The JOBS FIRST Deficit Plan

See the JOBS FIRST Deficit Plan: Report And Recommendations Of The Citizens’ Commission On Jobs, Deficits And America’s Economic Future |
Read what RJ Eskow wrote about it: Jobs First! Any Other ‘Deficit Plan’ Sells America Short
A key point: all of the “serious people” deficit plans cut the budget in ways that kill the economic growth that underlies their own deficit reduction projections. They cannot succeed, even while gutting America’s jobs, economy and middle class. Not to mention driving the poor into the streets.

Extend Unemployment Benefits Not Tax Cuts For Wealthy

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
In a stunning public display of just who our government works for and who it does not work for, unemployment checks for people out of work longer than 26 weeks run out tomorrow night. Congress, meanwhile, is caught up in a debate over extending a special tax break for the few people making more than $250,000 a year.
This is the situation. Here is a chart of the number of people unemployed for 26 weeks or longer: (click to enlarge)

Here is a chart of the economic divide, showing members of Congress receiving employment benefits from Wall Street: (don’t click the pig is big enough already)

Yes, the extended unemployment benefits that go people who have been unemployed more than 26 weeks will run out at the end of November – tomorrow night. Congress did not extend this program because Republicans blocked it, saying the cost is too high, since we spent so much money making sure that the banksters continue to receive their bonuses. Instead of acting on extending these unemployment benefits Congress is currently debating extending a special tax break that goes only to wealthy people making more than $250,000 a year.
The Human Cost
The terrible human cost doesn’t even get considered. According to the Ayn Rand terminology that conservatives favor, considering the human cost would be wrong and would enable the parasites (us) to feed off of the producers (the wealthy few).
Pennsylvania: Food pantry organizers hope stockpiles hold up in case unemployment benefits run out,

Unless Congress extends unemployment benefits, an estimated 83,000 people will see their benefits run out in December and another 200,000 in the first four months of 2011, according to the state Department of Labor and Industry.

Kentucky and Indiana: Thousands in Kentucky and Indiana face lapse of unemployment benefits,

Amid an anti-spending atmosphere in Washington, funds to extend unemployment compensation for more than 33,000 Kentuckians and nearly 67,000 Hoosiers are likely to run out next month.

Maryland: Benefits due to end for thousands in Md.

Thousands of Marylanders face being cut off from unemployment benefits next month — just in time for the holiday season — as Congress remains undecided on whether to extend the payments in one of the worst job markets in decades.
An estimated 2 million people nationwide are slated to lose benefits, including 14,000 in Maryland. And more than 30,000 laid-off Maryland residents will exhaust their benefits early next year. The phase-out is happening because a federally funded program that gave residents payments beyond the normal 26 weeks lapses on Tuesday.

Iowa: Interactive map shows unemployment by county,

Extended federal benefits lapse on Nov. 30, giving Congress only two days to pass an extension. If they fail, hundreds of thousands could lose benefits. Failure to pass an extension would mean nearly 44,000 Iowans will see an immediate reduction in benefits and 8,700 Iowans will be prematurely cut off completely. Every week beginning Dec. 1, another 1,500 Iowans will lose their benefits.

Flint: Many Genesee County families could lose unemployment benefits without vote from Congress
Grand Rapids: With unemployment benefits to end this month, Gov. Jennifer Granholm makes plea for extension,

Michigan, with the nation’s second-highest unemployment rate at 12.8 percent, would see 168,520 unemployed workers lose their benefits between December and April 30, according to new figures from the Michigan League for Human Services. But even if an extension is granted, 13,011 will lose their benefits because they will have received the maximum 99 weeks of assistance.

Ohio: 2,332 Muskingum County residents face losing jobless benefits,

Statewide, 301,404 people will lose jobless benefits in the same window.

Arizona: Many Arizonans on verge of losing jobless benefits,

PHOENIX — About 90,000 Arizonans will lose their unemployment benefits soon unless Congress passes an extension, according to the Arizona Department of Economic Security.

Alabama: Unemployment expiration could leave thousands without benefits,

Unless Congress extends unemployment benefits by Nov. 30, Alabamians could begin losing unemployment compensation and nearly 58,000 residents could be off the rolls by April.

