A Bipartisan Move Against Democracy

Step back from the day-to-day, hour-to-hour details of the debt-ceiling negotiations for a minute and look at the bigger picture. Look what we’re in the middle of. Our legislators are being stampeded by a manufactured “crisis” into profoundly changing the nature of our country and who our economy is “for,” on extremely short notice, against the clear wishes of the majority of the public. They are doing so without following the long-established process for due consideration of important issues; they are not holding hearings, not giving time for public input, not going through committees… The act of negotiating with these hostage-takers at all is itself a violation of our established, democratic system. The question to ask is not, “What painful cuts should we agree to to save our country,” but rather, “Why are we engaged in this anti-democracy exercise at all?”
A Functioning Democracy?
In a functioning democracy an informed public considers and debates its options and then comes to a decision on how best to proceed. In a representative republic our representatives are called “representatives” because they represent us, and vote to implement our wishes.
The founding idea of our country is that We, the People are in charge, and our country exists to promote the common good — “welfare” — of all of us. Elected officials take an oath of office to protect and defend our Constitution, which begins with those words, “We, the People.” Over time we have built up a system of institutions, processes, procedures, traditions and mechanisms to implement this founding idea. The oath they take is to protect and defend this system.
Oath Of Office: Protect and Defend Our System
Today all of this seems all to have fallen away from us. A fanatical but extremely well-funded minority is using a manufactured “crisis” to hold the country’s economy hostage. As ransom — if we don’t want the country to go into default, destroying our economy — they demand that we force fast and dramatic changes to the nature of our country and our social safety net. These changes will take effect before the public can react and gather the forces of opposition. They will be “locked in,” creating “facts on the ground” that we have to deal with, and which are extremenly difficult to undo, no matter what We, the People want or need.
Rather than honor their oath of office to protect and defend our We-the-People system from all enemies, foreign and domestic, and to listen to “We, the People,” and to promote the common good of all of us, our leaders have instead entered into negotiations with the hostage-takers. The act of entering into these negotiations is by itself an agreement to work outside of our established system, and the result of these negotiations will be to change the equation of who our system is for.
Crisis?
Is there really a “debt crisis” necessitating such a dramatic and immediate response? Just 10 years ago the “crisis” we faced was that we were paying off the debt too fast and it was claimed this would lead to socialism as government surpluses were invested in private assets. So taxes for the wealthy were cut. At the same time, enabled by another “crisis,” the military budget was dramatically increased — in ways that enriched “private contractors.”
The result of these changes was an immediate return from budget surpluses to the dramatic budget deficits initiated by President Reagan. Then-President Bush called these deficits “Incredibly positive news” precisely because they would bring on a debt crisis that would enable today’s stampede to change our system of government. The debt “crisis” was intentional.
Cause Of Deficits and Debt
The increase of deficits beyond $1 trillion occurred in President Bush’s last budget year — the consequence of the financial collapse and the resulting drop in tax revenue combined with increases in social safety-net program payments. But the underlying cause of the deficits was the Bush tax cuts and wars. Today, in How the Deficit Got This Big, the NY Times offers charts and figures that show that:

…under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.

As for the causes of the longer-term debt picture The Center on Budget and Policy Priorities has put together this chart, explaining:


Longer term most of our country’s future debt problem is from tax cuts, increases in military spending, and the effects of the economic downturn. Most of the rest is because of our private healthcare delivery system. These “debt-ceiling” negotiations are not addressing these causes of the problem at all. Instead they are about using whipped-up panic over those intentionally-created problems to move the common wealth into private hands.
Not The First Time
This tactic of whipping up panic over a “debt crisis” has been used before to stampede legislative bodies into making radical changes on short notice, moving common wealth into private hands. In the post Debt Crisis? Really? I hilighted a 1993 example from Canada that was very similar to today’s. From the source’s account,

By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets.

There is example after of example of the use of manufactured “crises” to panic and stampede legislatures into privatizing public wealth, just as we are experiencing today.
Democracy Eroded
What is happening here is not supposed to be the process of decision-making used in a representative democracy. Instead what we are experiencing is designed specifically to engineer circumstances that persuade us to bypass established processes and safeguards. These safeguards are in place to protect us from making the very sort of panic-driven decisions that we are about to make. And they are designed to “lock in” the changes, so we can’t reverse the damage when we are able to catch our breath.
How can our leaders not recognize and resist what is being done here? Have our own leaders drifted so far from America’s traditional love of democracy that they accept this and fall into playing the game?
Elitist Mindset
It seems that our own leaders have fallen into an elitist mindset, which enables them to go along. Persuaded by decades of corporate-funded propaganda, many now believe that the public doesn’t know what is good for them, that the things democracy entitles them to — “entitlements” — will bankrupt the country, that taxing the wealthy and corporations — the “job creators” — will harm the economy. They do not seem to see how much of our wealth is now flowing to a very few at the top of the pyramid. The fact that taxes on the wealthiest have been cut from a top rate of 90% all the way to a rate of only 15% for hedge-fund managers making billions — far lower than many of the rest of us pay — is ignored. And the fact that we did not have budget deficits when the wealthy paid higher taxes is also ignored. In fact, today just 400 people now have more wealth than half of our population, and the trend is accelerating. But many of our leaders believe that the things We, the People do for each other are a problem, and we must be protected from ourselves.
One example of the slow drift away from love of democracy is the recent “Deficit Commission.” This was a commission of elites — there were no teachers or unemployed or plumbers or disabled or poor people in that room — that was assigned to come up with ways to lower our budget deficits. They did not come up with any recommendations, but the leaders of the commissions came up with a plan of their own — to cut taxes on the wealthy while cutting the things that We, the People do for each other.
Again and again our elites try to create bodies like this that act as an external force they have to submit to, allowing them to escape accountability to voters.
These commissions come up with plans that benefit the wealthy few but violate what the vast majority of Americans want. They are designed to come up with recommendations that benefit the wealthy few, and are presented to Congress with “up-or-down-vote” procedures that leave legislators and voters with no recourse – on purpose. Pre-ordained conclusions with non-democratic force-through procedures.
“Super Congress”
Another example of this kind of anti-democratic, elitist drift was a proposal floated over the weekend to establish a “Super-Congress” — a Politburo of elites, that sits above the Congress and is not accountable to the public. The idea is to save the people from themselves by creating a special 12-member panel of lawmakers who come up with proposals that the Congress must vote on, with no changes and an “up-or-down vote” to implement, thus bypassing the established, democratic system and keeping individual members from being held accountable for the results. The idea is to “tie the hands” of Congress, keep them from meddling, and get things done quickly before the public can rally opposition.
That this idea was even floated shows the extend of separation that exists between our elected officials and We, the People.
Public Will Revolt
Regular Americans are not currently following this, and are turned out because it is just one more Chicken Little coming out of DC. But the public will revolt when the final decisions are put in front of them. The public overwhelmingly supports Social Security and Medicare, and overwhelmingly want taxes increased on the wealthy.
So when the results are presented to them there will be trouble. And that is also part of the plan.
In the 2010 election Republicans campaigned on a theme that “Democrats cut $500 billion from Medicare” and won the election. In 2012 the public will be presented with hundreds of millions of dollars spent on campaign ads, crying out that “Democrats cut your Social Security and Medicare, while keeping taxes low for the rich.”
Think I’m kidding? They have already started.
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 Spending Cuts Don’t Cut, They Shift Costs To US

