Money matters

By Mustang Bobby 

The way the Republicans tell it, the economy is still collapsing, the deficit is ballooning, the tax hikes in January are killing business, and Barack Obama is a socialist bent on crushing small business under the heel of the federal government with regulations on top of regulations. Oh god oh god we're all gonna die.

Except none of that is true:

The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.

For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.

The decrease is almost entirely due to revenue increases.

And we are seeing the strongest rate of job growth in eight years.

Meanwhile, the stock market is booming, the Dow having hit 15,000 earlier this week.

As for the growth of regulations from the federal government, it's a canard you always hear from the Republicans — the party of vaginal probes, by the way — but it's been debunked time and again, even when it was a campaign issue for Mitt Romney.

As I've said before, if Barack Obama is a socialist, he really sucks at it.

(Cross-posted at Bark Bark Woof Woof.)

There is no long-term budget problem

By Frank Moraes 

Alan Blinder is a economics and public affairs professor at Princeton. Recently, he got placed in the middle of the argument between Paul Krugman and Joe Scarborough when Scarborough claimed that Blinder was on his side. Blinder didn't like that much. Yesterday, he wrote a short article at Politico, "Morning Joe's Accuracy Deficit." He says that he and Krugman only disagree about some very minor details.

Blinder claims there are three issues regarding the budget. In the short term, we are already doing too much deficit reduction. In the medium term (ten years), we have already done about what we should do. And in the long term, things are going to be very bad indeed. He is right about all this. The problem is that, like most people (including Krugman at times), when it comes to the long term, he is being deceptive.

In his new book, After the Music Stopped, Blinder claims:

The government can cover no more than a small fraction of the projected deficits by raising taxes. Sorry, Democrats, but the Republicans are right on this one. Americans are used to federal taxes running about 18.5 percent of GDP; they will not allow them to rise to 32 percent of GDP. Never mind that a number of European countries do so; we won't.

Read more »

Out of control: The Republican myth of Obama's deficits

By Mustang Bobby

One of the many knee-jerk GOP memes is that President Obama has exploded the deficit and is spending our nation down the road to oblivion and it's getting worse with every passing moment.

Yeah, except it's not true:

The federal budget deficit in 2013 is projected to be $845 billion, the first time the non-partisan Congressional Budget Office has forecast a deficit below $1 trillion under President Obama.

The reduction in the budget deficit comes after Congress approved higher tax rates on households with annual income above $450,000. 

 
Read more »

The fiscal havoc Republicans have wreaked

By Michael J.W. Stickings

Republicans are in Tampa this week blaming President Obama for... well, for pretty much everything, but mostly, it would seem (based on Christie's speech last night), for not being serious enough and so not doing enough about the bloated budget deficit and ballooning national debt.

The propaganda will be in heavy supply, and Romney is being touted as, and will tout himself as when he takes the podium Thursday night, just the sort of responsible fiscal conservative America needs at this time of fiscal crisis.

Don't believe a word of it.

First, of course, there's the Romney-Ryan (and orthodox Republican) "plan," which mostly focuses on tax cuts for the wealthy (you know, people like... Mitt Romney), paying for them, sort of, by crushing government into oblivion -- there are a lot of unspecified spending cuts, though not to national defense, which is indeed rather bloated, unspecified largely because the devil, as they say, is in the details, or in other words because any such cuts would be unpopular, along with entitlement reform of the kind that would essentially destroy hugely popular and hugely successful programs like Social Security and Medicare -- that is, summing up, paying for them by burdening everyone else, the vast majority of Americans who aren't rich.

You won't hear any of that in Tampa, though you'll hear a lot about how Obama and the Democrats are waging class war and unfairly picking on the wonderful job creating "makers" who just happen to be rich, boo-hoo for them, pity the poor souls and their god-given wealth, and you'll hear a lot about how the only way to get the economy moving again, and to resolve the fiscal crisis, is to reintroduce some serious trickling down. Oh, they won't call it that, but that's what they mean when they propose slashing taxes (on the rich, though they'll claim it's much broader than that) and spending (mostly for programs that benefit everyone else).

But then, second, there's this... the fact that the current fiscal crisis is largely a Republican creation, a product of the gluttonous Bush years, when the GOP controlled the White House and Capitol Hill and ran roughshod all over fiscal responsibility through tax cutting and warmongering.

Here's where a graphic would help, and helpfully Ezra Klein provides one:

Pretty clear, no? As Klein explains:

The top layer, the orange one, that's the Bush tax cuts. There is no single policy we have passed that has added as much to the debt, or that is projected to add as much to the debt in the future, as the Bush tax cuts, which Republicans passed in 2001 and 2003 and Obama and the Republicans extended in 2010. To my knowledge, all elected Republicans want to make the Bush tax cuts permanent. Democrats, by and large, want to end them for income over $250,000.

In second place is the economic crisis. That's the medium blue. Recessions drive tax revenue down because people lose their jobs, and when you lose your job, you lose your income, and when you lose your income, you can't pay taxes. Tax revenues in recent years have been 15.4 percent of GDP — the lowest level since the 1950s. Meanwhile, they drive social spending up, because programs like unemployment insurance and Medicaid automatically begin spending more to help the people who have been laid off.

Then comes the wars in Iraq and Afghanistan. That's the red. And then recovery measures like the stimulus. That's the light blue, and the part for which you can really blame Obama and the Democrats– though it’s worth remembering that the stimulus had to happen because of a recession that began before Obama entered office, and that the Senate Republicans proposed and voted for a $3 trillion tax cut stimulus that would have added almost four times what Obama's stimulus added to the debt.

Then there's the financial rescue measures like TARP, which is the dark blue line. That's almost nothing, as much of that money has been paid back.