Mississippi: Editorial: House failing the jobless,

An effort to extend unemployment benefits past Nov. 30 for an estimated 53,000 Tennesseans, 8,000 Arkansans and 6,600 residents of Mississippi fell short of the necessary votes in the House of Representatives last week.

Colorado: 150k unemployed Coloradoans at risk of joining more than 26k with no UI benefits,
North Carolina: Unemployment Extension Standoff Makes NC Woman ‘Feel Like A Pawn In A Chess Game’,

“My last check will be the week ending Nov. 30 unless they come back on Nov. 29 and miraculously vote an extension,” said Millen, who lives in Charlotte, N.C.

Will Congress act before tomorrow night and extend unemployment benefits to people who are suffering because of the greed of a few?
Action Items
Click here to call your members of Congress and demand they act!
Sign this petition to Congress: Continue the Federal Unemployment Insurance Programs
Sign the petition: Tell Congress: Don’t extend the Bush tax cuts for the wealthy
Sign up here for the CAF daily summary.

Comcast Charging Netflix A Fee To Deliver Movies

Netflix Partner Says Comcast Fee ‘Threatens’ Open Internet –,

Level 3 Communications, an Internet networking company that recently signed a deal to deliver movies to Netflix customers, said Monday that Comcast has effectively set up a tollbooth around its broadband Internet network.

This is what is coming if the FCC or Congress doesn’t require “Net Neutrality.”
Worse, Comcast, ATT and others can stop letting their internet customers get to websites like DailyKos, Redstate or others that take political positions they don’t like, or that might threaten their profits — like advocating for Net Neutralty. Unless you think that giant corporations won’t use their power to do things like that.

Radio Show Today 11:30PST 2:30EST

I’ll be doing my weekly segment on the Fairness Doctrine radio show today at 11:30 PST (and for those on the East Coast who have trouble adding 3 on a clock) 2:30EST.
I will be talking about tomorrow’s release of a Citizen’s JOBS and Deficit Commission report. (Note the word JOBS in the title, unlike certain other deficit commissions.) This report was discussed in this NY Times story today, Liberal Groups to Propose Routes to Smaller Deficit. The report is available here (pdf).
If you are not in an area where the show is broadcast you can listen live on CyberstationUSA
The call-in number is 617-328-3386
Click here to find the show on Facebook.

Dare Call It Sabotage?

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Are they there to govern, of just destroy? As Washington works through its “lame duck” session and prepares for next year’s new Congress, there are signs that the government-haters are preparing some serious hating on government itself.
The country needs to get moving. But conservatives, rewarded in the midterms for a strategy of obstruction, are bent on stopping everything and turning back the clock. For two years they followed a strategy of blocking everything and blaming the President for not making people’s lives better. The strategy succeeded and now they are determined to carry it through to the next election. They are blocking an extension of unemployment benefits, calling for an end to ongoing infrastructure development like high-speed and commuter rail and alternative energy, and have made it clear that any new efforts to stimulate the economy are out of the question. Many are starting to worry about the terrible effect these positions will have on the economy, and are calling it deliberate sabotage.
Destroy the Country to Save the Country?
In Planning for the Worst, Matt Yglesias wrote that the White house should plan for “a true worst case scenario of deliberate economic sabotage.”
Zach Carter writes at CAF, in Ben Bernanke And Conservative Economic Sabotage,

The Republican Party’s newfound political assault on Ben Bernanke is a grim reminder of the actual conservative economic agenda for the next two years. The midterm elections taught Republicans a destructive lesson: With Democrats in power, the worse the economy gets, the better Republicans do at the voting booth. Economic sabotage is the essential Republican strategy for winning the White House in 2012. They will block every effort to actually improve the economy they can, and make a big show out of criticizing any economic aid they can’t block.

Steve Benen has been writing about this at the Washington Monthly Political Animal blog. In NONE DARE CALL IT SABOTAGE, Benen wondered if Republicans are actively sabotaging the economy to help keep Obama from being reelected,

This general approach has shifted from hoping conditions don’t improve to taking steps to ensure conditions don’t improve. We’ve gone from Republicans rooting for failure to Republicans trying to guarantee failure.
[. . .] If a major, powerful political party is making a conscious decision about sabotage, the political world should probably take the time to consider whether this is acceptable, whether it meets the bare minimum standards for patriotism, and whether it’s a healthy development in our system of government.