The conservatives are following up on their decades-old plan to use tax cuts to create terrible deficits, and then use the resulting “debt crisis” to cut government. But cutting government doesn’t mean the costs go away, it means that we each have to bear those costs ourselves, on our own, without the help of the rest of us. This is really about cutting democracy so the very rich can be even very-richer.
A Huge Tax Increase On Regular People
A government budget cut is like a huge tax increase on regular people because it increases what each of us pays for the things government does — or forces us to go without. This is because cuts in government spending don’t actually cut the cost of things, they just shift those costs onto each of us on our own.
For example, if you cut the the government’s Medicare or Medicaid budget our health problems don’t disappear, but each of us has to find ways to pay the cost of medical care or a nursing home on our own. If you cut what government spends for maintaining infrastructure, the roads/bridges/dams/schools/etc. deteriorate and we all pay for that through a less competitive economy, car-repair costs, and sometimes with our lives. And when each of us has to pay more for these things, it really does take money out of the economy. We’re spending on those things, instead of more usefully contributing to the economy.
Cuts Just Shift And Increase The Costs
So spending cuts really just shift the spending and cost of the things we have to do – and often increase those costs. This is because doing things on our own instead of collectively through our government is the smallest possible economy-of-scale. The best example of this shift-and-increase effect is the Republican plan to phase out Medicare. As I wrote above, our health problems won’t disappear just because government cuts out Medicare. But the costs of treating – or not treating – those health problems is now on us, individually, instead of aggregated through the mechanism of democracy. And that is money that would otherwise be spent elsewhere in the economy.
In Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan the Center for Economic and Policy Research (CEPR) explains what happens to the cost of health care if Medicare is eliminated. Summary: it shifts the costs to us, except each of us ends up paying seven times as much as the same care costs under Medicare. This is because Medicare covers millions, and that economy-of-scale means the government can negotiate bulk discounts, etc. that we cannot get on our own. From the CEPR explanation:

[The Republican] plan to revamp Medicare has been described as shifting costs from the government to beneficiaries. A new report from the Center for Economic and Policy Research (CEPR), however, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.
… In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. The paper also demonstrates that while [the Republicanplan ] shifts $4.9 trillion in health care costs from the government to Medicare beneficiaries, this number is dwarfed by a $34 trillion increase in overall costs to beneficiaries that is projected …

The Mechanism Of Democracy
In other words, the Repubican plan to phase out Medicare would cost the economy seven times as much as it cuts government. In this case the mechanism of democracy works seven times better than doing the same thing on our own. The economy of scale introduced by democracy — We, the People gathering together to watch out for and take care of each other — saves the economy sevenfold on costs. And that is money that would be spent by each of us but now goes just to cover the healthcare costs. This is one more reason why democracies are more prosperous for regular people than other forms of government that leave people on their own against the wealthy and powerful and drive all of the income and wealth to a few at the top.
Budget Cuts Deals Hurt Us And The Economy
When you hear that the “debt-ceiling” deal being negotiated in Washington is going to cut $4 trillion from the government’s budget it doesn’t mean that $4 trillion is is going to be saved and put into the economy, it means the opposite, and worse. It means that $4 trillion in costs will be shifted from the mechanism of democracy and onto our backs, each of us, on our own. And that means that the total costs of accomplishing the same things will go up. And that means each of us will have less to spend in the economy. Think about what that will do to jobs.

  • As government health care is cut each of us will take on those costs on our own, and will be paying up to seven times what the same care would have cost.
  • As infrastructure maintenance and modernization is cut, our economy will become less competitive, unemployment will increase and our wages and spending power will fall.
  • As spending on education is cut, our costs of educating ourselves and our kids will increase. College costs will soar.
  • As environmental regulation and enforcement is cut the costs of the resulting health problems and cleanups will increase.
  • As enforcement of labor laws is cut, our wages and protections will fall.
  • As etc. is cut, the costs of etc. are shifted to each of us, on our own, and the total costs of accomplishing etc. actually increase.

This Is About Democracy
In the bigger picture budget cuts are about shifting away from the mechanism of democracy — where We, the People aggregate and cover these costs in a more effective way — and instead moving costs to each of us on-our-own. And because of the effect of reduced economies-of-scale we then each face a much greater cost-per-person than if we did these things through the mechanism of democracy. This hurts our economy.
Don’t be fooled: this is really about shifting from democracy to a system where we are on our own, up against the wealthy and powerful. This is about shifting from a system where we can all be prosperous to a system where a few have all the wealth and power.
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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Debt-Ceiling Deal’s Cuts Could Crash Economy

Negotiating with crazy people is always a bad idea and negotiating with hostage-takers is dangerous. But negotiating with crazy hostage-takers is worse than dangerously bad. The “debt-ceiling” deal being negotiated to keep the economy from being crashed could crash the economy anyway. Making draconian cuts could throw us into another recession — one that would be much, much harder to get out of because we have used up many of our recession-fighting tools.
Withdrawing government spending literally “takes money out of the economy.” Democrats should instead offer the country a plan to invest in We, the People by modernizing our infrastructure, improving our schools, making us energy self-sufficient, improving our social safety net and restoring our manufacturing and key industries thereby making American businesses more competitive in the world economy. Propose this instead of painful cuts the benefit only the rich and take it to the country.
From Paying Off Debt To Massive Debt In Ten Years
Ten years ago the government had huge surpluses and was on a path to paying off the entire debt. What changed? Ten years ago last week the Bush tax cuts passed. Republicans promised the tax cuts would create jobs and grow the economy. Instead the economy had one of the slowest periods in our history, creating very few new jobs and causing stagnant wages, leading to huge personal debt. (But the rich got dramatically richer.) And those cuts, along with huge military increases, two wars all leading up to an economic crash caused by deregulation and mismanagement, caused the country’s debt to exploded. Taking office with a surplus of more than $250 billion, Bush left office with a $1.4 trillion budget deficit for his final budget year.

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Debt Limit Reached
Now the United States has reached the Congressionally-authorized borrowing limit and is heading towards default. The White House is negotiating an increase in this limit with the very people who exploded the debt, people who have a vested interest in killing the economy so they can win the next election, and their budget-cut proposals would do just that. It is suddenly dawning on lots of people that this whole enterprise of austerity, taking trillions out of the budget – and therefore out of the economy – is a very, very dangerous proposition.
Cuts Make Economy Worse
Withdrawing government spending literally “takes money out of the economy.” We have a crisis because of lack of demand. Republican solutions of giving the wealthy and corporations even more money and tax cuts obviously will not work because the rich don’t create jobs, we do. The rich are already richer than ever, with a greater share of the income and wealth than ever, and giant corporations are already sitting on tons of cash.
So with the stimulus winding down, and state and local budget cuts causing layoffs of teachers, firefighters and other government employees, Republicans are demanding even more layoffs from federal budget cuts as a “cure.” But cutting government as a prescription for creating jobs sounds a lot like their claim that cutting taxes increases revenue. The problem is a lack of demand, and budget cuts taking hundreds of billions out of the economy only makes that worse.
In a front-page story last week, Economy’s Woes Shift the Focus of Budget Talks, the NY Times sounded the alarm that things are not going well,

Recent signs that the economic recovery is flagging have introduced a new tension into the bipartisan budget negotiations, giving rise to calls especially from liberals to limit the size of immediate spending cuts or even to provide an additional fiscal stimulus.
… More broadly, however, the signs of an economic slowdown in past weeks — not least Friday’s report showing weak job growth in May — have altered the climate for those talks. Amid the emphasis in Washington on significant deficit reductions, … some Democrats, economists and financial market analysts are raising concerns that too much fiscal restraint this year and next could further undermine the recovery.

Democrats are also noticing that agreeing to cuts demanded by Republicans could well have an effect on their chances in the next election.

“I think Obama himself is going to have to move or he’s going to risk losing the next election,” said Mark Weisbrot, a liberal economist and a co-director of the Center for Economic and Policy Research. “He’s going to have to say clearly that the federal government has to step in when the economy is so weak,” regardless of whether his proposals can pass in the Republican-controlled House.

Republican economist Martin Feldstein’s recent op-ed in the Wall Street Journal, The Economy Is Worse Than You Think, also warned how bleak the economy looks and what the prospects are. (Of course, Feldstein argues for Republican plutocratic solutions: cut taxes, Social Security and Medicare.) From the op-ed:

The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all. A sustained expansion cannot be built on inventory investment. It takes final sales to induce businesses to hire and to invest.
The picture is even gloomier if we look in more detail. Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.
The data for May are beginning to arrive and are even worse than April’s. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers’ reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.