In other words, a largely Republican mess, made worse by a global economic downturn that hardly was Obama's fault. And, indeed, the president has tried to do something about it.

First, he pulled the economy back from the brink of collapse, not least through a stimulus package that Republicans tried to block and through rescuing the domestic auto industry, which some Republicans, including Romney, also tried to block.

So contrary to Republican propagands, it's not that Obama has done so poorly at fixing the economy, it's that the economy would be so much worse were it not for him, were Republicans the ones calling the shots.

Which in many ways they have, controlling the House since 2010, using the filibuster like a disloyal opposition in the Senate, and pursuing a course of absolute obstructionism at every turn, even when the president was handing them a deal that was incredibly friendly to conservatism: "Obama has proposed a multi-trillion dollar deficit reduction plan. Republicans just refused to pass it." He was more than willing to compromise, even to put key entitlement programs on the table, much to the chagrin of progressives, but... no. Never. Refusing to hand him any sort of victory, Republicans chose to block any measure other than one steeped in their right-wing extremism, like the Ryan budget, that aimed to get the country's fiscal house in order.

All of which makes their rhetoric about fiscal responsibility, about how Romney will do what needs to be done, complete and utter bullshit.

I don't see how any American who isn't a complete idiot can vote for a Republican

By Michael J.W. Stickings

Mitt Romney, yesterday, at The University of Chicago:

I don't see how a young American can vote for, well, can vote for a Democrat.

He was referring to national debt and the accumulation thereof, trying to make the case that Republicans are "consumed with the idea of getting federal spending down and creating economic growth and opportunity so we can balance our budget and stop putting these debts on you."

Which makes him sound all responsible, though of course what he was doing was being dishonest.

Republicans aren't consumed with balancing the budget, they're consumed with lowering taxes on the rich, on people like, oh, Mitt Romney.

And if they were really consumed with improving the country's fiscal health, they'd support the Affordable Care Act (aka Obamacare, itself derived from Romneycare, Mitt's relatively progressive reform package in Massachusetts), which seeks to get health-care spending under control and which will significantly reduce the deficit. But of course they consider it the worst attack on freedom in American history (one of the truly most ridiculous claims in American history) -- even if it's actually a Republican idea.

And if they were really consumed about balancing the budget, they'd support cuts to military spending and, yes, progressive taxation that places a fair burden on the shoulders of the rich, particularly Romney and his plutocratic ilk, not just letting the disastrous Bush tax cuts expire but advocating higher taxes on those who most certainly can afford to make a greater sacrifice. But of course tax increases of any kind, even returning to the tax rates of the prosperous Clinton years, are anathema to Republicans, without exception. And, no, they don't support military spending cuts either.

But let's get back to what Romney said. Why would a young American vote for a Democrat? Because it's not just about balanced budgets, it's about doing something about climate change, about caring for the poor, about not waging war on women and their health, about extending health coverage to the uninsured, about not getting entangled in imperialist foreign wars, about making sure air and water are clean, about being fair and compassionate to undocumented immigrants who only want a better life in America. It's about so many things that really, truly matter to young people today, things about which Romney either doesn't seem to give a shit or doesn't seems to have a clue. And on these and so many other things, it's the Democrats who stand for the hopes and dreams of young Americans.

Mitt, if you want to know how a young American, or any American who isn't a complete idiot, can vote for a Democrat (you know, like President Obama), go take a good long look in the mirror. There's your answer.

(photo)

Let us again speak of the limits of civility in political discourse

By R.K. Barry

Yesterday Paul Krugman wrote about the hurt feelings the Republican leadership claimed upon listening to President Obama's speech on the economy last week. They seemed not to like, as Krugman points out, Obama's assertion that the Paul Ryan plan is cruel nonsense and should be exposed as such.

It was richly ironic to be reading about Republican hurt feelings on a day when right-wingers across the country were gathering to listen to the likes of Donald Trump, Michele Bachman and Sarah Palin, who have drawn serious attention to themselves by calling our president all manner of nasty names like "socialist, "the guy who wants to off grandma," and the "worst president ever," etc., etc.

In that context, having Republicans claim insult was a little odd.

Don't get me wrong. Civility has its place but not, perhaps, so much in the current context in which, as Krugman writes, "the two parties have both utterly different goals and utterly different views about how the world works."

Krugman continues:

It’s not nice to say this (but the truth is rarely nice): whatever they may say, Republicans are not concerned, above all, about the deficit. In fact, it’s not clear that they care about the deficit at all; they’re trying to use deficit concerns to push through their goal of dismantling the Great Society and if possible the New Deal; they have stated explicitly that they want to reduce taxes on high incomes to pre-New-Deal levels. And it’s an article of faith on their part that low taxes have magical effects on the economy.

Obama and Democrats generally tend to believe that major social programs are worth protecting, having extended them with health care reform. They tend to accept the fact, and the research to support it, that tax cuts for the wealthy are not the cure-all for what ails us.

So, the battle lines seem to be drawn. If civility means that we sit around politely chatting while Republicans tell lies about their true intentions, I want no part of it. While I hope we would all reject violence, I see no downside to taking to the streets to scream at the top of our lungs if necessary that we will not calmly debate the contours of a new economic regime that sees the rich get richer and the rest of us fight over the scraps.

Civility is all too often code language for passivity - and passivity always works in the interest of those who already have the power.

When it has been necessary to stand up for justice, fairness and equality, Americans have frequently found the strength to do so, whether for civil rights, women's right, gay rights or to oppose the war in Vietnam. In each instance, those who were being challenged could be heard bemoaning the lack of civility shown by protestors. You could always count on that.

The reshaping of our society proposed by Republican lawmakers and activists certainly requires the kind of push-back we saw in these earlier movements. If it doesn't happen in a way that is civil enough for them, I don't really care.