Digby’s response to these, Virtuous Sabotage, is that Republicans are “blatantly proclaiming themselves to be virtuous by undermining the national interest in order to win elections.” She brings up the media’s complicity in this,

I think it’s just another step in the degradation of our societal norms. We are not living in a country anymore in which there is even a consensus about something as immoral as torture, so why should political sabotage be beyond the pale? And the mainstream media, which Benen points out should be charged with bringing some perspective to these issues and calling attention to the fact that the Republican Party is actively working to undermine the national interest, is so deep into their “Church of the Savvy” that they literally laugh at this phenomenon and then proceed to call balls and strikes as if it’s a sport to find out who can win with the most cynical strategy.

Obstruction Morphs Into Destruction
Conservatives, watching only FOX, listening only to right-wing radio and reading only far-right blogs have gone beyond just obstruction as a campaign tactic and whipped themselves into an anti-government, anti-tax, anti-Obama frenzy. Obstruction is giving way to demands for destruction. They have raised the rhetoric to such a level that many of their “Tea Party” supporters will only be happy if the government is destroyed and corporate anarchy prevails.
The rhetoric has reached such a level of extremism that it is difficult to describe the things they are saying to people who don’t follow the news. Bloggers, activists and general followers of news will confirm that if you try to tell people what the “baggers” and their elected representatives are saying they think YOU’RE crazy! It does sound extreme when you try to describe the things they are saying.
An immediate casualty of the right’s extremism may be the START treaty. Egged on by Rush Limbaugh, who said on his show that the Russians have never honored a treaty, and conservative echo-organs like the Heritage Foundation, writing last week that claims President Reagan would have supported the treaty are a “myth” from a White House “in campaign mode,” conservative Senators are opposing the treaty. Senator Richard Lugar of Indiana, ranking Senator on the Foreign Relations Committee is warning that this opposition is dangerous for the country. Many other senior Republicans, including Brent Scowcroft, former Secretaries of State Colin Powell , James Baker, Henry Kissinger and George Schultz, Reagan Chief of Staff Kenneth Duberstein, Reagan Chief of Staff Howard Baker, have joined him urging ratification of the treaty. Former Missouri Senator John Danforth even says Republicans lately “have gone so far overboard that we are beyond redemption.” For his statesmanship the Tea Party is targeting Lugar.
The Dream: No Government At All
For many of the new breed of conservative government itself is the real target. Rush Limbaugh, on his radio show last week, was telling his listeners that we don’t need government at all, that things worked much better in the “wild west” before government showed up and ruined the party. Meanwhile many conservatives are now devotees of Ayn Rand, who denigrates democracy and government as “collectivism” and “statism,” and these ideas and the cult-words that describe them echo through the Tea Party. Glenn Beck regularly feeds Randian rhetoric to his audience.
Right now people who pay attention to what conservatives are saying to each other are warning there is every indication that the conservatives are going to force the country to default when the “debt ceiling” comes due for increase early next year. The effect of such a move would extend far beyond “just” a government shutdown, a default by the U.S. threatens the entire world’s economy. But if you read their blogs, listen to their radio shows and talk to their supporters it’s apparent that they have talked themselves into a corner on this and any vote to raise the debt ceiling will be seen as total betrayal. Former Senator Alan Simpson, for one, is ecstatic. “The debt limit, when it comes in April or May, will prove who’s a hero, and who’s a jerk and who’s a charlatan and who’s a faker,” he said recently.
Paul Krugman, in There Will Be Blood, writes about Simpson’s comments, and warns of the seriousness of the consequences if conservatives get their way on the debt limit,

Think of Mr. Simpson’s blood lust as one more piece of evidence that our nation is in much worse shape, much closer to a political breakdown, than most people realize.
… Now, you might think that the prospect of this kind of standoff, which might deny many Americans essential services, wreak havoc in financial markets and undermine America’s role in the world, would worry all men of good will. But no, Mr. Simpson “can’t wait.” And he’s what passes, these days, for a reasonable Republican.
The fact is that one of our two great political parties has made it clear that it has no interest in making America governable, unless it’s doing the governing. And that party now controls one house of Congress, which means that the country will not, in fact, be governable without that party’s cooperation — cooperation that won’t be forthcoming.