Feldstein even agreed that the stimulus was not enough,

As for the “stimulus” package, both its size and structure were inadequate to offset the enormous decline in aggregate demand. The fall in household wealth by the end of 2008 reduced the annual level of consumer spending by more than $500 billion. The drop in home building subtracted another $200 billion from GDP. The total GDP shortfall was therefore more than $700 billion. The Obama stimulus package that started at less than $300 billion in 2009 and reached a maximum of $400 billion in 2010 wouldn’t have been big enough to fill the $700 billion annual GDP gap even if every dollar of the stimulus raised GDP by a dollar.

The investment community is taking notice, too. From Reuters: Deficit cut would trim growth: BlackRock’s Fink,

A $4 trillion reduction of the U.S. budget deficit, if enacted by Congress, would trim economic growth by one percentage point a year for the next decade, BlackRock (BLK.N) Chief Executive Laurence Fink said.
With analysts already forecasting modest growth of 2 percent to 3 percent annually, that would leave the United States with an economy expanding at only about 1 percent a year, Fink said at the Morningstar investment conference on Friday.

Fink, however, argues that the government should do it anyway, along with cutting corporate taxes.
Cuts Make Deficit Worse
In a blog post, Thoughts on Voodoo, Paul Krugman explains (with some math) why austerity right now doesn’t help, and only makes deficits worse,

There’s a quite good case to be made that austerity in the face of a depressed economy is, literally, a false economy — that it actually makes long-run budget problems worse.
[. . .]How big do these negative effects have to be to turn austerity into a net negative for the budget? Not very big. In my example, the real interest payments saved by a 1 percent of GDP austerity move are less than .02 percent of GDP; if the marginal tax effect of GDP is 0.25, that means that a reduction of future GDP by .08 percent is enough to swamp the alleged fiscal benefits. It’s not at all hard to imagine that happening.
In short, there’s a very good case to be made that austerity now isn’t just a bad idea because of its impact on the economy and the unemployed; it may well fail even at the task of helping the budget balance.

My recent post, See WHY Austerity Can’t Reduce The Deficit links to the equations that explain the background of Krugman’s (and others’) concusion,

OK, so we have a $100 GDP with $10 deficits and we want to cut that to $5. Kash explains that a $5 spending cut means (by definition) that GDP immediately drops $5, and this (by definition) $5 drop in consumer income makes tax revenue drop as well (as well as a further drop in GDP). After some calculations (go to the post) Kash shows that a $5 cut makes deficits drop to 7.4%, not 5%, but GDP also drops quite a bit – maybe 7 or 8%. Seriously, go see the calculations, they are not difficult.

Just cutting people out of the economy doesn’t fix the problem, it shifts the problem and eventually will kill the economy.
Stimulus Worked — But Was Not Enough

Private Sector Jobs - May 2011

Here is the timeline you see on this chart:

  • First, there is the Bush freefall, from the policies Republicans want to return to
  • then the effect of the stimulus spending reverses the decline, bringing back job growth
  • then the stimulus winds down, and job growth levels out
  • and combined with state & local budget cutbacks — spending cuts, which Republicans want more of — job growth stalls. (Note that this chart is private sector only doesn’t show effect of government job losses.)

Jobs Fix Deficits
Jobs fix deficits. Restoring good-paying jobs starts to restore the tax base and stops the emergency spending on the unemployed. The increased demand as people find work and paychecks revives retail and manufacturing. Housing recovery, for example, depends on more jobs. But with unemployment high and wages are low, so many people just can’t afford to buy — or keep — a house.
Only The “Pain Caucus” Benefits From Cuts
In the recent op-ed, Rule by Rentiers, Krugman explains that these budget-cut austerity policies help a small, select group. He calls them “the pain caucus.”

The latest economic data have dashed any hope of a quick end to America’s job drought, which has already gone on so long that the average unemployed American has been out of work for almost 40 weeks. Yet there is no political will to do anything about the situation. Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending — destroying jobs in the process — with the only difference being one of degree.
. . . Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
. . . While the ostensible reasons for inflicting pain keep changing, however, the policy prescriptions of the Pain Caucus all have one thing in common: They protect the interests of creditors, no matter the cost. Deficit spending could put the unemployed to work — but it might hurt the interests of existing bondholders. More aggressive action by the Fed could help boost us out of this slump — in fact, even Republican economists have argued that a bit of inflation might be exactly what the doctor ordered — but deflation, not inflation, serves the interests of creditors.
[. . .] No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.

Cuts Cold Cost Election
Policies of austerity cause large-scale suffering — done now to avoid restoring tax rates at the top. Budget cuts are asking the public to take the hit, through cuts in programs for us, for among other things the cost of bailing out Wall Street.
Republicans understand that the public will blame Obama for the cuts and are certainly planning on using the resulting lack of jobs in the next election. Remember, in the 2010 midterms they campaigned and won using a theme that Democrats were to blame for “$500 billion in Cuts to Medicare”.
The conservative noise machine is already claiming that Obama is harming Social Security. For example, see last week’s Obama busting Social Security by conservative Don Surber,

Having cut employee contributions by one-third, the president now wants to cut employer contributions in a desperate CYA to cover up the Obamess Economy.

Public Wants A Different Solution
The American Majority wants the same solutions that economists agree work better for more people. The public wants tax increases on the rich. They want direct job creation by government. They want a revival of American manufacturing. They want a national industrial/economic policy. They understand that growing the economy reduces the deficits.
Austerity is about intentionally causing suffering, so a wealthy few benefit. But investing in our country to create jobs, modernize our infrastructure, improve our schools, make us more energy self-sufficient will not only make our country more competitive in the world economy will improve the lives of We, the People. Obviously this is the better choice, and a significant percentage of the public will have Democrats’ back if they offer this plan.
The Congressional Progressive Caucus’ People’s Budget is the template for a job-creating deficit solution. The Progressive Caucus is a group of progressives in the Congress who have put together a budget that fixes the deficit and grows the economy, providing jobs. It is called The PEOPLE’S Budget Plan. You can read the plan at: Congressional Progressive Caucus : FY2012 Progressive Budget,

The CPC proposal:
• Eliminates the deficits and creates a surplus by 2021
• Puts America back to work with a “Make it in America” jobs program
• Protects the social safety net
• Ends the wars in Afghanistan and Iraq
• Is FAIR (Fixing America’s Inequality Responsibly)
What the proposal accomplishes:
• Primary budget balance by 2014.
• Budget surplus by 2021.
• Reduces public debt as a share of GDP to 64.1% by 2021, down 16.5 percentage points from a baseline fully adjusted for both the doc fix and the AMT patch.
• Reduces deficits by $5.6 trillion over 2012-21, relative to this adjusted baseline.
• Outlays equal to 22.2% of GDP and revenue equal 22.3% of GDP by 2021.

Beyond the people’s budget we need a massive investment in infrastructure modernization. This infrastructure work has to be done anyway, no matter what. The longer we delay it the more our country falls behind. It is millions of jobs that need doing at a time when millions need jobs! (And by the way the government can borrow at nearly zero interest rates right now — one more reason to do it now.)
The Republicans are demanding that we cut and gut our government and therefore our economy in exchange for keeping the country from defaulting on its debts. The deal they are demanding will do just as much harm as default. Instead we need to invest in We, the People with jobs and infrastructure that enable us to grow our way out of this mess.
Actions
Tell President Obama to put the People’s Budget on the table.
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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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.

