Tag Archives: budget

Fix Budget Problems With Medicare-For-All

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(Post title changed…)

Nate Silver has a much-discussed post today in the NY Times, What Is Driving Growth in Government Spending?. Silver goes over the numbers and writes,

To clarify: all of the major categories of government spending have been increasing relative to inflation. But essentially all of the increase in spending relative to economic growth, and the potential tax base, has come from entitlement programs, and about half of that has come from health care entitlements specifically.

The growth in health care expenditures, for better or worse, is not just a government problem: private spending on health care is increasing at broadly the same rates and is eating up a larger and larger share of economic activity. It’s an immensely complicated problem, but the arithmetic is simple: if we can’t slow the rate of growth in health care expenditures, we’ll either have to raise taxes, cut other government spending or continue to run huge deficits. Or we could hope to grow our way out of the problem, but health care expenditures may be impeding private-sector growth as well.

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Deficit Trouble – Right Here In River City!

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River City faces a terrible deficit, and if we don’t cut spending on the things We, the People do for each other right now, there will be trouble. We gotta do some austerity! We gotta eat that seed corn. We gotta stop taxing the 1% and stop paying for things the 99% need!
It’s a con as old as the hills. Whip up the people with fear, and then offer them the ready-made “solution.” In his post, Ya Got Trouble — A fresh look at an old con, Tom Sullivan nails it with a scene from The Music Man. For those not familiar with The Music Man, here is the lead-up: “River City ain’t in any trouble.” “Well, we’re going to have to create some.” Then the Republican Congressman Music Man goes out and whips the town into a state. He does it to sell them. (The following is from a local production, which YouTube allowed to be embedded here. To see the clip from the movie click here.)
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From Sullivan’s post:

Trouble with a capital “T”
And that rhymes with “P”
and that stands for pool!

In one, short speech — building intensity as he goes — Professor Harold Hill gathers a crowd of onlookers and rattles off a litany of big city sins “the right kinda parents” worry about corrupting their children and their small town: sloth, drinking, gambling, being “stuck-up,” smoking, loose morals, and indecent pop culture. In a fevered crescendo, Hill warns parents of “shameless music • That’ll grab your son, your daughter • With the arms of a jungle animal instink!”

Sullivan explains the con:

Hill presses every button the people of River City, Iowa have to press, plus appeals to patriotism and God to create a city-wide moral crisis that four minutes earlier the townspeople didn’t know they had. Sound familiar?
Now strike pool. Insert contraception, voter fraud, death panels, or a half dozen other right-wing bogey men and the grifter’s pitch works the same. Today, Harold Hill would be working for Fox News or Americans for Prosperity. He’d be running American Crossroads, and making a lot more money.

This con has been perfected in recent years as The Shock Doctrine, forcing entire countries into debt or other crisis, then stepping in to plunder and privatize their resources, like what is happening to Greece right now.
Whipping Up Deficit Hysteria
This “con game” is what is happening to our own country as well, with the whipped-up terrification over deficits. The Reagan plan was cut taxes and increase military spending to force the country into debt, and then use the debt to force privatization of public resources into the hands of a few. George ‘W’ Bush said after cutting taxes on the rich and raising military spending that the resulting transformation of Clinton’s budget surplus into huge budget deficits was “incredibly positive news” because it would force us into near-bankruptcy. Yes, he said that.
But the solution offered — the current Republican budget that phases out Medicare and guts our government — doesn’t even cut the deficit! The Republican “austerity” budget starts with $10 trillion in tax cuts for the 1%! Then it guts most of what We, the People do for each other.
Don’t be fooled, it is just one more conservative con game.
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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Republican Budget For Billionaires

