Why We Have A Deficit

Deficit theater is coming to DC tomorrow, with a well-funded “fiscal summit.” The plot summary is that we have Deficit Trouble – Right Here In River City! so to fix it we need to cut Social Security and Medicare and the things democracy does for We, the People — while cutting taxes on the rich and their corporations to make us more “business-friendly.” (This musical is sometimes billed as “Simpson-Bowles” but it’s the same old song.)
All of this deficit hysteria today – when just over ten years ago we had such a large a budget surplus that we were projected to pay off our entire debt in … ten years! That’s right, Ten Years Ago We Were Paying Off The Nation’s Debt. But Then We Elected Obama.,

Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait…
Between the time ten years ago when we had big surpluses and were paying off the debt and now when we are told the “Obama spending and deficit” mean we have to cut back on the things We, the People do for each other, something happened. Something changed. The things that happened, the things that changed, are being ignored in the current DC discussion about what we need to do to fix things.

Something happened. We had a surplus, and it was replaced by massive deficits. The last Bush budget year had a deficit of $1.4 trillion!

Why We Have A Deficit

What happened under Bush? We cut taxes on the rich and doubled military spending. (And started wars.) And don’t forget collapsing the economy, forcing people onto unemployment and food stamps. That is why we have a deficit. We have a deficit because of tax cuts for the rich, huge military budget increases and the consequences of deregulating corporations.
Here are some questions for tomorrow’s deficit theater:

  • How large was the country’s yearly budget deficit and total debt in the “Eisenhower/Truman” decades when the top tax rate was 90%?
  • Today we have an “infrastructure deficit” – the amount needed to repair our country’s roads, bridges, sewers, etc. – of somewhere upwards of $1.6 trillion. Was our infrastructure kept in good repair before the top tax rates were cut?
  • Concentration of wealth is long recognized as a threat to democracy, and now we are seeing a low-wage, everything-to-the-top economy with the greatest ever concentration of wealth going to a few at the top. Was the problem of wealth concentration increasing or decreasing before the top tax rates were cut?
  • When top rates were high people couldn’t take home vast fortunes in a single year. When it took several years to make a fortune did corporations depend on long-term or short-term thinking? Did the executives of corporations care if the infrastructure and communities their companies depended on were in good shape? Did large corporations fleece customers and exploit employees for quarterly returns as they do now?

How We Fix The Deficit

How do we fix this? Doesn’t it make sense to look at what caused the deficits and fix that? There actually are budget plans that get rid of the deficit without cutting back on the things democracy does for We, the People. Here is a post about one of those budget plans: The People’s Budget Balances The Budget — Why Isn’t It Part Of These “Deficit” Talks? Here is a post about another budget plan that fixes the deficit without cutting the thing democracy does for us Every Progressive Should Know About The “Budget For All”
So we know why we have a deficit, and we have realistic budget plans that undo the damage, maintain the things that democracy does for We, the People and invest in growing our economy. So why aren’t these plans part of the big DC deficit discussion? Maybe progressive plans that cut the deficit are not part of the DC deficit discussion because cutting the deficit isn’t really the point. This Deficit Story Can’t Be Repeated Often Enough!,

So we went from big surplus to huge, huge deficits. Bush said it was “incredibly positive news” when we went back into deficit spending. He said it was good news because it continued the plan to use debt to force the government to cut back. He said that. It was the plan. (Don’t take my word for it, click the links.)
The Reagan people said it too, back when they started the massive deficit spending. It was the plan: force the country into massive debt, “starve the beast,” and use that to force the government out of business, or at least to be “small enough to drown in a bathtub.” They forced the tax cuts and Reagan said this was “cutting the government’s allowance.” The point was to use revenue cutbacks to force government to shrink, to get out of the way of the 1%.

A Golden Oldie

From Dear Deficit Commission, It’s Not Hard: (Click through to see bigger charts)

Dear Deficit Commission,
It’s not hard to figure out why we have a huge deficit. It’s so easy I don’t have to use words. Here are some pictures:
Clinton_Bush_Deficit
Bill Clinton raised taxes on the rich. Bush cut them.
Now, about that huge national debt…
TopRates_vs_Debt_Chart
The second chart kind of explains itself. The third chart can help you find a place to get some money:
Defense-Budget
(Note: There is no more Soviet Union.)
In case that isn’t clear enough, try this:
Defense Spending and Debt chart
Let me know if you still have any questions.