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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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Republicans Announce Jobs Plan — This Time It’s Different

Republicans announced something they called a “jobs plan” today. This time it’s different. It really is. This time it really will create jobs instead of just handing even more money to a few at the top at the expense of the rest of us. You might not believe this because Republicans sell everything by calling it a jobs plan. And what they sell is always tax cuts for the wealthy while cutting the things We, the People do for each other. And it always ends up messing everything up for most of us. But this time it’s different.
But This Time It’s Different
Republicans always offer something called a “jobs plan” and the plan is always tax cuts for the rich while gutting the things We, the People — a.k.a. government — do for each other. Their “jobs plans” always end up enriching the already-wealthy while messing things up really bad for us.
But this time is different because this time they actually offered something that is called a “jobs plan.” So there you go! And this time the plan is different because this time the plan is to cut taxes for the wealthy and giant corporations, cut government protections for working people and the environment, but also opening our borders to let in goods made in countries unhampered by democracy’s protections while cutting taxes on companies that offshore jobs. So Bob’s your uncle.
It will work. Republicans always promise their plan will work, and then it messes things up for most of us, but this time it’s different because this time they say the plan will work. So this time it is different.
The “Plan”
You can look over the official Republican job plan here (PDF): The Republican Plan for America’s Job Creators. Here is a summary of the points: (summary: cut taxes for the rich, cut the things We, the People do for each other, send factories out of the country.)

  • Require congressional (anonymous corporate campaign donations) approval of any significant federal regulation (overriding scientists and experts in the executive branch).
  • Let companies bring overseas (offshoring jobs) profits into the US without paying US taxes.
  • Pass “free trade” (more offshoring of jobs) agreements with Colombia, Panama, and South Korea.
  • Streamline the patent system.
  • Give more non-Americans visas to to take professional-level jobs here because “high-tech companies in America are struggling to hire qualified employees.”
  • Let the FDA approve drugs (Vioxx) and devices faster, with less testing.
  • Expand oil and coal exploration and production (Deepwater Horizon oil spill, climate change).
  • Cut government spending (Medicare, but don’t touch military) by almost $6 trillion over the next ten years.

(Note, regarding the phrase “job creators,” see Actually, “The Rich” Don’t “Create Jobs,” We Do.)
What’s New In This Plan?
Nothing.
But this time the plan is to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country. This time it’s different from those other plans to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country.
The Name Is The Game
It’s all in the name. Republicans think giving a plan a name is what matters, no matter what the plan actually does. Say whatever you need to say, but do what you wanted to do all along. They believe that people will be fooled into thinking something does a certain thing because the name says that is what it does, regardless of the actual details and results. For example, their budget plan cuts government “costs” by eliminating Medicare and replacing it with something entirely different, but since it is still named “Medicare” it still is Medicare.
So today they are recycling the usual stuff and naming it a “jobs plan,” are we are supposed to think therefore it means it is a plan that will create jobs. But really, it means sending even more money to a few at the top at the expense of the rest of us and of our country’s future.
Been There Done That — Made A Real Mess
Everything they are proposing has been tried, and tried again, and has not worked. After Reagan took office they cut taxes, deregulated & gutted government, etc. terrible debt, trade deficits, the S&L crisis, wage decline, etc. resulted. After George W Bush took office they again cut taxes, deregulated, stopped enforcing the remaining laws and regulations, privatized government and contracted the functions to cronies, expanded oil drilling and opened the borders to trade with countries that pay very little and have no environmental protections, and we saw what happened.
We are living through the nightmare that resulted. Worldwide financial collapse. Tens of thousands of American factories closed. Millions of jobs lost. Millions of lost homes. Wars. Climate change unaddressed and worse. Terrible concentration of income and wealth. Terrible trade deficits. Terrible debt. Pensions gone, savings gone, heath care benefits gone, government rampantly corrupt, unprosecuted corporate fraud common, oil spills, mountaintops removed, miners killed … a terrible, terrible list of bad results that just goes on and on and on and on and on…
Some Republicans fervently believe that doing these things will help, but the rest of them understand exactly what they are doing. These are not stupid people, and all you have to do is look around to see what actually happens in the real world when you do these things. They do them precisely because these are the results.
The Party Of Wall Street And Billionaires
Here is a fact: today when you hear from Republicans you are hearing from Wall Street, giant oil companies, huge multinational firms and a few billionaires, period. OK, maybe you also get a dose of religious right with your tax cuts, but really they just say that stuff to get those votes, too, but what they actually do is tax cuts and policies that enrich the already-wealthy at the expense of the rest of us. And the things they do always mess everything up.
But this time it’s different. It really is.
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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Budget Talks: Who Speaks For The American People?

When we hear about the deficits we hear a lot of scare stories, which most “serious” media just echo and amplify. The prevailing “serious” narrative we hear is that we must cut entitlements — any “serious” budget proposal cuts Medicare and Social Security. Even though they just extended tax cuts for the rich the deficits are the worst problem in the world, ever, so we are supposed to be really scared and give in. Seriously.
Polls show that the public wants taxes raised on the rich, cuts in military spending and more & bettter-paying jobs. The public isn’t stupid, because it turns out that these are exactly the things that economists say will get us out of the deficits. But raising taxes isn’t considered a “serious” deficit-cutting option. Either is cutting military. And to top it off, in DC the idea of creating more and better-paying jobs is so unserious that it isn’t even discussed.
Serious Commissions and Gangs Of Negotiators
The public recoils every time politicians get close to reaching their “serious” goal of cutting Social Security or Medicare, instead of raising taxes and cutting military. So the DC elite come up with ways to mask what they are doing : commissions, “triggers,” “caps,” “across-the-board cuts” all of which avoid actually spelling out that these will cut Social Security and Medicare without touching taxes or military. All the “serious” people favor this approach.
There are so many “serious” reporters and editors and politicians and deficit commissions and negotiators and even “gangs” consist of very “serious” people who come up with these “serious” recommendations.
Who Is At The Table?
These “serious” people who engaged in these “serious” negotiations have something in common. They are almost all very, very well paid, usually white, always DC or Wall Street or big-corporate insiders, always college-educated and comfortable people who work in offices. They do not reflect the diverse makup of the American population. Doing that wouldn’t be “serious,” but it would be ‘small-d’ democratic.
The fact is, the American People just are not reflected “at the table” in these budget negotiations. When you hear about these deficit commissions, discussions, etc. ask yourself: How many make less than $250K? How many are unemployed? How many work taking care of someone else? Who speaks for We, the People in these negotiations?
And ask yourself: What would these deficits talks, commissions, gangs consist of if they were representative of the interests of regular Americans?
What If a Deficit Commission Looked Like America?
If a deficit commission with 100 members had the diversity of the American population “at the table” it would look like this:

  • 19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.
  • 43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.
  • 98 of the 100 members would make less than $250,000 a year.
  • 50 of the members would come from households in which the total income of all wage-earners is less than $52,029.
  • 13 wold have income below the poverty level.
  • 14 members would be receiving food stamps.
  • 16.6% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission at all instead of a jobs commission.
  • The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and work waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do hard, manual labor get an extra vote each on what the retirement age should be.)
  • 74 members would not have college degrees.
  • 20 would not have graduated high school.
  • 18 would speak a language other than English at home.

Have you seen any deficit commissions like that lately? No, seriously, have you?
What does the PUBLIC want?
A “serious” deficit commission in a democracy would come up with deficit solutions that reflect what the public wants. Here are some of the polling results compiled at The American Majority Project Polling:
Social Security & Medicare:

  • 53% support Collecting Social Security taxes on all the money a worker earns, rather than taxing only up to about $107,000 of annual income.
  • 57% oppose raising the retirement age from 66 to 67.
  • 64% oppose spending cuts to Social Security.
  • 82% oppose cutting Social Security benefits in order to reduce the debt.
  • 67% oppose cutting Social Security to make the program more solvent in the long term.

  • 66% support enacting Social Security taxes on wages about $106,800 (the Pay Roll Tax Cap) to make the program more solvent.
  • 64% oppose spending cuts to Medicare.