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The new Republican budget (called the “Ryan Budget” by DC insiders) reflects current electoral reality: billionaires and corporations now finance candidates, and we get government of, by and for billionaires and corporations. The rest of us no longer matter, except as “the help” and, at least to the extent we haven’t been entirely fleeced, a flock to harvest. This budget starts with $10 trillion in tax cuts — mostly for the rich. After adding $10 trillion to the deficits Republicans then claim that severe cuts are necessary to “fight deficits.” Right. Details below.
Keep in mind where we are starting from: The way our economy and tax system is already structured, the top 1% received 93% of income gains from recovery. As Mitt Romney’s tax returns demonstrated, those at the very top — whose income comes as checks generated by the money they already have — already pay much lower tax rates than those of us who work for a living.
Shock Doctrine
“Nothing is more important in the face of a war than cutting taxes. — Republican Majority Leader Tom Delay, 2003”
After passing tax cut after tax cut, and military spending increase after military spending increase, and starting war after war, Republican borrowing has added up. So now Republicans terrify the public, telling them that budget deficits will lead to the destruction of the country — and soon. After a decade of screaming “9/11,” “9/11,” noun verb “9/11,” they now scream “deficit, deficit, deficit.” Then with the public suitably stirred up and terrified they offer “solutions” they say are necessary to cut the scary deficit (that they caused, for this purpose).
Behind a blizzard of fog and mirrors, the new Republican budget completes the ongoing shift of our government and our economy away from “we are in this together” democracy to a “you are on your own” system that is entirely for the benefit of a few at the top.
Cuts Taxes For The 1%
The smoke and mirrors: they claim this budget is necessary to reduce deficits, but it doesn’t even pretend to. Instead it starts by cutting taxes on the rich and their corporations by another $4.6 trillion while making permanent the Bush tax cuts, costing another $5.6 trillion. It gives a $187,000 tax cut To every millionaire!
Cuts Jobs
Ethan Pollack at the Economic Policy Institute describes how Ryan’s budget cuts would cost jobs — 4.1 million of them:

Paul Ryan’s latest budget doesn’t just fail to address job creation, itaggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using astandard macroeconomic model that is consistent with that used byprivate- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.*

Cuts Everything Government Does For Regular People
This budget starts with $10 trillion in tax cuts for the wealthy! After handing billionaires and their corporations trillions, increasing deficits by an additional $10 trillion, the Republican budget then cuts the things government does for the rest of us: Medicare, Medicaid, food assistance and public investments (mostly infrastructure and education), and pretends it is necessary because of deficits. (It increases funding for military contractors.)
What is cut? The following is from an analysis by the Office of Democratic Whip Steny H. Hoyer:
A Choice of Two Futures: A Look at How the Republican Budget Ends Medicare, Destroys Jobs, Benefits the Wealthy
Ending the Medicare guarantee and raising health care costs for seniors:

  • Ends the guarantee of health security and shifts higher costs onto seniors and the disabled over time.
  • Increases seniors’ health care costs just like last year’s budget – which drove up costs by over $6,000 per year, according to CBO.
  • Reopens the prescription drug donut hole, increasing seniors’ drug costs by up to $44 billion through 2020, including $2.2 billion in 2012 alone, according to HHS.
  • Increases seniors’ out-of-pocket costs for preventative care and annual checkups by over $110 million in 2012 alone, according to HHS.
  • 54-year-olds would have to save more money just to cover health care costs – an analysis of last year’s budget showed they would have to save an additional $182,000, according to the Center for Economic and Policy Research.

Cutting taxes for the wealthiest Americans at the expense of working families:

  • Provides millionaires an average tax cut of $150,000.
  • Reduces revenue by $4.6 trillion on top of the $5.4 trillion cost of permanently extending all of the Bush tax cuts and other expiring provisions, according to the Tax Policy Center.
  • May force working families to pay higher effective tax rates to cover some of the cost of this $4.6 trillion tax cut for the wealthy by eliminating deductions.

Turning Medicaid into a block grant that jeopardizes access to affordable health and nursing home care for seniors and the disabled:

  • Cuts a total of $1.7 trillion from Medicaid over the next decade, and according to CBO, is on track to cut the program by 75% by 2050. According to the Urban Institute, block granting the Medicaid program could result in between 14 million and 27 million people losing coverage. An additional 17 million people, who gained Medicaid and CHIP coverage through health care reform according to the CBO, would also lose that coverage as a result of repealing the Affordable Care Act.

Making it harder for Americans to receive Social Security benefits:

  • Increases backlogs that delay people from getting benefits that they are due and could leave up to 90,000 people with disabilities waiting for a decision in 2013 and leave 300,000 more people with disabilities waiting for a decision each year over the next decade.

Weakening our ability to out-educate competitors and build a competitive workforce:

  • Reduces Pell Grants by more than $1,000 for 9.6 million students in 2014 and could eliminate Pell Grants for over one million students over the next decade.
  • Kicks 60,000 low-income children out of the Head Start program in 2013 and 200,000 low-income children out of the program each year over the next decade.
  • Cuts Title I funding, which could result in nearly 11,000 teachers and aides losing their jobs in 2013 and nearly 38,000 teachers and aides losing their jobs each year over the next decade.
  • Cuts funding for Individuals with Disabilities Education Act, which could result in 7,800 special education teachers, aides, and other staff serving children with disabilities losing their jobs in 2013, and 27,000 teachers, aides, and staff losing their jobs each year over the next decade.
  • Reduces work-study funding, meaning almost 37,000 students could lose access to college work-study opportunities in 2013, and more than 166,000 students could be affected each year over the next decade.