What Is Endgame?
Sara Robinson, in her widely-read post, None Dare Call It Sedition, warned that the right was getting out of control,

This is sedition in slow motion, a gradual corrosive undermining of the government’s authority and capacity to run the country. And it’s been at the core of their politics going all the way back to Goldwater.
This long assault has gone into overdrive since Obama’s inauguration, as the rhetoric has ratcheted up from overheated to perfervid. We’ve reached the point where you can’t go a week without hearing some prominent right wing leader calling for outright sedition — an immediate and defiant populist uprising against some legitimate form of government authority.

After describing numerous calls to violence, the more-frequent appearance of weapons at right-wing political rallies, the growth or militias, Robinson writes,

For years now, we’ve dismissed all of this as crazy talk, the rantings of a loony fringe that will never get enough traction to become a material threat to our democracy. But we’re well past the point where it’s no longer quaint and funny, or an embarrassing breach of democratic etiquette that polite people should just ignore.

So I want to ask if just getting Obama out of office is the endgame — or is it turning into more than that? When you throw in that many of the Tea Party right are saying they will shut down the government if they get the chance, and will vote against the debt ceiling — forcing the government to default and causing economic chaos worldwide — you have to ask if destruction of government and the resulting chaos is the goal? Force the country to be ungovernable, angry and unstable with lots of desperate people running around in a general chaos? Breaking society apart so they be the supermen who step in and reform it in an Ayn Randian image? A new conservative order rising out of chaos is a recurring theme in right-wing mythology and sounds too much like the Turner Diaries for me.
Or maybe they just aren’t thinking things through to the point where they understand the consequences of their increasingly extremist rhetoric and positions.
What Can We Do?
But what do we do about it? The conservatives live in a bubble, hearing only Limbaugh, seeing only FOX and reading only right-wing blogs. They aren’t going to let themselves be reasoned with. Any one trying to work out problems is labeled a RINO and dismembered. The media will only say “both sides do it.” The public is bombarded with corporate-funded smear-ads, telling the public that Democrats voted to cut their Medicare, and the candidates elected by those ads then turn around and cut their Medicare, to give those same corporations another windfall.
The only thing that will work is public pressure. To accomplish this we will have to reach the public ourselves and that is going to take some work, and some money. More on this soon.
Sign up here for the CAF daily summary.

Tax The Rich: A Deficit Plan That Doesn’t Hit We, The People

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Here is MY deficit-reduction plan. This plan does not reflect the views of anyone but myself — and maybe half the population. Unlike deficit plans from the “serious people” in DC, this one doesn’t annihilate the poor and gut Social Security and the middle class while passing even more of the benefits of our society up to a few at the top.
1) Restore pre-Reagan top tax rates. We didn’t have massive deficits until we reduced the top tax rates.
2) Income is income. No more reduced capital gains tax rate. The incentive to invest should be to make a bunch of money from a good investment. The reason there is a low capital gains tax rate is that the wealthy get most of their income from capital gains. And the reason they get most of their income from capital gains is there is a low capital gains rate. The resulting income shifting schemes are a drag on the rest of us. (Also applies to dividends.)
3) Income is income. Inheritance income should be taxed as income, except there should be a “democracy cap” on how much someone can inherit. We decided not to have an aristocracy when we founded this country so we shouldn’t have one.
4) Businesses should be taxed or not taxed, but not taxed AND not taxed. They shouldn’t be able to use “double Irish” or “Dutch sandwich” or operate out of PO boxes in Bermuda or the Cayman Islands. (Bonus, this also helps reduce incentives to send our jobs and factories out of the country.)
5) If you don’t pay your taxes We, the People won’t pay to provide you with services. We can start by not allowing you to have a driveway that connects to public streets, or water/sewer hookups or mail. Also we won’t enforce any contracts for you, including the one that says you “own” your house(s). And no government-developed Internet for you.
If companies like Google want to “double Irish” and “Dutch Sandwich” us or operate out of PO boxes in tax havens, we shouldn’t let them use government services like courts, or the government-developed Internet. See how well they operate without access to roads (that includes for employees to get to go to work.) How about withdrawing the limited liability protection that investors in corporations receive? And of course no protection for “intellectual property” or trademarks. Oh, yeah, no access to anyone who went to a school that used tax dollars. And no government services means no sea-lane protection for your products shipping from Chinese factories, by the way.
6) Speaking of sea-lane protection, why do we have a military budget comparable to when we faced nuclear annihilation by the Soviet empire? Bases in Germany and Japan? And why can I go to this website, pick a DC-area zip code, say 22314, and learn that “Dollar Amount of Defense Contracts Awarded to Contractors in this Zip Code from 2000 to 2009: $7,086,397,848.” Seriously, scroll down the page and look at some of the contracts and amounts awarded. I suspect there’s some serious deficit reduction to be found in the military budget. A comprehensive and very public audit of where all that money has been going since, say, 1981 might take a chunk out of the debt problem all by itself
7) I could start listing all the corporate subsidies, tax breaks, monopoly grants, schemes, contracts, etc. that we pay for, but I think you get the idea. How about calling bribery by its name: bribery, and doing something about it?
8) To the extent that implementing this plan does not clear up the deficit and start paying off the debt, how about a yearly national property tax on all individual holdings above, say, $5 million, with the tax rate progressively increasing as total wealth increases, and keep doing this each year until the debt is paid off. Perhaps start at 1% on $5 million, 2.5% at $10 million, 5% at $50 million, etc. (Hedge fund managers and investment bankers start at 50% and go up, just for the heck of it. We can call this the “get the money from where the money went tax.”)
So there is MY deficit-reduction plan. Or, instead, we could do what the “serious people” deficit-reduction plans do: cut services for We, the People, cut Social Security, cut health care, cut education, cut infrastructure, cut the things that make life better for people, and give all the money to a few at the top. Take your pick.
Sign up here for the CAF daily summary.

