How To Dismantle A Country

Let’s say it’s the 1970s and you’re a foreign power of one sort or another – Soviet Union, China, Arab oil interests, secret cabal of billionaires, whatever – and you want to dominate the world. But the US is in your way…
Let’s say you do a comprehensive analysis of all the things that make the US a world power (for better or worse). Let’s say you develop a plan to infiltrate, undermine, weaken, fracture and ultimately dismantle each the institutions that made America so strong.

Looking back today, can anyone offer anything that could have been more effective at accomplishing this plan than funding America’s conservative movement?

They’re STILL Saying Taxes And Spending Hurt The Economy

Serious People were saying that budget deficits hurt the economy. Then we increased taxes on the rich so now deficits are wayyyyy down. So Serious People are saying that taxes hurt the economy. Or is it spending on schools and infrastructure that is going to kill the economy. Wait, it’s the new health care law — millions of people getting coverage is going to kill the economy. How come Serious People never complain that cutting schools, infrastructure maintenance, Social Security, scientific research (and other things We the People spend money on to make our lives better) really, actually does hurt the economy?

The Record On Taxes And Economic Growth

Last year the Congressional Research Service (CRS) took a look at the actual record of taxes and economic growth and issued a report, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945. The report reported,

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced.

Translation from government to English: The top tax rate used to be over 90% and capital gains taxes used to be much higher. At that time economic growth was much higher. Then they dramatically lowered tax rates for the rich and economic growth went waaaaay down. (However, they can’t say for sure that cutting taxes on the rich caused the huge drop in economic growth.) Also the tax cuts didn’t boost saving, investment or productivity growth. BUT the rate-lowering appears to have caused incomes to concentrate at the top, which has screwed and squeezed the rest of us.

And, by the way, the tax cut did cause massive deficits and we stopped maintaining and modernizing our infrastructure, cut back on education, universtities, scientific research, space exploration, medical research and so many other things that We, the People do to make our lives better.

You might not have heard about this study. Senate Republicans made the CRS withdraw the report.

Here is a chart I made some time ago, for the post, Conservative Tax Tricks – Did Tax Cuts Grow The Economy?

Trend line of growth, with top tax rates:

Top Tax Rate vs GDP

And as long as we’re looking at that post, this was also in there, top tax rates and national debt:

Top Rate vs Debt

Similar Claims, Same Results

Republican claims that taxes hurt the economy go hand-in-hand with similar Republican anti-government claims. The claims usually amount to “government is in the way,” “government hurts the economy,” “government spending is bad,” etc. A Google search of “government is in the way” finds many, many examples, including:

Government the Job Killer – John Stossel. In this one Stossel claims that building infrastructure is bad for the economy. “Building giant government projects is no way to create jobs. When government spends on infrastructure, it takes money away from projects that consumers might think are more important.” He actually claims that building the transcontinental railroad was a bad deal for the country.

A post at Noahpinion has been circulating around the economics blogs, Conservative economic arguments since the crisis: A review. The post looks at a number of Republican economic arguments of late, finding them all to be either mostly or completely … well … rubbish. Examples include “Fannie, Freddie, and possibly the CRA caused the crisis.” and “Welfare is the main force prolonging the recession, by discouraging people from working.”

And of course never forget, “Nothing is more important in the face of a war than cutting taxes.” – Tom DeLay, House Republican leader, 2003.

Why do we listen to these clowns at all? (Because they are backed by the big, big money people who get all the money that come from these Republican schemes.) Why don’t we just create millions of jobs by investing in infrastructure and similar projects? Why don’t we just restore a top tax rate of 90% and a top corporate tax rate of 50%? Why don’t we boost capital gains taxes? Does it have something to do with the influence of money over politics?

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

Will House Republicans Govern Or Destroy The Government They Hate?

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The parents of the Republican Party are away for the summer and the Tea-nagers are ransacking the House. But is it really a surprise that people who hate government itself would act to destroy government itself?

Shut The Government Vs. Global Meltdown

There are more and more indications that Republicans might either shut down the government or “breach” the debt ceiling when they return to DC from the summer recess. Bill Scher’s Republicans Flinch Again, captures the essence of what this means,

A government shutdown would dent the American economy, inconvenience millions and generally make Republicans look like children. But preventing the government from paying its bills would wreck the full faith and credit of the government and spark a global economic meltdown.