Lots more polling on Social Security at The American Majority Project Polling
Taxes:

  • 74% believe eliminating tax credits for the oil and gas industries to help reduce the budget deficit is mostly or totally acceptable.
  • 68% believe that phasing out the Bush tax cuts for families earning $250,000 per year is mostly or totally acceptable to help reduce the budget deficit.
  • 72% of one group of 512 participants favored raising taxes on people earning more than $1 million a year over cutting important programs once they received details on the impact of the budget cuts. That percentage had been 62% before receiving details of the cuts.
  • 53% believe it is totally or mostly unacceptable to reduce the corporate tax rate from 35% to 25% .
  • etc…

Lots more polling on taxes at The American Majority Project Polling
Military Spending:

  • 67% support minor or major reductions in funds to national defense.
  • 66% support removing all troops from Iraq and Afghanistan.
  • 49% said to cut defense “even if it means eliminating programs that bring jobs to your state.”
  • Pew Research Poll, March 8-14, 2011
    etc.

More polling on military spending at The American Majority Project Polling
Union Employees and Collective Bargaining Rights:

  • 81% support the rights of workers to unionize to negotiate with their employers.
  • 77% believe public employees who belong to a union and work for the state government, city government, or school districts should have the same right to bargain when it comes to their health care, pension and other benefits like those members of unions who work for private companies.

More polling on labor rights at The American Majority Project Polling
Job Creation and the Economy:

  • 56% believe creating jobs, rather than spending cuts is the more important priority for the federal government right now.
  • 56% agree that “it is time for government to take a larger and stronger roll in making the economy work for the average American.”
  • 62% believe the government should focus on creating jobs, even if it means increasing the deficit in the short-term.

More polling on jobs and the economy at The American Majority Project Polling
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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A Medicare Phase-Out By Any Other Name Still Stinks

The Republicans voted to phase out Medicare and use the money for even more tax cuts for the rich. The public found out and turned out. So now they are coming up with new ways to mask the same thing. They call them “triggers,” “across-the-board cuts” and “spending caps” but these are all really just about cutting Medicare and Social Security and education and giving more and more tax cuts to the rich. Please don’t be fooled. And please get active and let them know you do not like what they are up to.
The “Ryan Plan” To Phase Out Medicare
A Republican named Paul Ryan came up with a plan to phase out Medicare and use the money to give even more tax cuts to the rich. Hence the name “Ryan Plan.” The plan replaces Medicare with a “premium support” voucher that covers some of the cost of insurance, (as if an ill 80-year-old can get insurance at all. The trick was to start the phase-out in 10 years, hoping people won’t notice.
While this phase-out of Medicare cuts “government spending” it just shifts that cost to you and me, and actually dramatically increases the overall costs. The Center for Economic and Policy Research calculates that it adds $7 in individual costs (you and me) for every $1 it cuts in “government spending.” But the mask that it cuts “government spending” gives them cover for even more tax cuts at the top.
Town Hall Anger
Last week every Republican in the House (save for a few) voted to say, “Yes, let’s do this.” Then they went home and met with constituents at town hall meetings, and were surprised to learn that regular people are smarter than they thought they were. They thought they could just slip this past people, under the cover of deficit hysteria. Instead people shows up at town hall meetings demanding answers. And they were not happy about what the Republicans were doing.


So now, returning from exposure to the unwashed masses they are saturating the airwaves with corporate-funded propaganda, ads with soothing voices telling us how good for us the Republican plan to get rid of Medicare will be. And they are working on new plans to do the same thing, but to make it less obvious what they are up to. “Triggers. “Caps.” “Across-the-board cuts (that leave out military and cut taxes at the top.)” Etc.
The Polls
Poll after poll after poll after poll shows that the public understands where the deficits came from — tax cuts for the rich, huge increases in military spending and the costs of the recession — and wants their government to fix these causes of the deficit. But the people are not in control of the government, the powerful few who own the giant corporations are, so the government keeps coming back again and again with schemes to cut the things government does for We, the People and use the savings to cut taxes on the wealthy and the corporations.
Demand The Details
Do not accept any plan that does not detail specifically what they are doing to fix the problems. Any plan that does not clearly raise taxes on the rich, cut the military spending and provide jobs and a solid economic foundation for the future by investing in infrastructure and alternative energy is not addressing the problems. (The People’s Budget is a plan that does these things.)
These are the things that the public is demanding. This is why the powerful forces in control of the government keep coming up with shadowy detail-free schemes like “triggers” and “spending caps.” They are trying to mask tax cuts for the rich and cuts in the things We, the People do for each other like Medicare, Social Security and education.
Get Angry
We are bombarded with scheme after scheme to take away what is ours, so that a wealthy few can have even more. They have plan after plan. Here is comedian Lee Camp explaining that “Evil People Have Plans“:

Don’t just take it, foil their plans. React. Get angry.
And then:
Get Active
Get out there and get your voice heard. Call your member of Congress and both senators. Show up at town hall meetings and demonstrations and protests. Sign up to be on mailing lists of organizations like Campaign for America’s Future, MoveOn, Srengthen Social Security and Don’t Make Us Work Till We Die!, Credo Action, Coalition on Human Needs, US Uncut, On May 12, Campaign for Community Change, Working America and others who are working to fight back. Join Up.
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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Royal Wedding Of Austerity And Trade Deficits Is Killing Our Economy

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Sometimes you can just see glimmers of something through the DC brain fog, other times it becomes so clear that you can’t ignore it. The current DC brain-fog motto is, “if it doesn’t work, do it more.” Today’s GDP-growth report shows that austerity isn’t working, so the geniuses in DC want to do it more. And they say, “government just gets in the way of business” so we send our businesses out on their own to compete with governments, and the resulting trade deficits eat our jobs.
Cutbacks Cut Growth
How long ago was it that DC was all about cutting taxes for the rich even more? And how many minutes after that was DC all about cutting budgets – “austerity” – because of the resulting budget deficits? So instead of the jobs that will fix the deficits the government gives us cutbacks — cutbacks in taxes on the rich, cutbacks in construction projects, cutbacks in teachers and police and other government functions, cutbacks in the things We, the People do for each other.
We watch as England, Greece, Ireland and other countries try cutbacks – austerity – to get out of slow growth and their growth gets slower as a result. The US tries it, too, and our growth gets slower, too.
The first quarter growth figures are out: 1.8% for the first three months of the year,

Total output grew at an annual pace of 1.8 percent from January through March, the Commerce Department said Thursday, after having expanded at an annual rate of 3.1 percent in the fourth quarter of 2010.

But the DC fog machine blames the weather, not austerity.

Higher commodity prices and winter blizzards that shuttered businesses and delayed construction were among the main causes of the slowdown.

Our growth slows because of austerity. So they blame the weather and insist on more austerity. Because austerity “gets government out of the way” of the wealthy few and their accumulation of the rest.
Trade Deficit
As the economy recovered a bit and people started to buy a few more things , the things came from elsewhere, and the money and jobs just left the economy. Without government policies to deal with it, our trade deficit will continue to get even worse, costing us even more jobs and growth and draining even more money out of the country.
Germany runs a trade surplus, so German unemployment is at its lowest level in 19 years. Headline: German Unemployment Declines to 19-Year Low as Export Boom Drives Demand,

German companies are hiring as they increase production to meet booming export orders, fueling domestic demand. … German factory orders and industrial production rose more than economists predicted in February. … More than a third of Germany’s medium-sized companies plan to take on staff in the second quarter …