Does It Matter What The Public Wants Or Needs?

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Does it even matter what the public wants anymore?
I guess that’s a rhetorical question these days because more and more obviously the answer is no. It matters what the plutocrats want, and they know how to get what they want. Public opinion is “engineered” or at least “managed.” When it can’t be managed it is ignored and the effort shifts to our elected officials, who are led to believe the public wants what the plutocrats want using elite opinion leaders, astroturf, front groups or flat out cash.
According to polls (and most of these by overwhelming margins):
Things the public doesn’t want:

  • Tax cuts for the rich. For example, this morning’s Progressive Breakfast hilited:

    Another poll shows support for ending Bush tax cuts for the wealthy. McClatchy:”…51 percent want to extend the tax cuts only for households making less than $250,000 a year, and 45 percent want to extend the tax cuts for all … Those who want to extend all of the tax cuts, including for the wealthy, include Republicans, tea party supporters, conservatives, Southerners and Westerners, Independents were closely divided, with 49 percent for extending only the ‘middle class’ tax cuts, and 48 percent for extending all of them.”

    P.S. Campaign for America’s Future and CREDO Action have a petition, Tell Congress: Don’t extend the Bush tax cuts for the wealthy. Click the link, and add your voice.

  • Cuts in social security. Isaiah Poole wrote last week, Nobody’s Buying The Cut-Social-Security Line,

    A whopping 82% of respondents in the poll oppose Social Security cuts for the purpose of deficit reduction, while only 15% support cuts. What’s particularly telling is the striking uniformity of opinion across the political spectrum: 83% of Democrats, 82% of Republicans, 78% of independents and 74% of Tea Party supporters.

    P.S. Campaign for America’s Future has a petition, Tell President Obama to Reject Social Security Cuts. Click the link and add your voice.
    P.S. Strengthen Social Security is holding a National Call Congress Day on November 30. Click for details.

  • Cuts in Medicare. Republicans figured this out, and ran ad after ad after ad (after ad after ad) telling voters that Democrats should be thrown out of office because they cut $500 billion from Medicare. You saw the ads. (and saw them and saw them and saw them.)
  • Cuts in anything. (Actually, polls show that the public wants cuts in foreign aid.)
  • Corporate-written “free trade” schemes. As Leo Gerard points out in Corporate Rewards: Controlling U.S. Trade Policy,

    In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

    Things the public wants:

  • Jobs. The official unemployment rate is 9.6%. The total including “underemployed” is 15.9%.
  • Unemployment benefits extended. Poll: Majority of voters support another extension of unemployment benefits,

    In a poll released Monday, 73 percent of voters say it’s too early to cut back benefits for those who are struggling to find work as unemployment rate hovers at 9.6 percent….

