up close how Trump and other developers negotiated. It’s a blood sport. Gotta win 100 to 0. Expanding the pie and sharing the gains is for idealists. Unfortunately, this style doesn’t translate well to international relations and trade negotiations.

How are you feeling about the Republican Party and Trump?

Pretty terrible. That said, it’s not unexpected. In most areas, Trump is doing what he said he would. Just faster, more aggressive, and with more executive power overreach than I expected. And I expected a lot! He’s fighting a lot of ‘last wars’ simultaneously.

I felt similar (not as bad) in 2021 when Biden came out of the inaugural with one massive spending bill after another — did anyone really think he was going to govern from the center?

Can you say Two Party Duopoly? Will these people ever correctly read a lack of mandate?

I am particularly concerned about the foreign relations situation with Ukraine, our relationships with our closest allies, and the implication that the U.S. wants to go back to 1800s style ‘sphere of influence’ relationships. Those led to WW1. Trump and friends seem to misunderstand the post 1950 history and why America’s leadership and sacrifices for others has raised our fortunes most. He’s undoing decades of good work.

After ‘The Meeting’ last week, I was just so down. A true low point in our history. It seems that most Centrists/Independents saw it similarly. Right after, I heard a Republican senator on the radio talking about ‘biggest own goal in history’. I assumed he meant Trump and Vance. Nope. He meant Zelenskyy. Appalling.

On Republicans, it’s that kind of cowardice that I’m most concerned about. In the Senate, everyone except for Alaska’s own Lisa Murkowski is afraid of their own shadow and won’t speak up. Thank you Alaska and your Ranked Choice Voting. There’s a clear lesson there.

Gingrich and Reid’s ‘Primary-ing’ tactic has now been perfected. Follow the Party line, or we’ll Primary you. It is the mainstream now—the least common denominator— and it is a core toxic problem in our Democracy today.

We know that First Past the Post voting always devolves to two parties. And we know that those two parties have been acting like a Duopoly for a long time now. They serve themselves, not US citizens. The US desperately needs Open Primaries, RCV, Gerrymander reform and campaign finance reform!!! (And Term Limits, but as discussed, that requires a Constitutional Amendment and that’s just too hard). I saw how RCV works well in Australia and New Zealand. Time to change. We can’t solve the massive issues of our time with First Past the Post.

We’ll get back to the core articles next week. And I’ll be adding in more Q and A’s going forward. So please send your questions and comments either here or to me directly. I’ve been enjoying hearing folks’ perspectives from all sides. Thank you.