(Cross-posted to Lippmann's Ghost)

Conflict and conservatism on the deficit commission

By Michael J.W. Stickings

It's good to know that many of the staffers working for President Obama's much-ballyhooed deficit commission -- known more pretentiously as the National Commission on Fiscal Responsibility and Reform -- are being paid by "outside entities," as The Washington Post is reporting:

For example, the salaries of two senior staffers, Marc Goldwein and Ed Lorenzen, are paid by private groups that have previously advocated cuts to entitlement programs. Lorenzen is paid by the Peter G. Peterson Foundation, while Goldwein is paid by the Committee for a Responsible Federal Budget, which is also partly funded by the Peterson group.

The outsourcing has come under sharp criticism from seniors' organizations and liberal activists, who say the strategy is part of a broader conservative bias favoring painful entitlement cuts over other solutions. The fears of some liberal groups appeared to come true on Wednesday, when the commission's two leaders recommended significant reductions for Social Security and other social-welfare programs.

Bruce Reed, the panel's executive director, defended the staffing arrangement as fiscally responsible and said the staff includes a broad range of views. Other staffers paid by outside entities include an analyst from the liberal-leaning Economic Policy Institute and a Clinton administration official who now teaches at Johns Hopkins University, he said.

"We've got wonks from across the spectrum who have been working on this issue for years," Reed said. "Every possible voice from left, right or center has a voice on the commission." 

Maybe so, but still. It's pretty clear which way the commission is leaning. Are we just to assume that the involvement of these "outside entities" has nothing to do with it at all? Are we just to trust that everything is on the up-and-up? Please. There are obviously many conflicts of interest here -- but even if there aren't, the perception of such conflicts is enough to destroy the commission's credibility.

Here are some reactions to where the commission appears to be headed:

Mike Lux, Open Left -- "The co-chairs [Alan Simpson and Erskine Bowles] and staff found every conceivable way to screw the middle class in ways big (very big) and small, but barely nicked the bankers who caused the meltdown of the economy, or the wealthy whose massive tax cuts ended the big budget surpluses as far as the eye could see coming out of the Clinton years.

Kevin Drum, Mother Jones -- "Bottom line: this document [the Simpson-Bowles plan] isn't really aimed at deficit reduction. It's aimed at keeping government small. There's nothing wrong with that if you're a conservative think tank and that's what you're dedicated to selling. But it should be called by its right name. This document is a paean to cutting the federal government, not cutting the federal deficit.

John Nichols, The Nation -- "The debate about the future of Social Security has opened, and how progressives respond will decide whether the United States is a civil society or a pirate state where the government's primary role is to take from the poor and give to the rich."

Paul Krugman, The New York Times -- "OK, let's say goodbye to the deficit commission. If you're sincerely worried about the US fiscal future -- and there's good reason to be -- you don't propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies -- goodies that fairly obviously, even without having the details, would go largely to the very affluent.

Jonathan Chait, The New Republic (assuming a much less critical posture) : "[T]he deficit commission's blueprint does have aspects liberals can get behind. It ends all manner of regressive tax subsidies, including the tax preference for capital gains and dividends. That's a huge policy triumph. It protects retirement benefits for low-income workers. It slashes agriculture subsidies. This may not be the best way to reduce the deficit, but it’s far from the worst.

Andrew Sullivan, The Atlantic (enthusiastically in support): "All of which leads to an obvious and compelling political and policy win-win for the president. He needs to embrace this opportunity to end the long-term debt and pivot to the center and call the right's bluff at the same time. There is nothing that would restore Obama's cred with Independents more than tackling his own party's ideologues on the deficit and the debt... Such a breakthrough, I believe, would also galvanize a recovery, restoring long-term confidence in the US economy, and prompting businesses to spend, invest and hire again."

I'm with Mike, Kevin, John, and Paul. This is yet another case of liberals being told that liberalism is wrong and that the solution to America's various ills lies in some Republican-friendly "center," with all the benefits going to the rich and the rest of the country, as usual, getting screwed.

And, in case you weren't aware:

-- Alan Simpson, while relatively moderate for his party, is a former Republican senator; and

-- Erskine Bowles, chief of staff to President Clinton, is on Morgan Stanley's board of directors.

There's your "bipartisanship" -- which, as usual, means "conservative" and "somewhat less conservative."

Where's the progressivism here? Also as usual, it's nowhere to be found, certainly not on the "Democratic" side of things.

I'm hardly a big fan of high taxes (most liberals aren't, even if they acknowledge their necessity), but the best way to cut the deficit is to put in place a progressive tax scale that requires the wealthy to pay their fair share and to focus on rationalizing and reducing military spending. It is certainly not to slash Social Security, which is actually working well to keep millions of Americans out of poverty. But of course the poor, or the needy generally, do not have nearly the political voice the wealthy have -- indeed, the wealthy have an entire political party dedicated to making them even more wealthy (as well as, it would seem, a presidential commission). And, yes, the trickle-down myth is alive and well despite its history of failure: make the rich richer and everything will be fine! Right.

Thank you, Mr. President, for using the cover of bipartisanship to give conservatives so much of what they want. Who won the '08 election again?

Calling the deficit-hawks' bluff

By Creature

Lynn Woolsey on her re-introduction of the public option:

"There is all this concern about the deficit," said Rep. Lynn Woolsey (D-Petaluma), a leading champion of the proposal. "Well, guess what: This would reduce the deficit because it saves so much money."

The public option always made sense, but no one seemed to care about sense when there was an industry to subsidize.

Obama's G20 stimulus pleas ignored

By Creature

Welcome to the dirty-fucking-hippie camp, Mr. President. I sure hope you don't bruise easily.