Slashing assistance to low-income families:

  • Cuts the WIC program (Special Supplemental Nutrition Assistance Program for Women, Infants, and Children), kicking 700,000 pregnant or postpartum women, infants, and children off the WIC program and leaving another 100,000 without access to critical foods necessary for healthy child development in 2013. Each year over the next decade, the cuts would kick 1.8 million women, infants, and children off the WIC program and leave another 100,000 without access to critical foods.
  • Converts SNAP into a block grant beginning in 2016, which could jeopardize access to food assistance for millions of Americans.
  • Cuts HUD’s rental assistance programs, resulting in over 116,000 fewer low-income families housed through the Housing Choice Voucher program in 2013 and 400,000 fewer low-income families housed through the program each year over the next decade.
  • Risks permanent loss of affordable units that serve 1.1 million Americans.

Repealing patient protections and putting insurance companies – not American families – in control of health care:

  • Allows insurers to once again be allowed to discriminate against up to 17 million children with pre-existing conditions.
  • Subjects 105 million Americans once more to arbitrary lifetime caps on their health insurance.
  • Increases 54 million Americans’ out-of-pocket costs for preventative care.
  • Puts up to 15 million Americans who are sick or injured at risk of being dropped from their private insurance because of a simple mistake on an application.
  • Eliminates tax credits for up to four million small businesses, which are already providing more affordable care to two million workers. [Figures provided by HHS and the Treasury Department]

Weakening national security:

  • Cuts COPS hiring grants, which could result in 75 fewer local police hires and 6,200 fewer bullet proof vests for state and local law enforcement personnel in 2013, and 285 fewer local police hires and 23,000 fewer vests each year over the next decade.
  • Cuts Department of Justice (DOJ) funding, resulting in 1,311 fewer federal agents to combat violent crime, pursue financial crimes, secure the border, and ensure national security in 2013, and 4,587 fewer agents each year over the next decade.
  • Cuts DOJ funding resulting in 948 fewer prison guards to maintain safe and secure federal prisons in 2013, and 3,319 fewer prison guards each year over the next decade.
  • Reduces Department of Homeland Security funding for preparedness efforts of state and local governments, which could mean 100 firefighters and 80 emergency managers not being hired or laid off in 2013, and 400 firefighters and 300 emergency managers not being hired or laid off each year over the next decade.

Undermining American competitiveness by cutting investments in science, medical research, space and technology:

  • Cuts funding for biomedical research by NIH, meaning 500 fewer grants NIH could award in a cutting-edge field in 2013 and 1,600 fewer grants each year for the next decade, limiting research that could lead to new cures for diseases.
  • Cuts funding for NSF, which could result in NSF making up to 1,100 fewer competitive research and education grants supporting over 13,000 researchers, students, and teachers in 2013 and 4,000 fewer grants supporting almost 48,000 researchers, students, and teachers each year over the next decade.
  • Cuts NASA funding and puts jobs at risk by forcing the agency to terminate major programs and potentially close major facilities.

Threatening our clean energy future:

  • Cuts investments in the Department of Energy Office of Energy Efficiency and Renewable Energy and its applied research program, known as ARPA-E, that was established specifically to conduct energy research that industry by itself cannot support but where success would provide dramatic benefits for the nation.
  • Eliminates jobs by setting back efforts to put a million electric vehicles on the road, retrofit residential homes, and make commercial buildings more efficient.
  • Fails to boost all energy sources by eliminating tax support for renewable energy generation and the domestic jobs created by those energy projects.
  • Unless otherwise noted, all figures from OMB.

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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Cuts and Consequences – How Budget Cuts Hurt The Economy