Terrifying Scenario Developing

If you read this morning’s Progressive Breakfast (and you always should), you see a terrifying scenario emerging in DC. The Tea Party is working itself up into a full destruction tantrum, and it is hard to see a way around it. Remember that they left town for the summer after refusing to pass the “THUD” bill. This was the Transportation, Housing and Urban Development bill that tried to line up with the Republican-mandated “Ryan Budget” spending cuts that drastically reduces the things government does to help make We the People’s lives better — also called “government spending.” The cuts were too much for some Republicans to swallow, and not enough for others. So they gave up and went home without doing anything at all. (And of course they never took up a jobs bill at all.)

Now they are getting ready to return, and the early indications are that there will be more of the same. There will be no governing in the House, just more of the same: posturing and destroying,

“Flirting With A Fail”

Politico, Eve of Destruction, “Republicans are in jeopardy of convincing voters they simply cannot govern.”

Republicans are all flirting with a fall that could see influential party voices threatening to default on the debt or shut down the government — and therefore ending all hopes of proving they are not insane when it comes to governance.

The NY Times digs a bit deeper into the problems, in Puzzle Awaits the Capital: How to Solve 3 Fiscal Rifts,

On the endgame for the budget showdown looming in Washington this fall, only this is clear: President Obama thinks Republicans cannot risk another debt crisis or government shutdown, and Republican leaders agree.
[. . .] Speaker John A. Boehner of Ohio has reiterated that Republicans will not raise the debt limit without offsetting spending cuts. … But Mr. Obama, burned by the downgrade of the United States debt rating after those 2011 negotiations, insists he will not negotiate on the issue this time.

The Base

Meanwhile the Republican “base” is demanding a shutdown over Obamacare. Erick Erickson at Redstate today,

Stay focused. Show up and confront your Congressman. Tell him if he votes to fund Obamacare, he cannot really say he is fighting against it.

Heritage Foundation has a campaign to shut the government over Obamacare. They are pushing the idea that a shutdown “won’t hurt” the Republicans (with no mention of, or concern over, the millions of Americans who will be hurt).

So here it comes people. In a short time we find out whether the Republicans are going to close the government they hate or destroy the “full faith and credit” of the United States, which would destroy the government they have along with the economy of the world.
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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

While Tax-Evading Corporations Paid Only 12.6%, We Cut Schools, Firefighting, Etc.

Republicans insist on cutting and gutting the things government does to make our lives better because, they say, “we’re broke.” Meanwhile a new study by Congress’ Government Accountability Office (GAO) shows that in 2010 the big U.S. companies paid only 12.6% in taxes on their reported worldwide profits. Corporate taxes have gone from 5-6% of GDP down to only a third of that. The corporate share of all taxes paid has gone from 28% to a third of that, too. And these lower taxes have hurt, not helped our economy and country.

Republicans Say “We’re Broke”

Republicans say we have to cut spending on schools, infrastructure, research, cancer clinics, everything government does to make our lives better because “we’re broke.”

[youtube]http://youtu.be/7xdsHP3Qb9U[/youtube]

We aren’t “broke.” We are the richest country in history, but those riches are now being channeled to a very few people instead of shared among We, the People. This video will help you understand where the money went.

[youtube]http://youtu.be/IkCWwpCCisI[/youtube]

We are currently in year one of the “sequester.” Even cancer clinics are forced to close. This follows trillions of dollars of other budget cuts. Our infrastructure if falling apart, bridges are falling down, our ancient power grid can’t keep up with demand, our rail system system is like something in the third world compared to other countries, and at the same time we are experiencing extreme income and wealth inequality as more and more of everything goes only to a top few.

But hey, corporate taxes are low.

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Republicans Moving From Obstruction To Outright Sabotage

During the first years of the Obama administration the Republican strategy was to obstruct efforts to improve the economy and crate more jobs. Then, at election time they went to the public saying, “Obama hasn’t made things better.” But now they are moving into outright sabotage of  things that government does for people, like the new health care law, with election plans to campaign on the failure of government to do things for people.