Vandalism, violence, and deficit reduction: Thoughts on the G20 Summit in Toronto

By Michael J.W. Stickings

I spent the past several days well away from Toronto's downtown core, well away from the G20 protest areas, well away from the security net that effectively divided the city into two. I used to live downtown, near the University of Toronto, and I still work downtown, in a high-security area, but I now live in the suburbs east of the city. I didn't ignore what went on, though. I couldn't. It was all over the news, scenes of a police car on fire, of protesters crowding the streets, of police in riot gear, of the security fences, of vandalism and violence, of tear gas, pepper spray, and rubber bullets, of mayhem much unlike what we are used to here in Canada.

And, in general, my feelings are mixed.

While I do not approve of the vandalism and violence, and while I think that the confrontational methods used by some of the more extreme protesters are counter-productive, I tend to sympathize at least somewhat with some of the prevailing views among the protesters. It's not that I'm anti-capitalist, it's that I object to decisions affecting the very fate of our planet being made inside a security fortress. There is security on Capitol Hill, yes, as well as on our Parliament Hill in Ottawa, but those bodies are democratic. The G20 isn't. The leaders were elected democratically, for the most part, but their deliberations were anything but democratic.

Write the protesters off as "thugs," like Prime Minister Harper did, or anarchists, which some of them are, but their anger and frustration are reflections of something much deeper than anti-government opportunism. Look past the vandalism and violence and what you find is an understandable hostility towards the status quo, along with serious objections to the policies imposed on the world's billions by the leaders of the wealthiest nations.

What did this summit accomplish, after all? Did these leaders agree to do something about poverty, genocide, or climate change? No. They basically just agreed to a set of neo-liberal (a label I dislike but will use for lack of anything better) principles centered around balanced budgets. You can read the G20 statement here if you like. The primary goal is "a full return to growth with quality jobs, to reform and strengthen financial systems, and to create strong, sustainable and balanced global growth," and the most significant agreement was to cut deficits, with government debt "at least stabilized or on a downward trend by 2016," according to Harper. The commitment is voluntary, with an exemption for Japan, which faces serious fiscal problems, and concerns from the U.S., which, under Obama, is (rightly) focused more on economic stimulus than on deficit reduction.

But how to cut deficits? Some countries will do so through tough austerity measures, as the new government in the U.K. has already initiated. Given that raising taxes is often not a viable political option (and it should be noted that many of those in attendance at the summit the leaders of conservative governments, and hence not so inclined towards tax increases: Harper, Cameron, Merkel, Berlusconi, Sarkozy, etc.), the likeliest way to reduce deficits is to cut spending on social programs. And that means disproportionately harming those who need those programs the most, the poorest and neediest citizens of the G20 nations, those without a voice in Toronto, inside the security fortress, those for whom many of the protesters were speaking.

To be fair, the G20 statement does make reference to "providing social protection to our citizens, particularly our most vulnerable," as well as to "supporting the poorest countries during the crisis," but the focus is clear, and I think C&L's Ian Welsh got it right:

It's really, really simple. The rich crashed the world economy. They were bailed out, with their wealth having almost entirely recovered and corporate profits likewise have pretty much recovered. Now, at the G20, the world's leaders are discussing how to make regular people pay for the rich's follies.

The world's developed countries have built extensive public health systems, promised citizens a paycheck for life and erected a welter of protections around some industries and types of jobs. Now their leaders are conferring over a singular dilemma: how to take some of it back without undermining the economies they are trying to sustain.

You notice that somehow, no one is talking about going back to 1950's levels of progressive taxation, with a top rate around 90%. No, what they're talking about is making the middle class and the poor pay for the sins of the rich.

The key thing here to understand is this: there is no crisis for the rich or corporations anymore, therefore as far as they are concerned, there is no crisis.

*****

At the G20, today, what is being discussed is how to take away what's left of your economic future. Ordinary Americans didn't see a pay raise in the last decade. Not only won't they see one this decade, they'll take a loss, and now even the European experiment in taking care of the population is on the chopping board.

This is your future being decided, and no, they don't think you have a say in it.

And that's part of the problem. You don't. Which is not to say that governments shouldn't pursue fiscal sanity, or to suggest that the G20 leaders don't care at all about "ordinary" citizens, but the fact is, there's a massive disconnect between the priorities of the G20 nations and the priorities of the vast majority of their citizens -- and the priorities of the vast majority of people in the world's wealthiest countries weren't under discussion in Toronto, not in any meaningful way.

Even here, even in the biggest city in one of the world's richest and most privileged countries, a city of massive wealth, you find people living in cardboard boxes or sleeping on heating grates. Go just a few blocks from the security fortress and you find poverty, misery, despair. As anywhere else, you find people struggling to make ends meet, to pay the bills, to put food on the table, to take care of their children. You find people just trying to get by, people trying to deal with an economic crisis that they still feel even while their elected leaders talk about slashing social programs and multi-national corporations rack up profits in the billions. You find people for whom the G20 Summit meant nothing, even if, in the long run, and even if the economy improves in macro terms, it may bring them more pain.

And, again, what of climate change, of oppression and genocide, of human rights, of any other issue that may resonate with the "ordinary" citizens who were shut out of the summit? Nothing. Deficit reduction was the name of the game, that and protecting the interests of the global oligarchy that pulls the strings while the rest of us are silenced.

Really, is it any wonder there was such rage on the streets of Toronto over the weekend? Is it any wonder that those who are shut out, even in a supposed democracy, want to have their voices heard?

And it is any wonder the police cracked down to prevent those voices from being heard? As The New York Times reported:

An escalation of aggressive police tactics toward even apparently peaceful protests at the Group of 20 summit meeting led to calls for a review of security activities.

After allowing a small group of people to burn police cars and smash windows unimpeded on Saturday afternoon, many of the 20,000 police officers deployed in Toronto changed tactics that evening and during the last day of the gathering.

