House Speaker John Boehner appears to be under attack from an intransigent House Republican caucus that will not allow him to retain any credible leadership if he agrees to a debt and deficit reduction plan that includes any tax increases of any kind. While select Republicans in the Senate agree with the deficit commission recommendations and the Gang of Six proposal—which recognizes the need to increase revenues to deal with escalating deficits—, radicals refuse to agree to any compromise. It seems Speaker Boehner is being held hostage by a radical Tea Party revolt in his party, whom he is not prepared to anger.
Part of the problem is rhetorical. On issues of debt, deficit, entitlements and security, routine use of hyperbole has so distorted debate, that much political discourse now distorts what is actually happening in policy. Republican Sen. Tom Coburn (OK) told Meet the Press, falsely, that “the government is twice as big as it was ten years ago; it’s thirty percent bigger than it was when Pres. Obama took office.”
Continue reading “Boehner Stands Alone between Reason and Unreason”
The Bipartisan Policy Center has found that if there is no agreement to raise the debt limit by August 2, the Treasury Department would fail to pay 44 percent of its obligations. That 44 percent of government spending, over a year, is equivalent to a real decline in GDP of 10 percent. The number is that high because the Treasury Department has been making fiscal adjustments since March, in order to stave off default. Those adjustment have been pushed as far as possible and cannot continue to push back the deadline, beyond August 2.
Continue reading “Default Means 44% of Bills Unpaid, 10% Decline in GDP”
There are competing theories about what makes for good economic stimulus, and there are practices that work well and which don’t work very well. We know that tax cuts are not very stimulative, because they take a long time to show up in people’s bank accounts, and they are comprised of money that was already … Continue reading Why We Should Have a National Infrastructure Bank
The House majority leader Eric Cantor (R-VA) recently published an op-ed, in which he argued that “If Washington actually had the discipline to live within its means over the long term, every American citizen would not owe $46,000 toward the national debt.” The rhetoric is effective, but the logic is flawed; not every American “owes” an equal share of the national debt.
The national debt is what the federal government owes in long-term interest on government-backed bonds, Treasury bonds. Long-term Treasury bonds pay out over several decades, and have (thanks to the high credit rating of the United States government) a very low rate of interest. The bonds are used to finance spending in the short term for which there are no sufficient tax revenues in reserve.
Continue reading “Not Every American “Owes” the Same on the National Debt”
The road to economic recovery must run through major new infrastructure upgrades, innovation and development. The American infrastructure was once the envy of the world, a valiant testament to the ingenuity and collaborative muscle of a free people; now, it is crumbling [pdf] from malignant neglect, and the cynicism of our political system’s dealings with money.
Infrastructure spending was once part of the central mission of building a great nation, open to trade and competition, where free people would migrate, ship, travel and explore, according to their own free will, imagination, and opportunity. Now, that embarrassment of riches is little more than embarrassment, and the resulting confusion over how we let such a vibrant landscape slide so far.
Continue reading “Once World-leading Infrastructure in Decay: the Road to Recovery”
The so-called “Ryan budget plan” —as recently as last year considered a radical, fringe proposal, even by top Republicans, but in 2011 approved by the Republican House majority as their official legislative plan for the nation’s fiscal policy— calls for eliminating Medicare and replacing it with a system of vouchers to lower the cost of buying private insurance.
The plan has already stirred a nationwide revolt in public opinion against the new Republican majority, and turned one Congressional district, not lost by the party in over a century, decidedly Democratic, despite the disproportionately Republican makeup of the interim electorate. But the ire of seniors and the non-affluent generally is just one of the perils of the plan.
Continue reading “The Severe Economic Danger of Replacing Medicare with Vouchers”
The Tea Party movement, which claims it is driven by a resistance to taxation, is really motivated by a widespread sense of economic disenfranchisement, that is now reaching everyone except the superrich. The populist urgency that underscores all of the Tea Party’s energy is not inherently linked to Grover Norquist’s anti-American “Club for Growth”, but the movement has no leader honest enough to openly demand progressive policy outcomes.
Instead, the popular movement has been co-opted by the establishment crowd that caters to corporate interests, foreign and domestic, and which seeks to shift the tax burden away from wealthy multinationals and billionaire investors, and toward the average American middle class and working family. While many Tea Party adherents say they are independent voters angered by corporate greed and government spending, they have routinely and unquestioningly signed up for rapacious budget reform that continues the pattern of transferring most Americans’ hard-earned household wealth to mega-corporations.
Continue reading “Tea Party Populists Should Demand Progressive Outcomes”
The view taken by some in Washington that major reductions in the United States’ national debt can be achieved without addressing revenues is essentially a pledge to do nothing serious about the debt or deficit. The reason: the ideology of supply-side tax-cut-only social policy not only requires, but admires “deficit spending”.
Some critics of this way of thinking, most notably fiscally conservative, pro-middle-class Republicans, have called it “voodoo economics”—a mystical and unverifiable faith tradition posing as economic policy, which only serves to divert wealth away from the middle class, draining the federal budget to deliver wealth to the already wealthy.
Continue reading “Refusal to Deal with Revenues is Refusal to Deal with Debt”
There is only one reason to “slash” budgets, due to fiscal hardship provoked by irresponsible tax giveaways, lawless market manipulation and the ensuing economic recession: the same failure of imagination and recklessness that led to the economic collapse of 2007-2008. There is quite literally no corner of this country that is so “broke” that it is “in danger” of collapse.
The rapidly spreading “budget emergency” is emergent only in the sense that it is suddenly the thought engine driving one major party’s ideological and partisan attack on the economic and political levers that give middle class Americans influence over their government.
Continue reading “The Only Reason to Slash Budgets is Failure of Imagination”
After 30 years of re-engineering our nation’s economy and tax code to deliver huge benefits, free of charge, to the wealthy, the most massive transfer of wealth in the history of the world —a transfer of wealth that has led to now catastrophically failed wealth disparities between the wealthiest and the poorest—, we have not seen the wildly prolific job-creation that was promised. Indeed, we have seen our manufacturing base stripped away piece by piece and our middle class society systematically eroded.
Now, after 10 years of massive tax breaks for the wealthiest people in the history of humanity, we have seen a further concentration of wealth and a further erosion of the open market for employment and innovation. The 400 wealthiest people in the United States now control more wealth than 155 million people at the other end of the socio-economic spectrum combined. The tax cuts that were supposed to be given to the “supply side” were never given to the supply side at all, only to those that seek to own it.
Continue reading “Tax Cuts for the Rich have NOT Created Jobs”