Germany also pays workers more than we do, gives them lots and lots of vacation time, health care, pensions, rights on the job — all the things that our leaders say hurt our businesses.
Our leadership is making every effort to return to the old economy that caused the crisis. This is because those who benefited from that economy are still in control of the system, still using their great wealth to get what they want, damn the consequences for the rest of us. (Hint, the first link is to a post titled, Nine Pictures Of The Extreme Income/Wealth Gap, and the second is a post titled, Corporate Propaganda Response To Town Hall Medicare Anger.)
Contractionary Policies Cause Contraction
Conservatives say so many silly things that are proven wrong by the simplest fact-checking — cutting taxes increases revenue, taxes take money out of the economy, tax cuts grow the economy — and the silly thing they say that is hitting us now: cutting back causes expansion.
Huh?
Here is what really happens in the real world. Following are a few charts showing the effect of the “stimulus” and what has happened since the stimulus ran out.
First, manufacturing. See the plunge through 2008? That’s the collapse. See the sharp change to an upward direction through 209? That’s the stimulus. See the leveling off since? That’s the end of the stimulus.
ISMFedApril2011
Now look at the following chart of job growth. See the downward slope, when we were losing more and more jobs every month? That’s the collapse. See the upward slope, when we were losing fewer jobs every month, up to where we were actually gaining a bit? That’s the stimulus. See the leveling off, standing still through 2010, going into 2011. That’s the end of the stimulus.
chart_jobs2
You can see in front of your face what works and what doesn’t. We should be doing what works, not what doesn’t. Why did I even have to write that sentence?
Solutions
As I wrote the other day, we have to invest in rebuilding our infrastructure if we want to continue to be competitive in the world, so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.
We need to retrofit our economy to be energy efficient, so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.
We need more teachers, more police, more firefighters, more judges, more scientists, more social workers, more park rangers, more noise abatement and met and safety and environmental and other kinds of inspectors and so many other things that We, the People do for each other — so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.
So right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.
But wait, there’s more:
National Manufacturing Strategy

The idea of a manufacturing strategy or industrial policy is hardly a radical concept. Alexander Hamilton constructed America’s first industrial policy in 1791. Setbacks during the War of 1812 due to a lack of domestic capacity to build naval vessels and military equipment cemented the determination of the federal government to grow manufacturing, a policy that continued until the end of World War II.

To solve the trade deficit and create millions of good-paying jobs (like in Germany) we need a national manufacturing strategy — a government-sanctioned plan to ensure that U.S. manufacturers remain competitive in the global marketplace. Click this link for a few examples of countries that have national manufacturing strategies.
Following is the Alliance for American Manufacturing’s plan:

Expand American Production, Hiring, and Capital Expenditures

  • Establish a manufacturing investment facility to leverage private capital for domestic manufacturing
  • Expand and make permanent clean energy manufacturing tax credits and industrial energy efficiency grants to allow America to lead on green job creation
  • Link federal loan guarantees for new energy infrastructure projects, including nuclear, wind, solar, other renewable energy sources, as well as the smart grid, with expanding domestic supply chains
  • Adopt immediate, up-front expensing rules for plant and equipment to spur capital expenditures
  • Enforce our trade-legal Buy America and other domestic procurement requirements to prevent leakage of tax dollars overseas
  • Invest in America’s Infrastructure

  • Create a National Infrastructure Bank to finance high-value, long-term infrastructure projects, such as roads, bridges, high-speed rail, and other needs
  • Enact a robust, multi-year surface transportation infrastructure program of at least $500 billion financed exclusively by fuel taxes
  • Enhance Our Workforce

  • Refocus on technical and vocational education, providing a seamless program that bridges high school and post-secondary education to produce the next generation of highly skilled manufacturing workers
  • Reward companies that are investing in effective skills and training programs for their workers
  • Make Trade Work for America

  • Keep America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses
  • Penalize and deter mercantilist nations such as China that manipulate their exchange rates and implement non-tariff barriers to gain an unfair trade advantage
  • As the Administration works to double exports, expand the goal to include balancing our trade account so that gains in exports are not overwhelmed by increased imports
  • Rebuild America’s Innovation Base

  • Make permanent the research and development tax credit and enhance it to incentivize commercialization and production in America
  • Focus federal investments in new technology and workforce training on promoting regional clusters of innovation, learning and production
  • And finally,
    It Never Hurts To Quote The Boss
    Press release

    WASHINGTON’S FIXATION WITH AUSTERITY IS HURTING THE ECONOMY
    Campaign for America’s Future Urges Lawmakers to Put Job Creation First
    Washington, DC – Campaign for America’s Future’s co-director Robert Borosage commented on today’s economic indicators. Borosage said:
    “The first quarter growth figures — 1.8% for the first three months of the year — are an ominous reminder of the reality that Washington has forgotten.
    “This economy is in trouble. For most Americans, the recession has not ended. Growth is painfully slow. Unemployment remains high. Home values are dropping; gas prices are rising; wages are not keeping up.
    “Despite this — and despite the warnings of economists — Washington, driven by the new House Republican majority, has turned prematurely to austerity. Contractionary policies cause contraction. They will impede any recovery, and slow an economy that is barely moving.
    “Washington offers no answer because it is fixated on the wrong question. The question is how do we get the economy going and put people back to work — not simply how do we balance our books? Every deficit reduction plan — from the President’s to the House Republican’s to the Congressional Budget Office projections — assumes faster growth than we saw in the first quarter.
    “The most powerful deficit reduction measure is to put people to work, turning them into consumers and taxpayers. If growth and unemployment stay at this level, deficits will rise, not fall. The White House and the Congress should turn to measures to put people to work, to stave off debilitating layoffs of teachers and police at the state and local level, instead of ignoring the reality that Americans are struggling with every day.”

    Sobotka, from The Wire:

    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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    Yet Another Poll Shows… Plutocracy Stupid, Democracy Smart

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
    Yet another poll is out, showing that the public wants taxes raised on the rich and on Wall Street and the giant multi-national corporations, and does not want cuts in the things We, the People do for each other. Other polls show the public wants cuts in military spending, and increases in spending on infrastructure and other job-creation, economy-growing investment. And, in fact, if we did these things the deficit problem — caused by tax cuts for the rich and increases in military spending — would be fixed. So why do Washington deficit-reduction plans always do the opposite?
    From today’s Progressive Breakfast,

    Yet another poll shows strong support for raising taxes on the wealthy, opposition to Medicare and Social Security cuts. W. Post: “The Post-ABC poll finds that 78 percent oppose cutting spending on Medicare as a way to chip away at the debt … 72 percent support raising taxes [on family income over $250,000] … “

    Meanwhile, in DC the insider story is that the “Gang of 6″ is “closing in” on a “deficit deal.” In all likelihood it will (they all do) end up being about cutting taxes for the rich and cutting the things We, the People (government) do for each other and cutting investment in the things that make our economy grow: infrastructure, education, science, job-creation, etc…
    Serious People
    Another popular DC-insider deficit plan is called “Simpson-Bowles.” This plan was put together by a right-wing Republican, former Republican Senator Alan “three hundred million tits” Simpson and a Wall Streeter, Erskine Bowles, a member of the Board of Directors of Morgan Stanley. This plan (they all do) cuts taxes for the rich and cuts the things We, the People (government) do for each other. It is put together by “serious” people so it is considered “serious.”
    Poll after poll shows one thing, DC plan after DC plan does another. The public isn’t considered “serious.” Republicans and Wall Streeters are considered to be “serious.” In fact, things the public wants and needs are not considered at all in today’s DC. Democracy is not “serious.”
    Democracy vs Plutocracy
    In January I wrote about this phenomenon in, Sen. Conrad Plutocracy Plan Vs. Democracy Deficit Commission. Back then the deficit plan was (they all do) to cut taxes on the rich while increasing them on everyone else, and cut Social Security, even though Social Security has nothing whatsoever to do with the deficit. I wrote,

    This is what happens when Wall Street and conservative Republicans design a plan: give even more to the already-wealthy few, gut what our government does for We, the People.
    Here is the real deficit commission that you would expect to see if we were a democracy instead of a plutocracy: It would have 100 members:

    • 98 of the 100 members would make less than $250,000 a year.
    • 50 of the members would come from households in which the total income of all wage-earners is less than $50,221.
    • 17% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission instead of a jobs commission.
    • 19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.
    • 43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.
    • The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do manual labor get an extra vote each on what the retirement age should be.)
    • Include people who are on active duty in the military – the people who said they don’t need that expensive plane, but couldn’t get body armor.
    • 60 members would not have college degrees.
    • 13 members would be receiving food stamps.