There was a notable increase in both the numbers of police officers who surrounded demonstrations as well as more use of tear gas and rubber or plastic bullets. At the same time, there was a visible drop in the number of demonstrators in the city streets.

As a result, the violence by some demonstrators that marred the opening of the Group of 20 meeting did not reappear on Sunday, and more than 600 people were arrested Saturday and Sunday.


"Civil liberties are in rough shape today," said Nathalie Des Rosiers, the general counsel of the Canadian Civil Liberties Association, which had two of its observers arrested and detained. "We will have to have some accountability for what is going on."

In a statement, the Canadian branch of Amnesty International called on governments to review the security measures made for the meeting, including a temporary suspension of various civil liberties in the portion of this city's downtown near the meeting site. 

It's all well and good that there's free speech, and that's essential, but the real issue here, and it explains much of the rage and outrage, is that too many voices are simply shut out of the conversation entirely. After all, you can protest all you like, but they won't hear you and don't care to hear you. It's like banging your head against some mad bugger's wall, as Roger Waters put it in a different context.

And so what can you do? Thankfully, most of the protesters behaved peacefully. Again, I won't go so far as to condone vandalism and violence. And perhaps some consideration will be given to alternative views once democratic parliaments, as opposed to a summit of world leaders, take up the issues at hand. But when you see that you've been shut out, that your leaders have erected security fences to keep you back and brought in scores of police to keep you down, maybe, just maybe, you want to lash out. To me, the story is not just that so many protesters demonstrated peacefully but that so few expressed their rage openly. "Ordinary" citizens, after all, those without a seat at the table, are justified to feel disenfranchised and disconnected, as well as to be discontented with the conditions under whey they are governed.

Much of the focus in the media will continue to be on the vandalism and violence, and on the clashes between police and protesters, but there is much more to what happened than that, and it was all about so much more than that. Sometimes people just want to be heard, after all, and sometimes, even in a democracy, especially with their leaders ignoring them and seemingly taking their very democracy from them, people have to take to the streets.

Quote of the Day: Sheldon Whitehouse on the "tax extenders" bill and the "Republican debt orgy"

By Michael J.W. Stickings

Last night, Democratic Sen. Sheldon Whitehouse of Rhode Island took to the floor of the Senate to address the ongoing Republican opposition to restoring extended unemployment benefits that, under the stimulus bill, expired on June 1. He pinned the blame exactly where it belongs:

I understand the point about the debt and the deficit and the spending. But to me, that doesn't have an enormous amount of credibility, because when President Clinton left office, he left an annual surplus... At the end of [George W. Bush's] term, we had $9 trillion in debt. We would have none of this if it hadn't been for the Republican debt orgy that they went through.

I understand the need for fiscal sanity, too, but at a time of economic crisis -- and we're not out of it yet -- punishing the unemployed is hardly the right thing to do. And it really is ridiculous to think that many of the unemployed are living happily off government benefits. Whitehouse continued:

The notion that you're going to cut off somebody's unemployment insurance and have them go out and find a job is just plain nuts. There aren't a lot of people lying around enjoying the luxury of unemployment insurance payments. They want to be getting to work.

Welfare is always an "allure," as Republicans have put it, but it's also a necessary safety net precisely for times like this. And it's not just the unemployed who will suffer at the hands of the Republicans. As Arthur Delaney of HuffPo reports:

Democratic leaders in the Senate have apparently failed to win enough support to overcome a Republican filibuster of a bill to help the poor, the old and the jobless, despite making a series of cuts to the measure over the past several weeks to appease deficit hawks.

"It looks like we're going to come up short," said a senior Democratic aide on Wednesday evening. "It looks like Republicans are prepared to kill aid to states, an extension of unemployment benefits, and ironically, the Republicans are prepared to kill efforts to close loopholes that allow companies to export jobs overseas."

The legislation, known as the "tax extenders" bill, would reauthorize extended unemployment benefits for people out of work for six months or longer, would protect doctors from a 21 percent pay cut for seeing Medicare patients, and would provide billions in aid to state Medicaid programs.

Come Friday, 1.2 million people will lose access to the extended unemployment benefits, a number that will grow by several hundred thousand every week after that.

As Steve Benen correctly notes, the votes are actually there for the bill. The problem is the filibuster, and the Republicans won't even let the bill get to the floor for a vote:

Democrats appear to have lined up 58 votes, but in the Senate, 42 is greater than 58, even when our economic health is on the line.

In the real world, this means millions of jobless Americans will lose their already-modest benefits, and hundreds of thousands of workers will be laid off over the next year, including teachers, police officers, and firefighters. All of this will happen because Republicans are more concerned about the deficit -- a deficit they created under Bush/Cheney -- than the economy.

It's unpleasant to think about, and I really hope it's not true, but it may be time for a discussion about whether GOP lawmakers are trying to deliberately sabotage the economy to help their midterm election strategy. After all, these same Republicans have supported deficit-financed tax-extenders before -- there's no credible reason to change course now. On the contrary, with the economy struggling to break through, the need for this package is more obvious, not less, if your goal is to actually improve economic conditions.

I think that's a discussion we need to have. Senate Republicans, including the supposed moderates like Susan Collins and joined by "Democrat" Ben Nelson, seem to be doing everything in their power to block economic recovery and destroy the safety net that so many American need, a net that will allow many of them to get back on their feet again. Pat Garofalo at Think Progress writes that at least 200,000 jobs could be lost from withholding aid to state Medicaid programs. And in addition to cutting benefits to the unemployed, the failure to pass the bill, the Republican failure, would lead to dramatic cuts to services all across the country, according to a Center on Budget and Policy Priorities report cited by Garofalo:

Arizona would have to cut funding for its state court system, Colorado's likely cuts "include eliminating state aid for full-day kindergarten for 35,000 children, eliminating preschool aid for 21,000 children, and increasing overcrowding in juvenile detention facilities," while New Mexico "could eliminate a wide range of Medicaid services, including emergency hospital services, inpatient psychiatric care, personal care assistance for the disabled, prescribed medications, and hospice care."