  • A plan to revive American manufacturing. Election Day Poll: Voters Weren’t Backing Extreme Right Agenda,

    Eighty-nine percent of those surveyed agreed with the statement that “America is falling behind” in the global economy and that “we need a clear strategy to make things in America, make our economy competitive, and revive America’s middle class.”

  • Rebuild America’s Infrastructure. From the poll cited above,

    Significant majorities in the poll also supported new investments in infrastructure through a national infrastructure bank, and a five-year strategy for reviving manufacturing in America

    So there are things the public clearly wants and doesn’t want. These things are significantly at odds with the things the plutocrats want. If we are still a democracy we will get the things the public wants. If we have completed the transformation to a plutocracy we will get the things the plutocrats want. That’s the definition of the terms.
    Sign up here for the CAF daily summary.

  • The Shock Doctrine Push To Gut Social Security And Middle Class

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
    Today’s Washington Post has punch two of a one-two punch. Punch one was the Simpson/Bowles “plan” to cut Social Security, cut middle-class tax breaks and programs (and dramatically cut taxes on the rich.) Punch two is pushing this plan hard with headlines claiming this solution is actually popular, while shutting out voices who explain why we shouldn’t do this. This is full-on Shock Doctrine, wait for an emergency like the terrible recession so people are in shock and want solutions, and then change everything so fast they can’t respond while telling them how this is good for them.
    This is how they do it, folks, demonstrated by this story in today’s Washington Post: Consensus is forming on what steps to take in cutting the deficit,

    After an election dominated by vague demands for less debt and smaller government, the sacrifices necessary to achieve those goals are coming into sharp focus. … Smaller Social Security checks and higher Medicare premiums. [. . .] the plan unveiled this month by co-chairmen Erskine B. Bowles … and Alan K. Simpson … has been respectfully received with a few exceptions by both parties. Its major elements are also winning support from a striking line-up of commentators. [. . .] The strange bedfellows are a “testament to the moderate nature” of the ideas under discussion.

    Consensus? Sharp focus? Here’s your “sharp focus”: The public hates this!
    That headline is the manufactured reality. The real reality is that the public just hates this, and has voted against and will vote against politicians who push it.
    Last month you saw campaign ad after ad hitting Democrats who “cut $500 billion from Medicare,” and Democrats lost the senior vote and the midterms. The public hates this.
    A recent Greenberg Quinlan Rosner Research report showed that an overwhelming 69% of voters agreed that “politicians should keep their hands off Social Security and Medicare” when they address the deficit. The public hates this.
    Only 6% of the public says the government’s priority should be deficits now. The public hates this.
    An AARP poll finds that 90% of people aged 18 to 29 say Social Security is important. The public hates this.
    An NBC/WSJ poll finds that 57% are against cutting Social Security no matter how bad the deficit is. The public hates this.
    A USA Today poll finds that the public by 66/31 says don’t cut benefits to fix the deficit. The public hates this.
    I can continue citing poll after poll; there are no polls that show the public is in any way behind this.
    It’s Clear: The public hates this and will vote out any politician who does this. If you think the public didn’t like the bailouts and the politicians who voted for them, this “Deficit Commission” plan to cut Social Security is the other shoe dropping. Bailouts helped Wall Street and not Main Street and people certainly didn’t like that. But this is paying for bailing out Wall Street by hitting Main Street in the gut. And the public understands this.
    But here is today’s reality: the public hates this, and the corporate media tells you how much you love it. This is how it’s done. You have heard the stories of FDR and LBJ saying “make me do it,” meaning create the public pressure that forces politicians to do act. This is a story of manufacturing consent where the elites, the Peterson Foundation, the President and the corporate right are setting up an appearance of making them do it. (We have a jobs emergency, but we get deficit commissions instead of jobs commissions?)
    The public hates it but the elites are pushing ahead with their campaign anyway. If you remember the “run up” to the Iraq War, opposing voices were simply shut out of the discussion. All the “serious people” were explaining why we had no choice but to invade Iraq. And all the headlines were about the terrible threat that Iraq posed to our very existence. Seriously, it wasn’t just stories about how Iraq was going to drop a nuke on us any second now. Do you remember the smallpox scare?, where you couldn’t listen to the radio, read a newspaper or watch TV without hearing about all the terrible ways Iraq was going to attack us?
    The Simpson/Bowles plan is part of a pre-arranged agenda to gut the middle class and further enrich the wealthy. The media machine is working to convince DC politicians that the public wants this done. They scare people with headlines about the terrifying things that will happen because of deficits. The only viewpoints you hear are the cutters and gutters. Those presenting the ideas the public favors – like the plan offered by Deficit Commission member Rep. Jan Schakowsky that cuts the deficit but actually strengthens Social Securityare not heard. And keep telling people how popular and necessary this is.
    Result? If you are a politician in DC, you really have no way to know how the pubic feels because all you see are headlines like today’s Washington Post, telling you a consensus is forming.
    This is why YOU have to respond and let YOUR members of Congress and Senators know that you are NOT going to go along with this.
    Take Action
    There are things YOU can do! November 30 is a national call-in day to save Social Security.
    Do this: Click here and sign this petition: Tell President Obama to Reject Social Security Cuts “We must send an urgent message to President Obama – to tell him to reject the proposal to slash Social Security benefits coming from the co-chairs of his deficit commission. If President Obama tries to cut Social Security, it would spell political disaster in 2012.”
    Do this: November 30 National Call Congress Day: Hands Off Social Security,