We had a budget surplus. We were paying off the debt. Then something changed. If you want to fix the deficits, change it back.
Don’t fall for it. Deficits were the plan. Run up the borrowing, then come back with a scare campaign that stampedes people into accepting cuts in the things democracy does for We, the People. It was the plan.
If You Happen To Be In DC Tomorrow: May 15: Stand Against Austerity:
May 15, 2012 at 1 p.m. (Program starts 1:30 p.m.)
In Front Of the Peter G. Peterson Foundation Fiscal Summit
1301 Constitution Avenue NW, Washington, D.C.
Here’s one of those charts again, larger:

TopRates_vs_Debt_Chart

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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10 Years Since Bush Tax Cuts: Why The Onion Was Right

It is 10 years since the Bush tax cuts passed. When Bush took office (and never forget the Supreme Court’s 5-4 role in that) The Onion famously declared, “Our long national nightmare of peace and prosperity is finally over.” They had no way to know how prescient they were. Now we are living the real nightmare.
10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
The Onion satire had Bush declaring,

“My fellow Americans,” Bush said, “at long last, we have reached the end of the dark period in American history that will come to be known as the Clinton Era, eight long years characterized by unprecedented economic expansion, a sharp decrease in crime, and sustained peace overseas. The time has come to put all of that behind us.”
Bush swore to do “everything in [his] power” to undo the damage wrought by Clinton’s two terms in office, including selling off the national parks to developers, going into massive debt to develop expensive and impractical weapons technologies, and passing sweeping budget cuts that drive the mentally ill out of hospitals and onto the street.

Everything the Onion declared in jest became true right down to the Bush administration proposing to sell national parks. Pushed through using “reconciliation,” the Bush tax cuts — along with the Bush wars and military increases — have nearly bankrupted the country. As Roger Hickey writes in, 10 Years Of Bush Tax Cuts Is Enough,

Cutting taxes on the wealthy did not create jobs as conservatives promised. … the Bush Administration [had] the “worst track record on record” for jobs, according to the Wall Street Journal. Bush declared that “the surplus is the people’s money,” and proceeded to give the surplus away to very few people. Now that we face chronic deficits, it’s long past time for millionaires and billionaires to starting giving back.

10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
Deficits: “Incredibly Positive News”
Ten years ago we had a huge budget surplus. Then came the Bush tax cuts, immediately pushing us into terrible budget deficits. What did Bush say about that? Bush said that turning from surplus to deficit was “Incredibly Positive News,”

President Bush said today that there was a benefit to the government’s fast-dwindling surplus, declaring that it will create “a fiscal straitjacket for Congress.” He said that was “incredibly positive news” because it would halt the growth of the federal government.

“Incredibly positive news” — never for a minute think that these deficits and the resulting debt were anything but intentional, a scheme to gut government and force us toward the current rigged and one-sided discussion of cutting Medicare, etc.
Bring Back Peace And Prosperity
It would be so simple to bring back peace and prosperity. First and foremost: undo the Bush tax cuts.

5-12-11bud2

But the Supreme Court helped lock in the Bush nightmare, with the “Citizens United” ruling, allowing unlimited corporate money to interfere in our elections. In the 2010 Congressional midterms more than $300 million was pumped into those nasty smear-ads by corporations, half of it from secret donors, according to Common Cause. How much of that came from, say, China? We don’t get to know.
P.S. A Simple Plan To Fix The Jobs Emergency — And The Economy, Too
Take Action
10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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“Government Doesn’t Have The Resources To Stop It”

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
People want the President to exert leadership to turn things around.
The oil leak. Unemployment. Credit card scams. Foreclosures. Predatory corporations. Environmental destruction. Global warming. Roads and bridges crumbling. Incomes stagnant. Schools getting worse. Companies moving overseas. Problem after problem.
People want to know, “Why doesn’t the government push BP aside and take over?” The answer is, “Government doesn’t have the resources to stop it.”
People want to know why the government can’t do more to help unemployed people, help with health care, help provide good educations, help with college, maintain the infrastructure, and all the other things that government does.
The answer, these days, is always, “Government doesn’t have the resources.” And that, in a nutshell, was exactly the plan.
We, the People no longer have the resources to solve our problems. We now must depend on and defer to the corporations and the wealthy few to make the important decisions and get things done instead of being able to decide and do on our own.
This is the legacy of 30 years of conservatism. They called it “starving the beast.” Reagan called it “cutting their allowance.” President Bush, told that his policies had turned the country back to massive deficits, said this was, “Incredibly positive news” because it will create “a fiscal straitjacket for Congress.” He came into office with a $236 billion surplus. His last budget left us with a $1.4 trillion deficit. “Incredibly positive news.”
They disemboweled the regulatory agencies. They “privatized” government functions and resources, letting a well-connected few profit at the expense of the rest of us.
The Reagan deficit plan was right there for everyone to see:

