Editor's Note: This is Part 2 of 3 of an Interview with Dr. Sandra Livingstone.  Part 3 will be published on Wednesday.

Part 1: Dr. Livingstone Answers Some Hard Questions
 

There are a lot of economic philosophies and think tanks out there, all trying to formulate the magic solution to our country's finances. When we sat down for an interview with Dr. Sandra Livingstone , we asked where she would seek guidance and direction regarding her economic decision making? Does she lean towards a particular school of economic thought such as Keynesian, Neo-classicist, Austrian or Supply-side? Or would she primarily seek council from economic think tanks such as the Club for Growth, the Cato Institute, Norquist's Leave-Us-Alone Coalition, or maybe even something else?

Livingstone laughed. After all, this wasn't a typical question. But, she wasn't flustered by it, and answered without hesitation. "I wouldn't define myself strictly as a Keynesian or a Supply-side completely, it's probably a combination of those economic approaches. We are in a different economy than economists have ever seen, because we're so globalized and so interdependent now, economically, and with the growth in China, and them buying all the gold in the world, them developing all of the energy resources in the world, like in Sudan and in Nigeria, etc., and in the Middle East, it's not the same as when Adams or Keynes was trying to establish an economic policy or principles. So, I think it's a combination of many, and probably a combination of things we haven't even seen yet, that no one's developed an economic strategy for."

"But what would guide me, would be fiscal responsibility," Livingstone said, getting back to the basics. "I want to see a sound US, based on real things, not confidence which goes up and down. And I want to see a stock market that's valued correctly, not just this overvalued stock market that we've had, and that's why we're crashing, and the housing market, too, needs to even out."

Livingstone got practical. "We need to somehow deal with the housing crisis, I don't feel the housing crisis has been dealt with. So, as far as institutes or think tanks that would guide me, I would tend more towards conservative economic think tanks, probably not Cato. Probably others. Not any one though, that I can think of that I would always listen to, and all of them have been wrong on different issues. That's the thing, because this is really like an actuary in a way, they look at things and they try to predict what's going to happen, based on models that I think are outdated and don't work because we've never had a global economy like we do now."

Entitlement Spending

One of the biggest drains on the federal budget is the entitlement spending. Entitlement spending has increased drastically over the past few decades, the war in Iraq has cost billions of dollars, and President Bush recently pushed through a bunch of tax cuts. Dr. Livingstone has stated the need to eliminate earmarks and some foreign aid, but is that enough? Does she have a plan for balancing the federal budget?

Livingstone nodded as we spoke, and then replied, "I'd like to see the IRS taken to task, I'd like to see the tax code simplified. I don't know if FairTax is the answer, but certainly a much more simplified tax code. One piece of paper would work. Just the IRS and the [Department of Education], if you could reduce those drastically, you could balance the budget. There is a lot of waste in military spending, and even the military is assessing the waste in military spending. I'd like to see that tightened, because there's so much waste there. And that's a huge chunk of our budget, is military spending."

"I believe in a strong national defense, but we need to be really frugal and careful..." Livingstone said. "With warehouses of things we're never going to use, worth billions of dollars, etc. I would cut entitlements, I would reduce the [Department of Education], and return education to states and local governments. Because I think that what we're doing is we collect the taxes and we send them all to Washington, DC, and they take a huge chunk for the bureaucracy and then send it back. I don't believe in that, I don't believe in centralizing more power, and I certainly don't believe in centralizing education, and that takes a huge chunk. So, IRS, and [Department of Education] could be cut, entitlements could be cut and changed, and requirements for getting entitlements should be cut and changed. Medicare could be completely reformed and the bureaucracy could be cut and you could take a lot of money out of that, if you could reform it so that people could get doctors, not so we could pay more people in the bureaucracy to file papers and create more and more paperwork for everybody, including doctors and insurance companies and individuals."

Livingstone then turned her attention to another large expense. "We could also save money on foreign aid in a big way. That's a big part of our budget. And a lot of foreign aid is going to people who are ardent human rights abusers, Saudi, Pakistan, China, it's just a diminishing return situation. We're pouring money into certain hands, like Pakistan - more than billion a month, but they're not shutting down the terrorists at all. So, you've got this growing al Quaeda network, growing terrorist network in northern Pakistan, we're giving them $1 billion a month, to try to shut it down and they haven't shut down anything. It's growing, they take the money, thanks very much. And supposedly, they are our allies on terror, but they're not doing anything to help us. And that's having an overspill in Afghanistan, and that's making it more difficult for us to win, shut down the resurgence of the Taliban there. So, I'd like to see us being wiser about where we put that bait as well. I think if we did all those things, we could balance the budget."