    The Co-Chairs of the National Fiscal Commission have proposed carving up Social Security like a Thanksgiving turkey. They want to increase the retirement age to 69 – making us work longer, deeply cut benefits for middle-class workers and reduce annual Cost of Living Adjustments. We need your help to stop them!
    Join thousands of Americans in a National Call Congress Day on Tuesday, November 30—CAN WE COUNT ON YOU?
    We need your voice to be heard!
    Click here to make the “Count on Me” pledge to add your voice on Tuesday, November 30 and TELL CONGRESS – DON’T CUT OUR SOCIAL SECURITY!

    Please, please click these links and add your voice.
    Sign up here for the CAF daily summary.

    Did The Rich Cause The Deficit?

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Washington is inundated with deficit commissions. The country has piled up a huge debt because we cut taxes for the wealthy and borrowed to make up the difference. But everyone says we can’t fix the problem by raising taxes on the rich in a recession because taxes “take money out of the economy.” Is there a factual basis for this idea, or is it just one more corporate/conservative-generated piece of “conventional wisdom” bamboozlement?

    A brief budget history since the 80’s: We cut taxes, increased military spending and cut investment in our infrastructure, and the result was huge budget deficits and slower economic growth. Then in the 90’s we raised taxes on the rich and increased investment in the country and we had big budget surpluses and the economy was growing at a good clip. Then in the 00’s we again cut taxes on the rich and raised military spending and cut back on investing in the country, and went back to huge deficits (“incredibly positive news”) and feeble economic growth culminating in the financial crash.

    So now, to address the Reagan/Bush deficits the DC elites — the “serious people” — are proposing … wait for it … not raising taxes on the rich, not cutting military spending and not investing in the country. Instead they want to cut back more on the safety net and on services for the middle class. There really is a brain disease loose in DC.

    The justification for DC’s refusal to fix a problem caused by tax cuts on the rich by restoring taxes on the rich is that you can’t raise taxes on the rich during a recession. The oft-repeated idea that taxes “take money out of the economy” has become so ingrained that there is no discussion at all, it is just accepted as a given. It is “conventional wisdom.” It certainly is a convenient conventional wisdom for the wealthy, but it is a fact?

    Let’s look at some counter-arguments.

    1) Tax cuts for the rich means borrowing. This is the root of the “taxes take money out of the economy” argument because the resulting borrowing pumps into the economy, which is stimulative. If you stop the borrowing the resulting stimulus is withdrawn. Of course, tax cuts are the least-effective stimulus, especially when it is top tax rates we are talking about, but still… Unfortunately we have been borrowing a lot for a long time to pay for tax cuts at the top, so massive debt has accumulated and the interest paid (guess who it is paid to) on the borrowing is significant and anti-stimulative. (Don’t interest payments “take money out of the economy?”)

    Apparently none of the gaggle of deficit commissions have seen this chart:


    2) Taxes bring in revenue to pay for improvements in infrastructure that cause the economy to grow. Investing in modern transit systems, smart grid, energy efficiency, fast internet and other improvements leads to a huge payoff. Infrastructure improvement and maintenance is the “seed corn” of economic growth. We have been eating that seed corn since Reagan’s tax cuts. Some might argue that we can just borrow to invest in infrastructure — but we don’t. One result of the Reagan tax cuts was a cutback in infrastructure investment, which is dissed as “government spending.” (For some reason the same borrowing to spend on tax cuts is not dissed.) After 30 years of Reaganomics our infrastructure has fallen behind and we are not competitive in the world economy.