Public Not Aware Of Health Care Law

Most of the new health care law goes into effect next year, with the “exchanges” beginning at the end of this year. But the public has little, if any, understanding of what is coming and what it means to them.

An April Kaiser Family Foundation Health Tracking poll found that only 40% of the public even knows that the health care law has been upheld by the courts and not repealed by Congress. “Also about half the public says they do not have enough information about the health reform law to understand how it will impact their own family, a share that rises among the uninsured and low-income households.”

And less than 10% report hearing anything good about the new law.

Republicans Threaten Sports Leagues

The government is beginning (really, really late in the game) to try to get information to the public. Among other efforts, the Dept. of Health and Human Services had been talking to sports leagues about ways they can help educate the public. Republicans immediately moved to nip that in the bud.

TPM: GOP Leaders Warn Pro Sports Leagues Not To Promote Obamacare

Senate Republican leaders have sent letters warning six professional sports leagues not to provide the Obama administration any assistance in promoting Obamacare.

The letters, dated June 27, warn the chiefs of the National Football League, Major League Baseball, National Basketball Association, National Hockey League, Professional Golf Association and NASCAR that partnering with the administration to publicize the benefits of the health care law would damage their reputations.

It worked: CNN, NFL has ‘no plans’ to promote Obamacare.

The reason Republicans went after the sports leagues is because in a past public-information effort sports turned out to be a good way to get information out to the public. In 2007 the Boston Red Sox assisted then-Gov Romney in promoting the new Massachusetts health care law. This helped spread public knowledge and understanding of the new law.

But public knowledge and understanding is to Republicans like garlic is to vampires. Increased public knowledge and understanding get in the way of their agenda.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

“Democracy Has Been Stolen And We Have To Take It Back”

“Democracy has been stolen and we have to take it back.” – Senator Merkley (D-OR) at Netroots Nation.

We have to end the filibuster, at the very least for nominations, if not for everything. This has to happen because Republicans are now obstructing everything, and agencies of our government are going to start shutting down over this summer. Without action the National Labor Relations Board (NLRB) closes its doors at the end of August and not long after that the Consumer Financial Protection Bureau (CFPB) will be without a director. These are just some of the nominations being obstructed — filibustered — in order to block these agencies from operating.

It is not right that anyone is able to just keep our government from operating, for any reason. It is time to end the flibuster. Visit Fix the Senate Now.

Also please visit Communications Workers of America (CWA)’s Give Us Five! news page and GIVE US FIVE! campaign.

Reclaiming Our Democracy

The Netroots Nation session, “The Three Keys to Reclaiming Our Democracy” took a look at the filibuster and other structural impediments to democracy. On the panel were CWA President Larry Cohen, NAACP President Ben Jealous, Greenpeace Executive Director Phil Radford, Citizen Action NY Executive Director Karen Scharff and Senator Jeff Merkley. The panel was hosted by Salon’s Joan Walsh

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Why Are Republicans Trying To Cut Us Back Into Recession?

The deficit problem is largely solved. Yet Republicans are still trying to cut us back into recession. Before the election they had an excuse: if they kept the economy down people might vote against Obama. But now? What is their game? Jobs fix deficits, and to fix jobs, fix trade and invest.

Proof In Pudding

We now have (even more) clear evidence of what we already knew for sure: cutting government cuts the economy. Along with every other country that has tried cutting their way to growth (now and in all of history, ever, anywhere), our economy was forced into decline last quarter and that decline was entirely caused by cuts in government.

Bob Borosage yesterday, quoted in the Huffington Post’s Jobs Deficit: Austerity Politics Threaten Obama’s Economy,

As Europe has shown and the IMF has warned, inflicting austerity on a weak economy is ruinous and is likely to drive us back into a recession. Those dismissing the downturn as due to an odd drop in government spending should consider that more of these are on the docket.

And Borosage again in Warning: Austerity Hysteria Endangers Your Job,

The U.S. economy shrank unexpectedly in the last three months of 2012, ending over 30 months of economic growth. Exports lagged, reflecting, in part, declining markets in Europe, now suffering a costly recession inflicted by misguided austerity policies. But the greatest cause of the decline was unexpectedly large cuts in government spending, particularly in the military.

Yes, Virginia, cutting government spending in a weak economy costs jobs.