    Step 1: Cut taxes to “cut the allowance” of government so that it can’t function on the side of We, the People. Intentionally force the government into greater and greater debt.
    Step 2: Use the debt as a reason to cut the things government does for We, the People. When the resulting deficits pile up scare people that the government is “going bankrupt” so they’ll let you sell off the people’s assets and “privatize” the functions of government. Of course, insist that putting taxes back where they were will “harm the economy.”
    Step 3: Blame liberals for the disastrous effects of spending cutbacks.

And here we are. Every time you hear someone say that we have to fight the deficit instead of getting things done that We, the People need done you are witnessing The Plan in action.
And now, government doesn’t have the resources to stop it.
NOTE: Part of the America’s Future Now conference in Washington D.C. from June 7-9 will be devoted to strategy on how the progressive movement can fight the deficit cutters. Speakers such as Van Jones, House Speaker Nancy Pelosi, Howard Dean, AFL CIO President Richard Trumka, Arianna Huffington will offer a build vision for how the progressive movement can rebuild America’s economy and put people back to work. Click here to attend.

Conservatives Caused Huge Deficits, Blame Obama

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Headline at Drudge Report: Obama policies projected to add $9.7 trillion to debt by 2020… points to this story, National debt to be higher than White House forecast, CBO says,

President Obama’s proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall.

So here is the deal. This Drudge headline, saying Obama’s spending “adds to the deficit” is a trick. Here is how it works. Suppose you take over a company that is losing $100 million a year, and your jobs is to turn it around. So perhaps the second year the company only loses $70 million, $30 million the third year, and breaks even in year four. You saved the company. But in those years the company “lost” another $100 million. Should you be fired?
President Obama took office as President of a country with a $1.4 trillion deficit – thanks to the failure of conservative policies. Their tax cuts, wars, military buildups, corruption and incompetence drove the borrowing WAY up, and then their deregulation, corruption and incompetence destroyed the economy, driving the borrowing up into the stratosphere.
If the borrowing just stayed the same at the $1.4 trillion level Obama inherited each year — never mind that interest on all that borrowing gets higher and higher each year — that would mean $14 trillion would be added to the deficit by 2020. That’s a LOT more than the $9.7 trillion that Drudge and the conservatives are making so much noise about. Obama is dramatically reducing the borrowing, but they use trickery to make it look like he is causing it.
What about that $1.4 trillion deficit? That was the deficit for the 2009 budget year. Conservatives say — over and over — that Obama “tripled the deficit” in 2009. This isn’t even a trick, it is just a lie. The final Bush budget year ended with a deficit of $1.4 trillion. Conservatives have been telling the public this was an “Obama Deficit” and use graphics and charts that label this last Bush budget as Obama’s. Look at that chart, and then look at this. The first chart is nothing more than a lie, of course repeated endlessly.
But what else should you expect? Like the scorpion that stings the frog as the frog ferries it across the river, it’s what they do. They screw things up, and then point the finger of blame at everyone else.

Did Bush Leave Us Bankrupt, Corrupt, Ungovernable?

From Open Left
When you sell the farm, the farm’s gone.

Is it already too late for America? I’m starting to think that the anti-tax, anti-government conservative movement that started in the mid-70s, elected Reagan and led to the terrible Bush Presidency may have effectively destroyed the country, leaving it bankrupt, corrupt,ungovernable, ruled by a wealthy elite — and we’re only now just starting to realize it. To cover tax cuts we stopped maintaining the infrastructure and started borrowing. To satisfy their hatred of government we increasingly stripped away rule of law, regulation, and belief in one-person-one-vote. We are seeing the consequences of all of that coming back to roost now.

Reagan left us with massive debt and ever-increasing interest payments. Bush left us with $1.3 trillion deficits and a destroyed economy that would force further increases in the borrowing for years – to be blamed on Obama. The “free marketers” gave away our manufacturing base that will take decades and massive capital investment to recover. Obama can try, but it may just be too late to do anything about the borrowing. We need massive investment in jobs and infrastructure, and a national economic/industrial plan. But, with their own Reagan/Bush debt as ammunition, conservative ideologues continue to block every effort at investment to get out of the mess we are in.