What about federal spending for departments such as the National Endowment for the Arts? Should the government be in competition with the private sector?

"I'm not a huge fan of the National Endowment for the Arts. Overall, I'm in favor of smaller government. So, none of these things do a lot for me. No, I don't like a lot of things that come out of the National Endowment for the Arts. I don't believe we should be supporting abortion - in fact a majority of Americans are more against abortion than for abortion. Why should my tax dollars go towards abortion, abortion clinics and all these other - like Planned Parenthood, if I don't agree with that? And the same thing with National Endowment for the Arts. A lot of my tax dollars is going to things that are totally offensive to me. And why should the government be involved in those things. I would like to see a smaller government, and I would like to see a total assessment of all of these government programs. A lot of them could be drastically reduced."

Energy Independence

Likely the biggest issue in the mind of today's voters is the price of gas. It's affecting the prices of everything, from driving to food to heating our homes. Many solutions have been put forth, but very few people discuss nuclear power. How would Dr. Livingstone approach the energy problem, and would she be willing to relax the restrictions on nuclear power?

"I'm not anti-nuclear," Livingstone stated. "But I really want a solution for, one, reusing the waste, because we're not doing that, we're the only country in the world that doesn't reuse the waste. Basically, when you create fission with the U235, the byproduct is plutonium. The plutonium acts exactly the same as the U235. So, if we can take the plutonium and get it out of that, in other words, basically clean the waste in such a way as to reuse that plutonium, it can then create more of a chain reaction in fission so that we get a lot more energy."

"The bureaucracy is ridiculous for a new nuclear power plant, even to add two reactors at Palo Verde, the bureaucracy is absurd." Livingstone pointed out. "The length of time it takes then to do the plant is enormous. The cost is huge. My biggest concern with immediately right now trying to go with more nuclear is the way we don't reuse the waste product. The storage of the waste product is what we really need. I know that Yucca Mountain is very stable, and that's what we're proposing to put extra waste. I know we've got 15-20 years in Palo Verde of storage for waste, but we really need to vitrify the waste, which is put it into glass jars and get it into a salt mine or something really stable. Although I've been told that Yucca Mountain is just as stable as any salt mine that we have."

Livingstone also pointed out other solutions. "What I understand, talking to one of my friends who's a nuclear physicist, he's worked at almost every nuclear plant in this country, is that a nuclear power plant only spits out about 1,300 megawatts of power. And these new coal plants, can do as much as 1500, so the actual electricity you get out of nuclear may be less than coal, and we have so much coal, and we can burn it so cleanly now."

"I'm not anti-nuclear, I just want to make sure we deal with the waste and we use it well," she repeated. "We recycle it. We don't have many breeder reactors here, and that's another thing, we should have more breeder reactors because that's also more efficient than the current reactors we're using. To crack hydrogen we're going to need a lot of electricity, we may need to be able to use more than just coal to be able to do that."

Education Reform

So, how can education be improved? Is No Child Left Behind the answer? How about voucher programs, anyway?

"I would like to localize education," Livingstone stated emphatically. "I would like to get it out of the federal government's hands and give it back to states and local entities. I don't like "No Child Left Behind" because the standard it sets keeps money from local state and local education systems, rather than enabling the money to come back. We spend all this money in taxes, the federal government takes it, and then they dole it back out. But it's less 25% of what they gave. So, to me it's totally inefficient to centralize education. I'd like the money to go to state and local and come back. I am pro vouchers, completely pro vouchers, because I believe people should have a choice if they are giving money, paying money through property taxes, they should be able to decide where their kids go. So, I am totally for voucher systems."

"I believe the [Department of Education] is too big and has too much influence and it's a centralization of educational power that should be put back in the hands of local people who are the parents involved in their kids education. And, I don't like No Child Left Behind, I don't think it's done very well at all. It's just another bureaucracy at the federal level, that has taken away from helping kids at the local level."

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written by KathyLopez, August 04, 2008

Read more about Sandra at drlivingstoneipresume.com.

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