    What The Public Wants Is Smart
    And guess what, when you take a poll, you are measuring what the public wants. A poll shows what would happen if the deficit plans were drawn up by regular people. And POLLS SHOW they want tax increases on the rich and cuts in military. They want jobs programs and infrastructure investment and investment in the things that grow the economy. They want a Medicare-For-All health care plan, and in fact other countries have proven this solves the long-term health care cost problem.
    Plutocracy Stupid, Democracy Smart
    Here’s the thing: what the public wants actually would fix the borrowing. And what the plutocrats want would make it worse. The deficit is the result of tax cuts for the rich, increases in military spending, spending on the recession and long-term cost increases in health care. So fixing that means putting taxes back where they were before the deficits, realizing that the Soviet Union is gone, investing to grow the economy, and implementing a Medicare-For-All plan like the rest of the world has.
    And that is what polls show the public wants to so.
    So maybe the public isn’t that stupid after all. Maybe democracy can work. The plutocrats plans are stupid, because the plutocrats just greedily give everything to the plutocrats, and sacrifice everyone’s future, even the plutocrats’.
    Plutocracy stupid, democracy smart, fire baaaad!:


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    The Lesson Of The 2010 Election Was Jobs, Not Cuts

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
    What was the lesson of the 2010 election? Since the election conservatives and the DC opinion elite have been claiming that the public voted for budget cuts. But before the election they ran ad after ad saying Dems cut your Medicare and didn’t provide jobs. Now every single poll shows that the public wants jobs not cuts.
    Politico today has one more typical Washington Elite journalism story. Their story, Govs face budget blowback, begins,

    “It was supposed to be one of the clearest messages of the 2010 elections: Voters were finally fed up with government spending.”

    Politico begins their story with one more example of the gap between the DC Elite and the rest of the country. In the rest of the country we remember that the Republican campaign theme against Democrats was that Democrats were responsible for “Half A Trillion In Cuts To Medicare”.
    Who can forget that? Ad after ad after ad after ad after ad blasted out from the TV saying Rep. So-and-so “cut $500 billion from Medicare” and many of those ads also blasted the Democrat because there was no cost-of-living adjustment to Social Security last year. That is just a fact, the Republicans campaigned against cuts.
    Here are just a few of the ad barrage Republicans ran before the election:







    And voters were sent flyers like this: (click for larger)
    politifact-photos-ron_johnson_flier_combined_660

    Talking Points Memo captured it well today, calling it “Opinion Journalism,”

    There’s a feature piece in Politico today that perfectly captures the assumptions most national political reporters, especially at certain publications, bring to the core questions of budgetary politics. The gist of the piece is that ‘we’ all agree that the message of the 2010 election was that the public has decided that government is too big and wants dramatic budget cuts. But now it seems like the governors who are really going whole hog on this — overwhelming Republicans — are getting really unpopular. Ergo, the public isn’t really ready for the “grown-up conversation” about budgets than it seemed they might be.

    The public wanted jobs before the election, voted for jobs, wants jobs, needs jobs, demands jobs. End of story.
    On April 4: We Are One
    On April 4, millions of people will come together for the “We Are One” series of community and workplace actions.
    “On April 4, 1968, Dr. Martin Luther King Jr. was assassinated in Memphis, where he had gone to stand with sanitation workers demanding their dream: The right to bargain collectively for a voice at work and a better life. The workers were trying to form a union with AFSCME.”
    Find local events in your area here.
    “Join us to make April 4, 2011, and the days surrounding it, a day to stand in solidarity with working people in Wisconsin and dozens of other states where corporate-bought politicians are trying to take away the rights Dr. King gave his life for.”
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    Cutting Government Creates Jobs Like Cutting Taxes Increases Revenue

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
    A “report” from Republican staff of the Joint Economic Committee says that the path to job creation is cutting … the very things that create jobs. This is like saying that cutting taxes increases revenue. We know how that worked out, and the job-consequences of budget cuts are going to be just as disastrous.
    Sometimes you can cut through ideology by looking at what actually happens in the real world. Reagan cut taxes: huge deficits resulted. Clinton raised taxes, the deficits went away. Bush cut taxes, we went back to huge deficits. And you can see the same thing when you look at government spending and jobs. England and Greece are trying austerity, and their economies are sinking as a result. In 1937 the United States learned this lesson, succumbing to deficit cutting which choked off the recovery from the depression. On the other hand, the “stimulus” boosted the economy, held off a depression and created millions of jobs — but not enough jobs to overcome the Bush years. Here is the chart — note the obvious effect of the stimulus and of the end of the stimulus on the jobs picture:

    chart_jobs2

    Cut Cut Cut To Grow Grow Grow?
    Republicans say that cut cut cut leads to grow grow grow. Their prescription is to cut taxes to “reduce uncertainty” which they say will result in job creation. Never mind that Clinton raised taxes and then the economy boomed. Then Bush cut taxes and then gave us the worst job-creation record in decades, even before the recession started! From The Hill, GOP study backs ‘cut and grow’ but says new jobs could take time,

    House Republican leaders on Tuesday released a study that they said shows their “cut and grow” strategy will boost the economy.
    
The study argues that reducing uncertainty about future taxes will increase household spending and business investment, spurring growth and hiring.
    House Majority Leader Eric Cantor (R-Va.) said the report shows “less government spending means more private sector jobs.”

    Just how will “certainty” about tax cuts create jobs?

    The study argues that “non-Keynesian effects” result from government budget cuts. It says households expecting future taxes to pay for government spending will purchase more homes and durable consumer goods once uncertainty about future taxes is erased.

    Right, knowing that taxes will be lower, people will go out an “purchase more homes.” The people funding the Republicans will just go buy an 8th house with their tax savings. And maybe a Maybach or two. Plutonomy in action!
    No Path To Jobs
    Laying off teachers and firefighters is not the path to jobs. Cutting government cuts the very things that nurture the soil in which business can thrive. We need a modern infrastructure to compete in world markets, but they are cutting back on infrastructure spending. We need a well-educated population to grow the economy, but they are cutting back on education.
    Cutting is clearly not the path to more people having better-paying jobs: Congress takes aim at jobs program,

    Becky Thompson of Sioux Falls turns 72 next month, and she is quietly grateful that she has a job working in the computer lab at Experience Works, an agency that helps older workers find employment.
    . . . But now she and other older workers are worried that all this – the training, the support, the camaraderie – will disappear in the next round of budget cuts.
    That’s because more than 60 percent of Experience Works’ budget comes from the Senior Community Service Employment Program, the only federally funded job training program for low-income seniors – and one of many programs targeted for reduction in the Republican spending bill that passed the House last month.

    Economists, Analysts, Everyone Says Budget Cuts Will Kill Growth
    Isaiah Poole summed it up in, More Than 300 Economists Repudiate Right-Wing “So Be It” Economics,

    Today the Economic Policy Institute and the Center for American Progress jointly released a statement signed by nearly 320 economists from around the country, including Nobel Prize winners Kenneth Arrow and Eric Maskin, former Vice Chairman of the Board of Governors of the Federal Reserve System Alan Blinder, and former Chair of the President’s Council of Economic Advisers and Director of the National Economic Council Laura Tyson.
    That comes a day after Mark Zandi of Moody’s Analytics released a report that estimated the House budget cuts would result in a loss of 700,000 jobs by 2012. That finding evoked a “so what?” from House Majority Leader Eric Cantor that was remarkably in line with the dismissive “so be it” comment that House Speaker John Boehner made earlier in February in response to concerns that budget cuts would result in job losses.