The conservatives destroyed the regulatory structure of the government. They removed the inspectors, administrators, regulators and replaced them with corrupt cronies.

The conservatives killed off, contracted out or sold off – “privatized” – so much of our in-common resources and heritage of public structures. Water systems, oil and mineral leases, government functions, elements of the military, etc.

The conservatives destroyed the rule of law, leaving behind public perception of rule by cronyism, favoritism and mob.

The conservatives destroyed public understanding of democracy, leaving behind a one-dollar-one-vote system that their Supreme Court just formalized, along with a corporate media that works to keep people uninformed. And to make matters worse, now the telecoms can argue before Federalist Society judges that their “speech rights” are violated by rules making them carry labor and progressive websites over the internet lines they control. And forget about the idea of them ever letting anti-corporate-rule candidates raise money on “their” internet.

I hate to reference Friedman but this from last week has been sticking in my mind. He says the world is looking at the mess in the US and is turning away from democracy as a result.

[Foreigners] look at America and see a president elected by a solid majority, coming into office riding a wave of optimism, controlling both the House and the Senate. Yet, a year later, he can’t win passage of his top legislative priority: health care.

“Our two-party political system is broken just when everything needs major repair, not minor repair,” said … who is attending the forum. “I am talking about health care, infrastructure, education, energy. We are the ones who need a Marshall Plan now.”

Indeed, speaking of phrases I’ve never heard here before, another goes like this: “Is the ‘Beijing Consensus’ replacing the ‘Washington Consensus?’ ” Washington Consensus is a term coined after the cold war for the free-market, pro-trade and globalization policies promoted by America. … developing countries everywhere are looking “for a recipe for faster growth and greater stability than that offered by the now tattered ‘Washington Consensus’ of open markets, floating currencies and free elections.” And as they do, “there is growing talk about a ‘Beijing Consensus.’”

The Beijing Consensus, … is a “Confucian-Communist-Capitalist” hybrid under the umbrella of a one-party state, with a lot of government guidance, strictly controlled capital markets and an authoritarian decision-making process that is capable of making tough choices and long-term investments, without having to heed daily public polls.

It is too late to recover?

Accountability is a first step. If the current administration would hold the corrupt actors accountable, maybe we could begin to restore governance. And the public would know who to blame for what has happened to us, enabling them to support policies that will get us out of this. But so far they won’t. If they won’t even investigate torture and illegally invading a country why should we expect any accountability for the financial collapse, corrupt government contracts, bribery, embezzlement, corruption and other crimes of the Bush era?

More equitable distribution of the fruits of our economy is another step. Our system worked so much better back when the top tax rate was 90%. The returns from our investment in infrastructure were more widely shared. And back when it took many years to build a fortune businesses had an interdependence with their communities. Executives needed the schools and roads and other public structures functioning well. They needed long-range business and community planning. But just imagine trying to do something about the concentration of wealth today.

So where do we go from here. Is democracy over? Is rule of law a thing of the past? Is predatory monopoly control by the largest corporations the way things are and will be? Does the world now move to governance by a wealthy elite?
Or is the winter and the rain and the snow just getting to me?

What are your thoughts?

On Bush and Moon

A very interesting piece here: News From Underground: Neil Bush is a Moonie. It begins,

The dark epic of Sun Myung Moon is almost totally unknown to most of us– amazingly, considering how much power Moon wields throughout the world, and, especially, in these United States, where he has the Çhristianists in one pocket, the Bush family in another, and the UN firmly in his sights. The Bush Republicans would be nowhere without him; but, of course, the only billionairewhose vast political influence we ever hear of is George Soros, whose funds for liberal causes represent a tiny fraction of the endless cash cascading from Moon’s global enterprises, which include weapons factories, the world’s largest sushi supplier, certain joint ventures with the Yakuza and other sources of enormous wealth.

Well worth a read.

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Good Lord, Democrats, Don’t You See What’s Coming?

The other day in What I Expect In 2008 I wrote that, with Iraq out of the news, one of the things the Republicans are going to do in 2008 is make the public think that Democrats are big spenders, and are even worse than Republicans on wasting money through earmarks and pork. (click through to read why Iraq will be out of the news)

This cost the Republicans in the last election and they learned from that. What did they learn? That the public votes against politicians who are accused of spending and pork. What are they doing about it? Accusing the Dems of spending and pork, of course!