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Is smaller government really better for the economy? Conservatives chant that taxes and government “take money out of the economy” and we need to “cut and grow,” meaning if government spending is cut way back the economy will grow as a result. Europe’s conservatives are also forcing cuts in the things their governments do for regular people, claiming “austerity” will bring “confidence” that grows their economies. How is this experiment working out? What are we learning about the effect on the larger economy when government is cut?
What Does Government Do?
Almost everything the government does is because it needs to be done. We need roads, bridges, schools & colleges, dams, courts, police & fire departments, water management, etc. (We can discuss the need for military spending another time.)
These are all needed and contribute to the functioning of the economy. So if government is cut back and doesn’t do something that is needed, then how does it get done? Or does it just not get done? Either way, the real question we should be asking is what is the effect on the larger economy when our government cuts back on or stops doing needed things? If you save the “government” a bit of money but cost the economy a lot of money, are you saving money? Or are cuts in government really just shifting and even increasing the costs in the larger economy of doing these things?
Who Is Our Government For?
In the United States, our Constitution says that government is supposed to be of, by and for We, the People. The country was established after the colonists rebelled against the aristocracy of England — a few people who had all of the wealth and power and would not let the colonists have a say in how things were run and who would benefit. So they fought the Revolutionary War and established a country where “We, the People” all have an equal say, and to “promote the general welfare.” In other words, a country that aspires to be of, by and for the good of all of us.
So cutting back on government means cutting back on We, the People doing things for the good of all of us. It means cutting back on the things we have a say over. It means relinquishing the wealth and power that we hold in common to … well, just where does our common wealth and power go if our government is cut back?
Medicare, For Example
Republicans say we need to cut back on what the government spends on Medicare. But if you cut Medicare the health problems of elderly people and the larger problem of fast-rising health care costs in the larger economy don’t disappear. In fact, both problems just get worse.
The “Ryan Budget” that Congressional Republicans voted to approve actually converts Medicare into a program that gives seniors a voucher that pays for part of a private medical insurance policy that seniors have to shop for. The Center for Economic and Policy Research (CEPR), in Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan, took a look at that plan and explains what happens to the cost of health care. Summary: it shifts the costs to us, except each of us ends up paying as much as seven times as much as the same care costs under Medicare. 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 Republican plan] 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 …

Repeat, the Republican plan to cut Medicare would cost the larger economy seven times as much as it cuts government spending.
Social Security, For Example
Conservatives have been trying to cut or gut Social Security for decades. While this might mean government has to pay out less of what is owed to seniors, such cuts would have a negative effect on the larger economy.
Social Security allows working people to retire with at least a minimal income. If this is cut many could not retire for many more years (if ever), which would increase the unemployment rate because their jobs would not open up. The same is true as the retirement age is increased – fewer job openings. If it is cut, the spending (on cat food) at local grocery stores and other necessities is reduced by the same amount. And the effect on children of retirees is increased, if they contribute to make up the difference.
This is why cutting Social Security or raising the retirement age only shifts costs onto the larger economy, dragging it down (and cruelly hurting our elderly).
Cutting Disease Control, For Example
One of the clearest examples of the way government helps us all, rich and poor, is the government’s Center for Disease Control (CDC). One of the jobs of the CDC is to help prevent the spread of infectious diseases. If an epidemic is spreading and killing people it doesn’t matter if those people are rich or poor. And if a serious outbreak spreads this can damage the economy as people are too sick to, or decide not to show up for work. So of course cutting back the budget of the CDC could cause damage to the economy in any given year and is certain to cause damage eventually. (The CDC budget was cut back 11% last year.)
Budget Cuts Hurt The Economy
The above are only a few examples.
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 or the need for those things, they just shift those costs onto the larger economy. But because these shifts attack the economy-of-scale, transparency, integrity and public-good management that government provides, they almost always increase the costs and harms to the larger economy.

  • As government health care is cut (or not provided in the first place) each of us must take on those costs on our own, and as demonstrated, pay up to seven times what the same care would/could have cost.
  • As infrastructure maintenance and modernization is cut, our economy becomes less competitive, unemployment increases and our wages and spending power fall.
  • As spending on education is cut, our costs of educating ourselves and our kids increase. College costs soar. And the overall education level of our people will decrease, making our country less competitive in the world.
  • As environmental regulation and enforcement is cut the costs of the resulting health problems and cleanups increase and our quality-of-life will decrease.
  • As enforcement of labor laws is cut, our wages and protections fall.
  • As etc. is cut, the costs of etc. are shifted to the larger economy, and the total costs of accomplishing etc. actually increase.

As budgets are cut, the costs are increased and shifted to the larger economy.
Austerity In Europe
Several countries in Europe are severely cutting budgets. The result is that the economies in those countries are slowing. Reuters: Euro zone’s slump in late 2011 points to recession.

A collapse in household spending, exports and manufacturing sucked the life out of the euro zone’s economy in the final months of 2011, the EU said on Tuesday, showing the scope of the downturn that looks set to become a fully fledged recession.
… The European Commission forecasts a recession of the same magnitude this year. That would be the euro zone’s second contraction in just three years as the bloc’s debt crisis drags on a region that generates around 16 percent of the world’s economic output.
[. . .] The battle between austerity and growth was already evident in the fourth quarter. Euro zone government expenditure fell 0.2 percent, while industry contracted 2 percent and imports were down 1.2 percent, making for some of the worst readings since the world was dragged into the 2008/2009 financial crisis.