    Taxes also bring in revenue for improving our schools, colleges and universities. Not only does this help our economic competitiveness, education improves each of our lives and our level of happiness. (And more education helps people who end up on deficit commissions to understand that tax cuts for the rich cause deficits which can be fixed by putting top tax rates back where they were before the deficits that they caused.)

    This was supposed to be the deal: We invest in infrastructure and public structures that create the conditions for enterprise to form and prosper. We prepare the ground for business to thrive. When enterprise prospers we share the bounty, with good wages and benefits for the people who work in the businesses and taxes that provide for the general welfare and for reinvestment in the infrastructure and public structures that keep the system going. The social contract, a beneficial cycle:


    The tax cuts broke that contract and diverted the money intended for society’s use to an already-wealthy few at the top. Since Reagan the system is working like this:


    Since the Reagan Revolution with its tax cuts for the rich, its anti-government policies, and its deregulation of the big corporations our democracy is increasingly defunded (and that was the plan), infrastructure is crumbling, our schools are falling behind, factories and supply chains are being dismantled, those still at work are working longer hours for fewer benefits and falling wages, our pensions are gone, wealth and income are increasing concentrating at the very top, our country is declining.

    3) Taxes on the rich redistribute money back into the economy. This gives more people more money to spend, which helps a consumer-driven economy to grow.

    We have seen our country’s wealth and income concentrate into fewer and fewer hands since the Reagan tax cuts:



    The chart shows the share of the richest 10 percent of the American population in total income – an indicator that closely tracks many other measures of economic inequality – over the past 90 years, as estimated by the economists Thomas Piketty and Emmanuel Saez.

    Timothy Noah wrote about inequality in a recent Slate piece, The United States of Inequality (Note, see Slate’s Visual Guide to Income Inequality)

    Today, the richest 1 percent account for 24 percent of the nation’s income. … from 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent.

    Currently a few people receive most of the income and own most of everything. A very high top tax rate reduces this concentration of wealth.

    4) Historically, high tax rates are associated with increased economic growth. It is others to say whether this correlation is causation, but cutting taxes has certainly not been associated with increasing growth.

    Top Tax Rate vs GDP

    Along with that chart, look at this chart of growth since the 80s tax cuts: (12-quarter rolling average nominal GDP growth.)

    Conclusion: Raising taxes on the rich will not slow the economy. In fact, every indication is that tax cuts on the rich might hurt the economy. So the real question is, why aren’t these “deficit commissions” proposing that we fix a deficit problem that was caused by tax cuts for the rich by raising taxes on the rich back to where they were before the problem? It is clearly time to stop the “riverboat gamble” and restore pre-Reagan top tax rates.

    P.S. Alan Grayson has suggestions for ways the rich can use their $83,347 average tax cut:

    Update – After posting I came across this from David Leonhart in today’s NYTimes, Were the Bush Tax Cuts Good for Growth?

    Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.

    Exactly. Leonhart says the right’s case is a strong one, “When people are allowed to keep more of each dollar they earn, they are likely to work longer and harder.” Actually, you would think people who were taking home a bit less would work longer and harder to make up the difference, wouldn’t you? The Ayn Randian idea that people stop working if they have to pay taxes might apply to the very, very, very (very) rich, but the rest of us have to pay the bills. And so does our democracy. Anyway, you can solve the conflict by looking at what actually happens, which he did, and what happens is that tax cuts and a slow economy go together every time.

    Sign up here for the CAF daily summary.

    Why Were Banks Different From GM?

    I’m sorry but what this “White Board” video does for me is point out what they should have done with the banks, but didn’t. GM investors, management and workers got “shared sacrifice” and now the company is on the road to recovery. Bankers got bailouts and bonuses and the banks are still insolvent and dragging down the economy.
    White House White Board: The Rebirth of the American Auto Industry | The White House,

    In the fourth edition of White House White Board, Austan Goolsbee, Chairman of the Council of Economic Advisers, discusses the President’s tough decisions on the American auto industry in light of the General Motors IPO.