The public lives in a controlled “information environment.” Conservatives begin working well in advance of elections to exert pressure on that environment and prime the public to be receptive later to their issues and candidates. Democrats and progressives, for some reason, do not.
So what is happening in that information environment? Here is just a smattering of what the public was presented with just in the last few days. Never mind the facts, this is what the pubic is hearing. And this is a year before the election. The drumbeat is only going to grow, and grow, and grow, until there is no other story. Good LORD, Democrats, why don’t you see what is coming? Why aren’t Democrats and progressives out there NOW with a counter-narrative, explaining to the public why conservatives and their ideology are bad for America?
Editorial: Jam-packing the pork, Congress defies Bush on goody-bag of a bill,

… a spending bill so stuffed with pork as to make a Polish sausage look like a Slim Jim …

Oink, oink,

…U.S. senators, primarily Democrats, once again reveal their ravenous appetite for unadulterated pork.
The Club for Growth’s latest “rePORK Card” reveals Senate Democrats on average this year scored a dismal 12 percent out of a possible 100 percent in voting down 15 pork-busting amendments.

Continue reading

The First Problem in Iraq is BUSH

People say we should not impeach Bush because it will divert us from getting out of Iraq. I think that approach has things backwards. I think we can’t deal with the problems of Iraq until we deal with getting Bush out. With Bush in charge we can’t have a rational debate about the best options for Iraq.
1) I believe that it’s wrong to just pull our forces out of Iraq. We invaded, we destabilized and we destroyed the existing institutions of order. We created the mess there. We created the civil war. We created the threat of regional conflict. So I think it is America’s legal and moral responsibility to provide security for the people of Iraq. And that’s also what international law says. Of course, providing security for the people of Iraq is not going to happen with Bush in office.
(Someone told me this idea is like being raped and then getting a ride to the hospital from the rapist. I can understand the sentiment, but the U.S. is not a person and Iraq is not a person. We and they are a bunch of people all with their own differing needs and interests. Countries have to deal with where things are on a given day, before they deal with where things were on a previous day. In other words, Bush did what he did — but where do we go from here that is best for us and best for them NOW?)
2) It is wrong to blame the Iraqis for what we have done and it would be wrong to abandon them to the mess we made. But the way our forces are being used by Bush just makes things worse. This must change but it will not change with Bush in charge of policy decisions.
3) Suppose we do vote to withdraw with Bush in office? How do you think a Bush administration will execute that withdrawal? Will they do it in a way that makes things better — or much worse? And will they just refuse, necessitating the impeachment I say has to happen first? In other words, we can’t deal with Iraq until we deal with Bush.
4) There is also a national security component. The current situation in Iraq really is making us less safe here. Leaving might only make that worse. This needs to be debated rationally – impossible with Bush in office spouting his focus-group-tested bullshit, designed to put up a smokescreen and distract us from reality.
5) Bush’s propaganda is causing us to doubt terror warnings that may be real. What if our intelligence agencies discovered that al Queda really is getting ready to use a nuke on an American city, for example? We simply can not trust our government right now to tell us the truth. The threat of a terrorist attack is too serious to allow this incompetent, lying gang of criminals to remain in office even one day longer than it takes to get them out.
6) Similarly, Bush’s lies about Iraq have forced us to doubt the claims about threats presented by Iran. But Iran is not Iraq, and their theocratic rulers are not our friends. We need to be able to trust what is being said to us and we can’t with ush in office.
So I think that the right path lies in a different direction from working to get the troops out. Options beyond the simplistic choice of doing what we are doing now or just leaving need to be discussed. But we are not going to be able to do what is right until we change the national leadership here. We are not even going to be able to properly debate the issues.
Finding the answers to the problems of Iraq begins with solving the problem of Bush.

Iran Violates Geneva Conventions

Broadcasting pictures of the captured British sailors and marines is a violation of the Geneva Conventions. Unlike the United States, England has not withdrawn from that treaty.
We face here another example of the consequences of Bush’s violation of the compact between a democracy and its leaders. When the leader of your country says he has information that we face imminent attack, you must believe him. Bush did this to lead us into an attack on Iraq, and was lying. So now Bush tells us that Iran is a threat to peace – and it probably is, as this recent action demonstrates. But we can not believe Bush and we can not trust that there is no hidden agenda involved.
As I have said before, if Bush and the Right’s claims about Iran come out of true concern for the country, then Bush must step aside. We must have leadership that the people can trust to tell us this is so.