The austerity experiment is making the case: cutting government budgets just shifts costs and hurts the larger economy.
Who Benefits From Cuts?
Governments dance with the ones that brung ’em. Whoever controls government is naturally going to direct government to benefit them – and only them. We-the-People democracies do things for We, the People; plutocracies do things for plutocrats. So when, as now, plutocrats are running government, you will get a government that only does things that benefit plutocrats. And when We, the People were running government, we did things that benefit We, the People — all of us.
The plutocrats now demanding government budget cuts obviously understand that this will result in slowing economies, but don’t care — they are already fabulously wealthy. What they want is reduced taxes and increased power. They say that cuts will bring growth, in order to persuade people to accept cuts. Blocking governments from providing things that don’t directly benefit them and only them is a means to that end. And cutting government cuts government’s ability to reign them in.
What We, the People Want
When We, the People are running government we insist that government increases overall prosperity. We demand laws and regulations that bring us good wages, benefits and safe working conditions. We demand good public schools & colleges, parks, safety and opportunities for our smaller businesses to fairly compete. We insist on a clean environment, consumer protections, regulations on business behavior, rules against monopolies and (after learning the hard way) rules that keep banks from taking risks that threaten the economy. And we want controls and limits on the use of wealth and power by the 1%ers.
Plutocrats — the 1%ers — of course see all of these protections of regular people as hindering their power and ability to make as much for themselves as they can grab. Plutocrats just don’t see how public parks benefit them. They just don’t see why they should have to pay for public schools. What good do public schools do them, today? Plutocrats don’t see why it should be anyone else’s problem if old people don’t have health care — health care for seniors certainly isn’t their problem.
They explain that things for anyone other than themselves and their interests just “wastes money.” Things for regular people are not their problem. And when plutocrats run government, it isn’t their problem.
The fact is a public park “costs money.” Schools and infrastructure are just more “government spending.” Things like that just “redistribute income” because taxes on the income of plutocrats is used to build that park or school that anyone can use. The basic message of the plutocrat is, “Why should I pay for anything that benefits you?”
You and I might argue that this kind of austerity, cutting schools, Medicare, infrastructure, etc. slows the larger economy, hurting the plutocrats, too. But that doesn’t hurt the ones who are already rich, which is the definition of plutocrat. It puts more in their pockets, today, by lowering their taxes. They want out of taxes and they don’t want government (We, the People) interfering with their power.
What We, The People Need
Democracies where We, the People make decisions demand things that are good for regular people and their small businesses: pensions, health care, modernized infrastructure, good schools & colleges, child care, regulations on the behavior of giant corporations… This is why strong democracies have proven to be more prosperous for regular people and for longer 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. This is why so many regular working people in our country were so much more prosperous in the decades before the plutocratic 1%-favoring policies of Reagan steered us toward plutocracy.
Understand what is going on here. Demands for budget cuts and austerity are really about shifting from democracy to a system where regular people — the 99% — are on their own, up against the wealthy and powerful. This is about shifting from a system where regular people can be prosperous together, to a system where a few — the 1% — have all the wealth and power.
We, the People need democracy restored. We need to be in charge again, before the economy can improve.
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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Austeridiocy: Budget Cuts Take Money Out Of The Economy

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“The patient is sicker so we have to apply more leeches.” Countries that are trying to fix deficits with spending cuts are finding out that taking money out of their economies by cutting government is slowing their economies. Duh! Imagine that! So instead of cutting deficits the resulting slowdowns are making their deficits worse as tax revenues drop and joblessness goes up. So what are they proposing? More “austerity” spending cuts. I call them “austeridiots.”
It Didn’t Work So Do It More
See if you can find the logical flaw in this AP news report: French growth sputters to a halt in 2nd quarter,

The French government was put under further pressure to cut deeper into spending after figures Friday showed growth in Europe’s second biggest economy ground to a halt in the spring, in another sign that the global economy is facing rising recessionary threats.
With the worse-than-expected French growth figures suggesting a possible budget shortfall this year, government ministers may have to find additional savings…

Right, the cuts are slowing the economy, which means the deficits are worse, so they “have to find additional savings.” Cutting government – taking money out of the economy – slowed their economy, so they think they’ll solve the problem by taking more money out of their economy. Austeridiocy.
Austeridiocy Here, Too

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Ten Years Ago We Were Paying Off The Nation’s Debt. But Then We Elected Obama.