A three-month downturn is a caution, not a catastrophe. But Washington seems too wrapped in its deficit delusions to pay attention to the flashing yellow lights.

Krugman today, in Looking for Mister Goodpain, points out that everywhere else this has been tried the result is higher unemployment and slower growth. After describing the search of an austerity success story Krugman concludes that we should start fixing unemployment,

So what do we learn from the rather pathetic search for austerity success stories? We learn that the doctrine that has dominated elite economic discourse for the past three years is wrong on all fronts. Not only have we been ruled by fear of nonexistent threats, we’ve been promised rewards that haven’t arrived and never will. It’s time to put the deficit obsession aside and get back to dealing with the real problem — namely, unacceptably high unemployment.

Jobs Fix Deficits

The cutters have had their chance. We all understand that the deficit scare is not about deficits at all, it is really about cutting what they want to cut: the things We, the People do to make our lives better, because they want that money for the 1% who pay for their campaigns.

If you really want to worry about deficits the way to fix deficits is jobs. Invest in our economy and the things that make our lives better, and the growth will come. Because democracy is the best economic policy.

Invest in a modern, 21st-century infrastructure and the economy will grow, and deficits as a percent of that economy will become very small — just like what happened when we did that before. (Unless you think the interstate highway system and airports, etc. didn’t help the economy.)

Look to history, people, not to corporate/billionaire propaganda. Look at what has worked, and do that. Investing grows economies, cutting kills economies.

A Deficit To Worry About: Our Trade Deficit

We do have a deficit to worry about, and that is the trade deficit. More than $1 billion dollars a day is drained out of our economy by the trade deficit.

The same crowd (billionaires and their giant, anti-competitive corporations) that promotes the budget deficit scare is benefitting from the trade deficit.

Since Reagan (coincidence?) we have been buying more than we sell and moving jobs and factories out of the country. This pits American workers against low-paid, exploited workers in countries that do not protect people or the environment. And it gets worse every year.

The result of Republican policies has been millions of people begging for work at any wage, and the middle class forced into ever-increasing debt. Meanwhile all the income and wealth accumulates at the very top. … It almost looks like that is the real Republican plan.

See also:

Me, October: Trade Deficit – One Root Of Many Problems.

Borosage, today: Why a Trade Strategy Should Be a State of the Union Priority

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Sign up here for the CAF daily summary

Don’t Feed The Debt Ceiling Trolls

Bloggers have learned some hard lessons about engaging with right-wing nutcases who leave nasty comments: “Don’t feed the trolls.” Starve them of the attention they seek. Ignore them and move on. This advice also applies to the right-wing nutcases threatening to bring down our economy by refusing to raise the debt-ceiling limit. They won’t get any traction on this unless Democrats engage with them. So ignore them, isolate them and scorn them but do not engage with them. Their billionaire & Wall Street funders will stop them and the pubic will see them for what they are, but only if we all just leave them alone. They aren’t really going to hold their breath until we all die.

And if they actually did take down the economy (they won’t), the country will be better off in the long run because it means the end of the radical right as a force in our politics.

So let them hold their breath until the country turns blue.

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Sympathy For The Palin

Since watching HBO’s Game Changer I have sympathy for Sarah Palin. She was in way over her head – not really her fault.
The “old” GOP didn’t understand that today’s GOP could elect someone who really “doesn’t know anything.” So they assumed a Governor would at least read newspapers and not just right-wing blogs, watch FOX and listen to Rush Limbaugh. The new GOP just reads right-wing blogs, watches FOX and listens to Limbaugh.
A Palin, and now the problem of a government that is destroying the country, its infrastructure, its courts, all the things that businesses rely on, this is the GOP/corporate establishment’s fault. This is corporate money and careerist politician/lobbyists, just using “the base” and nurturing this culture, because they use the ignorance.
It’s also the corporate short-term thinking thing. Yeah, it was great to get tax cuts and neglect the infrastructure. Great to get people believing there’s no climate change. Great to pile up cash for yourself but let the country pile up debt.
And now it’s “later.” If you aren’t one of the very few who piled up enough cash to fly your jet off to your private island, you’re fucked along with the rest of us, in a country rules by Sarah Palins.