And so on, and so on. And yet Republicans don't seem to care, so focused are a few of them on the deficit and many more of them either on playing politics by trying to sabotage the Democrats' agenda or on slashing government altogether, cutting even essential services like health care and policing. And even significant Democratic concessions haven't won over any Republicans.

It's all quite appalling, and so deeply harmful both to the economy broadly and to the American people, so many of whom will continue to suffer through the worst economic situation since the Great Depression. The stupid filibuster rule in the Senate is partly to blame, for even a party with a large majority that actually wants to do something is stuck, but the blame really does need to be on the Republicans, who seem to have zero interest in compromise and zero interest in doing what is right for the country. It is imperative that voters remember this come November.

Defense spending

By Creature

The Hill reports there's a slight shift towards considering cuts in defense spending. I'm with Cole here, I'll believe it when I see it. But what really gets me is that a guy like Jason Altmire dares to have a "D" next to his name:

“No,” Blue Dog Rep. Jason Altmire (D-Pa.) responded when asked if he agreed with Hoyer’s stance on the defense budget.

“A lot of the things he said I was not in agreement with,” Altmire said. “The first thing we need to look at are cuts to social programs.”

Yes, my hate for Blue Dogs runs deep.

Dumbass of the Week

By Carl

They grow 'em stoopid in Tin-ass-cy:

SO HERE’S A QUESTION: Would a default on Treasuries accomplish what the Balanced Budget Amendment was supposed to achieve, by forcing the government to spend no more than it takes in?

I dunno, Glenn... would shoving a stick in your ass make you smarter than wood?

Bruce Bartlett goes over the reasons this latest moronic trope floated by the Right Wing Talking Trash Elmo doll won't work:

1. The Treasury can never default on the debt.

[...]

2. Even if the Treasury somehow defaulted—that is, failed to make a timely interest payment—it would not achieve what Reynolds and other conservatives wish: an end to all federal borrowing and de facto imposition of a balanced budget by cutting all spending in excess of revenues.

[...]

3. The disruption to financial markets, commerce and the well-being of all Americans from a Treasury default are really beyond my ability to fully describe. But here are a few points to ponder. Interest rates would skyrocket to unprecedented levels, which would cause a collapse of private borrowing and massive capital losses for all bond holders, which include pension funds, insurance companies and foreign central banks, among others. It might be impossible for pension funds to make payments to millions of individuals depending on them for life itself.

Bartlett goes onto mention that the cost of borrowing for the United States would skyrocket, since our Treasuries are back by "the full faith and credit" of the US government, which of course would default as quickly as the bonds.

Reynolds, of course, backpedals in the face of such an exhaustive and detailed analysis of what one can only hope was an opiate nightmate.

But since this has become a fairly common trope among the chattering monkeys on the right wing porch as it ties in neatly with the Teabaggers and the Paulists, you need to be aware of it.

First off, we've already been through a dry run of an American bankruptcy: the stagflation of the late 1970s, early 1980s, caused in large part by the OPEC nations holding the rest of the world hostage: de facto, we were operationally bankrupt as a nation.

How? When the Fed tried to loosen up the economy, there was no proportionate increase in economic activity. The money went to oil. This created an inflationary spiral and next thing you know, we've raised interest rates (the prime reached not only double digits, but approached 20%, a rate usually associated with third world military juntas).

Which only served to dampen down the economy.

By the way, we are currently in the middle of yet another stagflationary period. Oil, again, played a large part in it. Remember $5 a gallon gas? It wasn't that long ago.

Odd, considering we had two oil men running the country at the time it kicked off.

Monetary policy hasn't worked this time, either, as the money supply was pretty much dried up going in, due to low interest rates and the availability of cheap mortgages drying up investable cash reserves.

But I digress into territory not suited for a blog devoted to snarcasm.

Too, defaulting on national obligations is not like going to bankruptcy court because you can't pay your mortgage anymore. China (which has started dumping Treasuries, so beware) isn't about to accept pennies on the dollar in exchange for a clean bill of health.

We will be forced to pay it back in some form or other. If you don't believe me, just think of how we've bullied and badgered third world nations to repay their debts to us, funds that could have been used to improve infrastructure, or for economic development.

You'll note the Bushies only got involved because they wanted Iraqi war debts forgiven, and Iraq sits on the second largest oil reserve in the world.

If anything, defaulting on American treasuries would force even more spending on domestic social programs, while forcing the United States to cut back on its defense programs.

Hm. Maybe it's not such a bad idea, after all!

(Cross-posted to Simply Left Behind.)

Where no man has gone before

By Carl

...at least in the last thirty years:

Reports say when the White House releases their budget proposal, there will be no money for the program that was supposed to return astronauts to the moon by 2020.

Reports say NASA will instead look at developing a new "heavy-lift" rocket that one day will take humans and robots to explore beyond low Earth orbit.

One year ago President Obama had backed a Moon return mission in the NASA budget.

There's an abounding irony in the fact that a Republican president, desperat to reverse his sagging polls numbers amidst the long-standing accusation of intellectual uninterest in the world around him, propsed not only a return to the moon, but an eventual manned landing on Mars, while the Democratic president whose intellectual curiousity teems across his life has proposed stifling that ambition.

The budget, you see, affects more than just our paychecks. It affects our humanity.

I grew up in the Space Age. The world had a future. Space had a future. Mankind had a future.

Forget colonizing other planets in our solar system! Yea, we'd establish outposts and such and do experiments. Maybe hippie communes might spring up, but space had a wealth of resources that we could use to improve the human condition.