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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…
Something Happened

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Dems Should Vote For Clean Debt Limit Bill

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The House is voting on a “clean” debt ceiling bill today — a bill to raise the debt ceiling without any “hostage-taking” conditions. This is the right thing to do for the country and every Democrat should vote for this. Voting for a clean bill will draw the contrast for the public between those who are doing the right thing, and those willing to hold the world’s economy hostage to a make-the-rich-richer plutocracy agenda. Democrats who do not vote for a clean bill should lose committee assignments, parking places, even bathroom keys.
The Debt Ceiling
The country’s “debt ceiling” has been reached. This means that the government’s authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. The Congress must extend this limit, or the government will default on its bonds.
If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.
WHY We Have This Debt
In 1981 the Reagan administration dramatically changed the course of the country. They defunded government by passing huge tax cuts for the rich and massively increasing military spending, and began cutting back on the things We, the People (government) do for each other. The country cut back on maintaining — never mind modernizing — our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.
One major result of these changes, of course, was the huge budget deficits that accumulated into today’s massive debt. This was the plan from the start, to “starve the beast” by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government’s protections for the people, unleashing plutocracy.
Hostage-Taking Enabled: The Tax Cut Extension
This debate over the debt ceiling and hostage-taking follows the recent extension of the Bush tax cuts — another product of hostage-taking. At the end of the last Congress unemployment benefits for the millions of unemployed were running out. Republicans — having filibustered much of the legislation of the prior two years — held the extension of benefits “hostage” saying they would not let it pass unless the deficit-creating Bush tax cuts were extended.
Enough Democrats caved and passed an extension of the Bush tax cuts. This validated hostage-taking as a successful tactic while making the deficit much worse, setting the stage for today’s debt-ceiling fight.
The Vote Is A Trick
Today’s vote has been scheduled by the Republican leadership as a trap, trying to get some Democrats to vote with Republicans to support their hostage-taking agenda and create the appearance of bipartisan support for plutocracy. If the Republican position gets the support of enough Democratic members, Republicans can then demand deep cuts in Medicare and other programs that help people and hold corporate power in check, in exchange for their votes to allow the world’s economy to continue to operate.
From TPM: First Debt Limit Vote Today As GOP Looks To Divide Dems,

The vote is intended to expose fault lines within the Democratic caucus, with Republicans counting on sizable number of Democrats to side with them and bolster their case that Democrats need to agree to deep spending cuts as a condition to raising the debt limit.

Vote For A Clean Debt-Ceiling Bill
Voting for a clean bill stops government-by-hostage-in its tracks. Voting for a clean bill saves the world’s economy. Voting for a clean bill fights the plutocracy agenda. Voting for a clean bill saves Medicare, Social Security and the things We, the People do for each other. Voting for a clean bill is the right thing to do and doing the right thing is the right thing politically.
Call your member of Congress NOW and demand a vote for a clean debt-ceiling bill.

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 Hearing Citizen Backlash At Town Halls – Actions You Can Take

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Note – see action updates below.
Members of Congress are holding local town hall meetings now and into next week, and Republicans are hearing from constituents angry that they voted to privatize Medicare to pay for even more tax cuts for the rich and corporations.
Think Progress has the story: More Republican Congressmen Face Town Hall Backlash Over Tax Breaks For Wealthy And Medicare Privatization,

Earlier this week, Rep. Paul Ryan (R-WI) held town halls across his district to defend his budget’s plan to end Medicare and extend tax cuts for the wealthy. During a stop in Milton, WI Ryan’s constituents made their feelings apparent, booing down the … congressman when he defended tax breaks for the rich… Yesterday, Rep. Lou Barletta (R-PA) received the same hostile reception from his constituents for voting to end Medicare.
This town hall backlash is now spreading to other districts across the country. As Huffington Post reports, freshmen Reps. Robert Dold (R-IL) and Charlie Bass (R-NH) got an earful from their constituents for voting in favor of the Republican budget this month. During a Buffalo Grove, IL town hall, Dold caught a lot of flack for supporting corporate tax breaks and voting to end Medicare: …

Please go read the rest. And click this link to find out if your member of Congress is holding a local town hall meeting this weekend or next week!
And if you can get video or audio recordings of citizen reaction to the Republican votes please post them to YouTube and let me know!!
Here is Ryan being boo’ed by constituents:

Here is Barletta:

Update — ACTIONS
Click this link to find out if your member of Congress is holding a town hall meeting this weekend or next week, and attend! Ask questions and demand answers
MoveOn has an action page where you can locate your representative’s local office, asking you to drop by. Note that this is different from attending a town hall meeting. Here is what MoveOn is saying on the page:

Drop by and tell your Representative:

Eliminating Medicare is unacceptable!