    If people had good jobs that paid well the deficit would be a heck of a lot lower than it is. People would be paying taxes instead of collecting unemployment. Cutting the things that create jobs is certainly not a path to creating jobs. England is learning this, our Congress is not.
    No Job Creation Programs At All
    Republicans have held the Congress for months but have not introduced a single job-creation program. In GOP Bait And Switch On Jobs, Anne Thompson lays it out,
    ,

    The House Republicans have developed a track record of bait and switch when it comes to their approach to job creation.
    Last week, House Republican leadership released a PowerPoint by Congressman Paul Ryan that they are using to educate the Republican Caucus on their top policy priorities. Ryan laid out the “Jobs Deficit” as the number one challenge facing America in his very first slide. Yet he failed to focus on jobs until the very last slide, which reads: “Keep taxes low; spur job creation and growth.” Not quite the robust plan we need to put millions of Americans back to work.

    Is There At Least A Secret Plan?
    Is appears — and this kook “study” confirms — there is no real plan for jobs. But is there at least a secret plan in operation?
    Secret plan? When they said that cutting taxes increases revenue they knew it wouldn’t — they had a hidden agenda. They knew better than to actually believe that cutting taxes would actually increase revenue to fund the government. They said so. The resulting deficits were the agenda. The plan was to “cut their allowance” and “starve the beastto create a debt crisis, then demand that government cut back the things it does to protect and empower We, the People.
    What is the agenda behind this job-destruction agenda? If there is a secret agenda behind destroying so many American jobs — and the ability to create new jobs that pay well — then what is it? They can’t be crazy enough to destroy the economy just to increase their 2012 electoral odds, can they? On the other hand, no one has ever finished the sentence, “Republicans aren’t crazy enough to …” without being proven wrong.
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    “Gut Or Shut” — Is America Ready?

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
    Republicans are saying they are going to either gut the government or shut it down. They mean it. It’s gut or shut, and they are not going to allow a third choice. This is not just posturing and they are not likely to engage in bipartisan bargaining. Their rhetoric has painted them into a corner with their base. We should take them at their word and prepare.
    On TV Sunday Lindsey Graham, a supposedly “centrist” US senator said he is willing to let the United States default on its Treasury obligations, saying,

    “I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long term debt obligations starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits. On the spending side I’m not going to vote for a debt ceiling increase unless we go back to 2008 spending levels, cutting discretionary spending…”

    Sen. Graham said the threat to destroy the economy unless Social Security is cut is “a great opportunity to change the course of America’s future.” Yet there is little widespread shock or outrage or calls for his resignation from the so-called “responsible” leaders among the D.C. elites. So it appears that willingness to destroy the economy of the country and the world to score an ideological victory has moved into the realm of acceptability. This tells us how much our politics has changed in recent years.
    One after another Republicans — the very people responsible for the massive debt — have been outlining their “conditions” for a vote to prevent default and allow the country’s economy to survive. They maintain they are not going to pass a budget that does not gut the government, and if the Senate and President do not go along with this they will just let the government default. They say they “can’t want” for a “bloodbath.” Senator Jim DeMint, for example, said today,

    “We need to have a showdown at this point that we are not going to increase our debt ceiling anymore,” he said. “We are going to cut things necessary to stay within the current levels, which is over $14 trillion. This needs to be a big showdown.”

    This “gut or shut” threat is so far beyond anything the country has experienced that the country really has no idea what is about to happen in the next few months. But this is just the next step in a 30-year plan and we should understand it that way.
    The Huge Debt Was The Plan
    The huge deficit and accumulated debt was intentional. It was the plan all along: cut taxes on the rich, grow the debt into an emergency and then use that emergency to force cuts in things our government does for We, the People. Do not forget this and do not let the country forget this, either. This is not an emergency, it is just the next step in their plan.
    Making this very point, President George W Bush called his deficits “incredibly positive news” because the resulting debt would force a debt crisis. And he left behind a $1.4 trillion deficit in his last budget year to clinch the deal. Now Republicans are gloating that they can gut or shut the government with the debt ceiling vote. This is not an emergency, it is just the next step in their plan.
    It Is About WHAT To Cut
    The huge debt was caused by tax cuts for the rich and military spending increases. But those are not what the Republicans are talking about fixing in the name of cutting the deficit. Far from it.
    When they say they are “cutting spending” what they mean is they are cutting the things that government does for US – for We, the People. They are keeping the things that government does for the wealthiest 1% – the ones who got the bailouts and tax cuts. They are not talking about cutting the military even though we spend more than all other countries combined. They are not talking about cutting subsidies for big corporations – especially not for oil and coal companies. They are not talking about restoring top tax rates to where they were when the economy (more or less) worked.
    They are talking about gutting the things that we do for each other and that protect us from the power of predatory corporate wealth – consumer protections, worker safety, environmental protections, health care, retirement, and the rest.
    The Social Security Trap
    It appears form Senator Graham’s remarks, and others, that the #1 target is Social Security. While conservatives have had the program in their sights since its inception, today’s focus on Social Security is also a trap aimed at the 2012 Presidential election.
    Republican leadership are trying to trap President Obama into agreeing to cut Social Security and then use this to drive him from office. They plan to campaign that Obama cut Social Security, just as they successfully campaigned that “Democrats cut $500 billion from Medicare” in the 2010 midterms. In the 2010 campaign anonymous-donor organizations aligned with the Republican Party ran ad after ad after ad after ad in district after district after district claiming “Democrats cut $500 billion from Medicare.” Seniors abandoned the Democratic party, and Republicans swept the election.
    The Public Does Not Want Social Security Touched
    This Social Security trap is one pillar of the 2012 plan, and the White House and party leadership should pay attention. Poll after poll after poll warn that the public does not want Social Security touched. Even Tea Party rank-and-file do not want Social Security touched.
    Wall Street’s Central Role
    Wall Street is also at risk in this game, and should pressure the Republicans to stop threatening to let the country default on its debts. Economist Dean Baker, in Saving Social Security: Stopping Obama’s Next Bad Deal, points out that Wall Street would be destroyed by a debt default, while the rest of us wold survive. For this reason the President should call the bluff.

    The prospect of the U.S. government defaulting on its debt creates the sort of end of the world scenario in which Congress rushed to pass the TARP in 2008. Back then … luminaries told members of Congress and the public that we would have a second Great Depression if the Wall Street banks were not immediately bailed out, no questions asked. And the money flowed.
    The prospect of defaulting on the debt will create a similar outbreak of shrill warnings of disaster. … privatization of Social Security and Medicare and major cuts and/or elimination of other important programs. The argument from the administration will be that they have no choice.
    [...] not only Democrats, but also independents and even Tea Party Republicans overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public.
    … the day after the default, the country would still have the same capital stock and infrastructure, the same skilled labor force and the same technical knowledge as it did the day before the default.
    One thing that would not be around the day after a default is Wall Street. The default would wipe out the value the assets of the Wall Street banks…
    For this reason, the threat of a default is a gun pointed most directly at Wall Street. Given the power of Wall Street over Congress, is inconceivable that they would ever let the Republicans pull the trigger.
    This means that if President Obama is prepared to take the right and popular position of supporting Social Security and Medicare, he will win. This is both good policy and great politics.

    Guy Saperstein, in The Looming Debt Ceiling Shakedown, writes that the President should call the bluff,

    The Republicans are running a total bluff. They don’t want the government to default on government bonds anymore than Obama. It would cause economic chaos, cost Wall Street trillions and lead to a civil war within the Republican Party between the Wall Street Wing and the Lunatic [aka, Tea Party] Wing …

    Wall Street is supporting the Republicans because they want a weaker, more controllable government — and a piece of that Social Security money. They are convinced that President Obama will cave and agree to gut government and Social Security. But, as Baker points out, this game of default threats puts Wall Street at greater risk than the rest of us. President Obama should use that to draw a line in the sand: He won’t sign anything other than a clean debt ceiling bill. Gutting Social Security should never be discussed as a budget-cutting strategy, and especially not at the barrel of a gun. Back off, send a clean bill, and then let’s talk about all the corporate sacred cows that members of both political parties have been protecting, that long ago needed to be weaned from the federal teat, as well as the unnecessary spending on defense and wasteful tax giveaways. And at the same time, let’s embrace the common sense that only in a growing economy that pays its workers well can we ever hope to repair the damage done by reckless conservative policies.
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