Offshoring manufacturing would take on a whole new meaning as we'd head out to the asteroid belt, pick an appropriate rock and as we dragged it back to high earth orbit, begin to refine out metals and chemicals, processes that pollute our environment horribly. The dollar cost of the mission would be more than offset by the real savings to the environment, to the air, earth, and water, to Gaia.

We would beam back energy from solar panels floating at Lagrange points around the earth in stable orbits. No more war for oil. Sure, there'd be money to be made, but if someone tried to corner the market, someone else would fire up a rocket and deploy his or her own satellite.

And that's just the beginning. The technologies that grew out of the space program, everything from Tang to hazmat equipment to the modern computer, have served us well and one can only imagine what new technoloies could come from the needs of the astronauts.

A country is suffering a drought? It might be cheaper to drag a comet to low earth orbit and make it rain into that country's reservoirs than to bring it by the bottle or boatload across a sea. A nation needs a tourist attraction, a way to bring people to it? Well, if it has a nice climate and a lot of flat open space, it could offer to build a spaceport.

The cultural impact of space exploration cannot be ignored. Neither can it be put off. Eventually, someone is going to realize that we don't have a lot of time or space left on this planet, and if we start now, it will be cheaper in the long run. While I can appreciate the budgetary needs of the Federal government in this time of belt-tightening and counting pennies, this is something that needs to be kept on the table year after year, as a reminder of what it means to be human.

(Cross-posted to Simply Left Behind.)

Tenth Avenue freezeout

By Carl

Hmmmmmmmmmmmmmm...

WASHINGTON — President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.

The officials said the proposal would be a major component both of Mr. Obama’s State of the Union address on Wednesday and of the budget he will send to Congress on Monday for the fiscal year that begins in October.

The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.

On the face of it, this budget freeze makes a lot of sense, even if it has the liberal wing of the nation in a flutter.

Look, not to put too fine a point on this, and at the risk of my liberal cred, I think Obama might have a point here: there's only so much we can spend, and unfortunately, much of that stimulus spending, as Joe Klein points out, nearly $600 billion of the $787 billion package went directly to taxpayers and the services they count on day to day.

Much of the rest went to public works projects that will create jobs...once the money starts getting spent. The trouble is, it was left up to Congress to deal with which shovel-ready projects would be picked, a bad idea in the best of times, a worse idea in an era of absolute partian rancor.

We're facing trillion-dollar budget deficits, of which some ten to twenty percent can be attributed to the legacy of the Bush administration... unless of course you want to lay blame for the current recession at his feet as well, in which case, well, 100% of the trillions in annual debt is his. I don't think he's as much to blame for causing this economic collapse as much as he facilitated it.

Economies collapse under all regimes and administrations...except, curiously, Democratic ones, but I digress. It doesn't matter if it's a democracy, monarchy, tyranny, what have you: economies are cyclic.

The budgets he's proposed to freeze amount to about a sixth of annual government spending, so will lower deficits a little. It would be nice, hell, it would be revolutionary, if Obama actually proposed cutting the military budget a little as an acknowledgement that we are no longer fighting two wars, but a war and a half. That would actually make a difference in the deficit.

I don't know how this plays out: what taxes Obama will be forced to raise after the November elections, what actual budget cuts will be made. But I do know that all he really has to play with right now are things on the fringe of the budget and with the budget as frayed as it is, the fringe is a lot closer to whole cloth than we'd like.

We have to have patience here.

(Cross-posted to Simply Left Behind.)

Quote of the Day II

By Creature

"As I said, deficits saved the world." -- Paul Krugman, putting the Right's deficit hyperventilation into perspective.

Get serious about taxes

By Mustang Bobby

E.J. Dionne suggests that the best way to cut the deficit is to raise our taxes:

Every budget analyst knows this, and every politician knows that it's far easier to bemoan deficits in the abstract than to risk spending cuts or tax increases that hurt sizable groups of voters. "There are no more low-hanging fruit," says Tom Kahn, the staff director for the House Budget Committee. "The low-hanging fruit have already been picked. Any tax increase or spending cut is going to trigger opposition from somewhere."

In an ideal world, Obama would come right out and say we'll need broad-based tax increases. But that would be suicidal right now. Witness the reaction to his effort to put a 28 percent ceiling on deductions. His proposal would affect only 1.2 percent of taxpayers, yet even that idea seems to be dying in Congress.

[...]

The task of those who genuinely care about deficits is to make the world safe for tax increases. Under current conditions, it's a whole lot easier for politicians to talk a lot about deficits, and then just let them grow.

The Republicans love to make a big show about how they are the party of fiscal responsibility and cutting taxes and the Democrats are the ones who promote tax-and-spend. Never mind that the largest tax increases in the last generation came from Ronald Reagan in 1983 and that the biggest tax cut so far proposed has been in the budget sent up by Barack Obama; they will have their talking points. They also try to get mileage out of the faux-populism of "it's our money; why send it to Washington?" It's as if the government was some alien occupying force that collects taxes and we never get a dime back from "them." Ironically, the Republicans who complain the most about taxes are, by and large, from states like Alabama and Mississippi, which get the most money back from the government in the form of Medicare, welfare, and other government programs that fill in the gaps that the state can't pay for.

The Republicans' rant about President Obama's plan to let the Bush tax cuts come to an end and raise taxes on those who make more than $250,000 makes it sound as if the world will come crashing down on the "small businesses" who will then have to lay off their entire work force just to pay the IRS. Either they are painfully ignorant of the tax code or they are willfully misleading their listeners. The tax hikes would hit only those who have a net income over $250,000, and it would not be on the entire amount, just the portion over $250,000. As for small businesses, anyone who has even a passing knowledge of how business works would know that the taxes are only on earnings over $250,000, not on the gross income. For a business to make over $250,000 a year, they would have to gross somewhere in the neighborhood of $4 million. That may be a small business to some people, but that's not doing too badly. Besides, anyone who runs a multi-million dollar company but can't hire a tax attorney or an hourly employee at H & R Block, for that matter, to find ways to get every deduction entitled to them doesn't deserve to get a break.