Congressional Republicans just voted to eliminate Medicare for anyone under 55. It’s time the Republicans hear from us, loud and clear: voting to end Medicare is completely unacceptable and we will hold you accountable.
No need to RSVP. Just follow the instructions below and drop by with other MoveOn members at 12 noon on Thursday, or any other time during business hours this week.

Click through for the rest at the MoveOn page
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 Fight: Why Are Republicans Forcing A Shutdown?

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
Why are Republicans forcing a government shutdown and doing other things aimed at blowing up the economy? The question isn’t “are they,” it is why are they? Their election strategy for 2010 was to obstruct everything and keep the economy from creating jobs, and then blame Democrats. It worked. So now they’re doing it even more. But is that the whole plan?
In every instance Republicans are obstructing the very things that can help the economy recover and provide the jobs people need. Everything they do is aimed at making things worse. It is hard to understand their actions except as a systematic attempt to blow up the economy.

  • They are blocking agreement on a budget to keep the government going.
  • They are terrifying the credit markets by threatening to block an increase in the country’s debt limit.
  • They are refusing assistance to states, forcing the states to lay off hundreds of thousands of teachers, etc.
  • They are fighting to roll back every regulation that relates to banking and finance.
  • They are killing high-speed rail and solar and wind projects.
  • They are blocking renewable energy standards and other policies that trigger investment and jobs.
  • They are blocking needed stimulus programs that help recovery.
  • They are blocking unemployment benefit extensions.

When confronted they offer ridiculous explanations which are really only cover for the actions, so they can claim to have a reason beyond destruction. But this is only to provide cover and keep the press and public from calling them out for what they are.
Cutting Jobs Creates Jobs?
Speaking of ridiculous explanations, they say they are cutting jobs in order to create jobs. Seriously. Digby today, in Flooding The Market, caught this about the Republican plan,

For example, the [Republican economic report] paper predicts that cutting the number of public employees would send highly skilled workers job hunting in the private sector, which in turn would lead to lower labor costs and increased employment. But “lowering labor costs” is economist-speak for lowering wages — does the GOP want to be in the position of advocating for lower wages for voters who work in the private sector?

Got that? Throw enough people out of work and wages go down, which they say leads to more employment. That’s their plan?
One advantage of throwing so many people out of work is that they will work for very little just to eat and feed their families. This is great if you own a business (and don’t care about people) — not so great if you depend on American consumers to purchase what you sell. But that’s a problem for later, after you’ve broken the unions and cut your labor costs. We know this is one part of their strategy because they said so.
A Grander Strategy Than Killing The Economy To Win In 2012?
Are they killing the economy in order to win the next election? Or is this part of an even grander strategy?
So is there a bigger plan at work here? Step back from the day-to-day for a minute, and away from the fog of propaganda and smoke and sand thrown in our eyes to keep us from seeing what is really happening. For decades conservatives have said government is bad, in the way, intrusive holding business back, bureaucratic, inefficient, etc. You have heard the litany, over and over and over.
So What IS Their Plan?
It seems conservatives are always running one strategy or another, always working on a plan. Speaking of grand strategies and plans, watch this from Lee Camp:


They Hate Government
If you read their websites and magazines you know that they hate government and talk about ways to get rid of it. They have said they just want government to go away and have been running strategies to get it small enough that they can drown it in a bathtub. If you are a Republican who doesn’t think destroying government is the best approach you are called a RINO and shunned.
They don’t talk about governing, they talk about killing government, and when they get power they don’t govern they destroy government. They appoint industry lobbyists to agencies that are supposed to oversee their own industries. They appoint polluters to the agencies that are supposed to protect us from pollution. And they appoint people who have called for getting government out of areas like education, medical care, etc. to head up and dismantle those departments.
They talk about destroying government, not governing. So what makes the DC opinion elite think they want to govern now?
Destroy Government Then Blame Government For The Consequences?
Trickling up from conservative underground lately are more and more arguments that government itself is responsible for the crumbling infrastructure, loss of economic competitiveness. The unspoken answer – so far – is that we need to get rid of government itself to get rid of these problems.
Last Week in Detroit’s Liberal Nightmare, the Heritage Foundation paves the way for what I think we will see coming from conservatives,

Detroit, once known as “the great arsenal of democracy,” has made headlines of late for its notorious fall from grace. … And while the Motor City suffers unemployment from a decimated automotive industry, it suffers crime, high taxes, poor city services, plummeting home values, and a public education system in shambles with a $327 million budget deficit and a 19 percent dropout rate. Is it any wonder people are leaving in droves?

Just today, in Voting With Their Feet, Thomas Sowell blames government for other areas where the census shows are are losing population,

Both whites and blacks are leaving California, the poster state for the liberal, welfare-state and nanny-state philosophy.
Whites are also fleeing the big northeastern liberal, welfare states like Massachusetts, New York, New Jersey and Pennsylvania, as well as the same kinds of states in the midwest, such as Michigan, Ohio and Illinois.

And unspoken in all of their anti-government arguments is just what will replace government, namely the big, powerful corporations and the wealthy few behind them.
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The Lesson Of The 2010 Election Was Jobs, Not Cuts

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

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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 beast” to 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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Reagan Revolution Home To Roost – America Drowning In Debt

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

“Watch what we do, not what we say.” (Famous Republican advice.)
The Reagan Revolution was first and foremost about cutting the taxes paid by the rich and corporations. Now, almost 30 years later, the United States of America is drowning in debt. And that is exactly what they wanted to happen.

The Plan

There were the reasons for the tax cuts Reagan said, and there was the plan Reagan had. Reagan SAID that there was this thing called the “Laugher Curve” that he said proved cutting taxes would actually increase government revenue. But what they were saying was a smokescreen, something to tell the rubes. Increasing government revenue was the last thing Reagan and his cohorts wanted. They knew (and have since said so) cutting taxes would lead to terrible deficits. They called this a “strategic deficit.” This was the plan.

Bankrupting our government (We, the People) was the plan and today we can see that it was what they did. They didn’t want revenue to increase because the idea was to “starve the beast.” Reagan called it “cutting their allowance.”
The plan was that by cutting the funding for government, government would have to cut back on what it does: regulating business, protecting regular people against powerful interests, building infrastructure, educating kids, taking care of the poor and elderly. With government (We, the People) out of the way businesses could be unleashed and really start to make money. And for those who could afford to pay, private companies would take over those other functions. That was called “privatization.”

Infrastructure? We had plenty of infrastructure back then – grab the cash now and worry about that later. (It’s later now.)

So taxes were cut. And immediately the budget went into deficit and the government started borrowing. The debt started to grow. That was the plan. They said so.

Conservatives well understood that the public was not behind their plan. This was why it was explained as a way to increase government revenue. “Watch what we do, not what we say” is about tricking the public – deceive people by telling them you are doing one thing while really doing another. They knew that if the public came to understand their plan they would all be voted out of office. The idea was to force the other party to make the cuts.

Every time someone did try to cut the public outcry was enormous. So they just kept borrowing, intentionally trying to make the debt get so bad that eventually the government would be faced with bankruptcy.

Clinton, for a time, foiled their plans. In 1993 there was a hard-fought battle to raise taxes at the top by just a small amount. Every Republican voted against it. The public was saturated with lie after lie about how this would destroy the economy. Of course, the economy boomed in the 1990s following the Clinton tax increases and by the end of Clinton’s term the government was paying off debt so quickly that Alan Greenspan called for Bush II to again cut taxes on the rich, saying it was dangerous to pay off the government debt – yes, the same Alan Greenspan who now says we have to get rid of Social Security to pay off debt. The plan.

Bush called restoration of deficits “incredibly positive news”

Seven months after taking office, George W. Bush learned that his budgets had already erased the previous administration’s huge surplus — that was paying off our country’s debt at a rapid rate — and had instead forced the country to start borrowing heavily again. Bush said the huge deficit was “Incredibly positive news” because it will create “a fiscal straitjacket for Congress.” That’s right, massive deficits were “incredibly positive news.” The plan.

Deficit hawks today

Now we’re experiencing part two of The Plan: use the debt as a reason to cut the things government does for We, the People. The deficit cutters insist that the government should cease investment in infrastructure, educating kids, taking care of the poor and elderly and protecting regular people against powerful interests. First and foremost they want to cut Social Security. They blocked a reasonable health care plan in the name of “less spending.” They fight every effort to stimulate the economy and create jobs so that We, the People can get out of this unemployment emergency. (High unemployment puts tremendous wage pressure on the remaining workers.)

Are we going to fall for it? Are we going to walk right into part two of The Plan? Or are we going to restore the tax base, which is the lifeblood of democracy. Taxes on the wealthy and big corporations are what brings the ability of We, the People to control our own destiny instead of yielding always to the powerful interests.

This is the choice we are faced with. The “deficit hawks” are offering only The Plan. So far restoring the tax base back to where it was is off the table, not even to be discussed. Are we going to allow that? Or are We, the People going to fight back and demand that democracy be restored?
Previously: Reagan Revolution Home To Roost: America Is Crumbling and Finance, Mine, Oil & Debt Disasters: THIS Is Deregulation