Then there's the old canard about the government being full of waste, fraud and abuse, and they hold up examples of the Pentagon paying $500 for a toilet seat or some such apocryphal tale. However, the latest examples of waste, fraud, and abuse are coming from the government entities of Bank of America, Citibank, and A.I.G. And when they talk about the red tape and inefficiencies of the government, they like to say something along the lines of "Would you like your health care run by the government?" Well, considering the fact that Medicare has administrative costs that run to about 3% of their annual expenditures as compared to an HMO, which typically spends upwards of 15% if not more, then, yes, I'd like the government to run the health care system, at least as far as efficiency is concerned. The fall-back is to hold up the Post Office as another example of inefficiency. Really? When I can send a birthday card door-to-door to my Mom in Ohio in two days for under fifty cents via UPS or Fed Ex, let me know.

Sure, paying taxes is not everyone's favorite duty, and a lot of people would like pay as little as possible -- so would I. I would also like to fly first class for free, not pay rent on my house, and, while you're at it, have the physique of Michael Phelps. It ain't gonna happen (especially the last part). But if we're going to have the services we've come to expect -- indeed, become entitled to -- such as decent roads, a strong defense, safe airways, secure financial institutions, clean water, good and productive schools, and help for those who can't help themselves, then we have to pay for them. The government, be it state, local, or federal, has to get the money from somewhere, and if it's not in the form of taxes, we have to borrow it from somewhere else. Lately it's been from the Chinese. Not to go all xenophobic, but I would rather have the money come from us rather than be in hock to a country that doesn't have the same outlook on basic forms of human rights that we do -- or at least aspire to.

To quote Oliver Wendell Holmes, Jr., "taxes are the price we pay for a civilized society."

(Cross-posted from Bark Bark Woof Woof.)

On the clock

By Carl

Each morning, I sit and read my e-mail in the bathroom.

This morning, at precisely six, ThumbPer meowed. He meowed the meow of a cat who was patiently waiting his turn. It was time to go meditate with a cup of coffee and a cat.

At precisely six. I wondered how he knew, what biological mechanism made his clock tick at that exact moment? Can he read a clock? Does he own a watch?

Then I began to think about the world. We're all run on clocks and calendars. Most people in this country, and many more in the world outside it, have to live by a clock. We log into work, we run to catch a train, our TV shows are on at a specific time.

And then I thought about my job, and something odd occured to me: the people who own the company, they aren't really beholden to clocks. Things get done when they want them to get done, on their schedule. Yes, to a degree, where necessary they have to genuflect to time.

But not as often as you might think.

All this leads me to some thoughts about Barack Obama's address last night:

[W]e have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.

Well, that day of reckoning has arrived, and the time to take charge of our future is here.

He's right, you know, and he didn't single out anybody, didn't exempt you or me, the rich or the poor, the bankers or the brokers (well, maybe the bankers a little), or Democrats or Republicans.

We've all lived as though time was a renewable resource. But it's not. Time is the avenger. Time is what happens when you've lived one way, always looking in the other direction. Time is the wall you run into.

The most curious struggle within life is to balance two things: now and then.

We should all plan for the future and make contingencies for what happens then.

We should all "live in the now," as we say in acting classes.

Funny thing is, we've failed miserably at both.

We've had a thirty year headstart on renewable energy, a fairly simple, logical, and healthier alternative to burning mushed dinosaur soup. We import more of that goo than ever before.

We've had twenty years of warnings with respect to the rising costs of healthcare, and the declining wages to pay for them. Yet here we are, watching an American go bankrupt every thirty seconds because he or she can't afford to pay for the God-given gift of a healthy life.

We've had decades of warnings with respect to global warming and the twin disaster of sudden ice ages (and conservatives? These are not conflicting ideas. The earth can warm up as a whole while we plunge into an ice age in the northern and southern temperate zones), yet our planet is getting hotter and the warmest ten years on record have been the past ten.

And we've sat on our asses and did nothing, except mock Al Gore, mock Jimmy Carter and mock Hillary Clinton.

(Hm. Those are all Democrats! But I digress...)

The Obama stimulus package/budget announcement tries to reconcile these two aspects of time. The stimulus package is for the now. The budget is for the then.

It is a bold and grand vision, to be sure, and the real test comes in a year or two, when the economy has (we hope) recovered and the deficit inches down at first. Can Congress be mature enough to sit on its hands and continue to tinker with the deficit or will the special interests begin to ratchet up the rhetoric, which actually began with Bobby Jindal's amateurish and childish (Fox's words, not mine!)response to Obama's speech last night?

Time waits for no one, and it is on this basis that we, the people, must take control of our country again. It is we who must keep our Congresscritters responsible and it is we who must keep Barack Obama responsible (admittedly, I sense this will be the easier task). And it is we who must keep our local politicians responsible for the funds they receive from the Feds and from our tax dollars.

We have to get off our asses and own our time on this planet. Own the now. Own the then.

If the farm subsidy to Big Agra is about to be snuck through a late night session by the critters from the cornfields, then it's up to us to rally up the rest of the nation to put a stop to it.

If the Defense Department is insistent on buying yet another legacy weapon for a war they fought twenty years ago, it's up to us to call them on the carpet.

It's our future, not our elected officials, who, like my bosses, have forgotten what a clock really is.

A marker in the river of our lives that delineates the now from the then. We live on the clock. We need to act like it.

(crossposted to Simply Left Behind)