It’s (Still) The Economic Paradigm, Stupid!

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

Yesterday I wrote that the President may have sacrificed his long-term vision on trade and economic/industrial policy to day-to-day concerns and politics. The tax-cut deal is another indicator that a big-picture vision has been sacrificed. But however much smoke gets thrown up to mask the real problem it’s still all about the economic paradigm.

There is still a lot of forward-thinking work to do on our economy. The big picture is, of course, jobs. It is balance of trade, a coherent and especially comprehensive economic/industrial policy, education, infrastructure. But even more than those, fixing the real economic mess is about finding a sustainable and equitable formula, and changing the equations of who gets what for what. It is a bigger picture.

But now we are totally caught in the day-to-day fights over tax cuts for the rich, giving forever more and more to the big financial institutions, letting the big corporations get away with more and more while delivering less and less and making us work harder and harder. It seems that all we do now is just react to corporate/conservative assaults. We are trying to fight off attacks on everything, everything and on every, every front.

Instead of job-creation programs we are fighting over just giving unemployed people the same unemployment benefits that American workers have always gotten. Instead of doing something about climate change we are fighting to keep the big oil companies from killing rail projects and green energy initiatives.

The corporate/conservatives are using their “Overton Window” tactics to push the discourse ever further to the right and away from addressing the real problems. (I don’t mean Glenn Beck’s book. More info here and here.) And we are now living the result.

Step back, remember how we got here. Thirty years ago the corporate conservatives launched their assault on We, the People. They elected Ronald Reagan, who declared that “We, the People are the problem,” and that decision-making by We the People (government) had gotten too big. Now the Reagan Revolution has come home to roost and we are living in the conservative dream. The rich ever richer with more and more power, the rest of us are “the help,” just trying to get by, and our minds are under continual assault from a sophisticated propaganda barrage designed to keep us from doing something about it.

The basics have not changed. The fundamental changes we need are still needed. The corporate conservatives have all the money in the world and are so well organized but they can’t fight off reality forever. The planet really is warming and the climate really is changing and it really is because of carbon. The conservative economic model really does not work and is draining the people and the planet for the benefit of just a few.

In my first post for the Campaign for America’s Future, It’s The Economic Paradigm, Stupid!, I wrote,

It is not just the economy out of whack. The business practices that brought us here — overextraction, overextension, overleveraging, overconsumption — have also whacked the planet’s resources. The fisheries are increasingly depleted. The aquifers are increasingly drained. The forests are increasingly logged. The landfills are increasingly full. And, of course, the planet is increasingly hotter.

Our economic system has also taken a toll on the people. Too many hours at a stressful workplace with too little sleep have burned many of us out. Our thinking and identity are about our jobs, not our spirit and character. Our values are devoted to markets with many of us placing making money over loving and caring for families and others. And there’s no time for that stuff anyway. We have become consumers instead of citizens and humans. Decades of falling wages, decreasing savings and increasing debt have tapped us out. Consumption has used us up. And we’re fed up.

The problems are still the problems, only more so. And we’re still fed up, only more so.
(*Please click the links)

(*Please click the links)

Previous: It’s The Economic Paradigm, Stupid!
Overton Windows links: Here, here and here.
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Tax Cuts Now Force Terrible Budget Cuts Later

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Deal or No Deal?’s Bill Scher and Dave Johnson make their cases for and against the preliminary tax cut deal between the President and Republican leaders. Dave Johnson’s case against the deal is below. Click here for Bill Scher’s case for the deal.
The White House has announced a deal on extending tax cuts for the rich, in exchange for restoring unemployment benefit extensions for those out of work more than 26 weeks. They are also going to cut the Social Security tax and give more tax breaks to businesses. I think this is a mistake.

Continue reading

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

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

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
As an election strategy conservatives blocked or watered down everything they could that might help the economy, hoping voters would blame the President’s party for job losses. Tomorrow we will learn if this strategy succeeded. But Wednesday can we start doing things to help the economy and the country again? Please?
Candidates on both sides are running ads asking for fixes to trade with China. Chinese manufacturers are starting to fight, claiming that (now jobless) Americans will have to pay more for goods if they have to adjust their currency toward market rates. But Chinese manufacturers are doing just fine, according to recent surveys, because their government is doing everything it can to stimulate their economy, their manufacturing and their jobs.
Where’s our government?
Today’s Progressive Breakfast hilites two stories:

Chinese manufacturers, complaining that their government has adjusted currency too much, tell Americans Christmas will be more expensive. W. Post: “‘If the renminbi keeps appreciating, our prices have no more room to drop,’ said Cai Qin Liang, 38, who has been in the business making Christmas ornaments and handicrafts for more than a decade. ‘We can just stop making these Christmas accessories, but foreigners still celebrate the Christmas holiday and need these things.’ It is small manufacturers such as these that the Chinese government says it is worried about as it resists calls for a larger and more rapid appreciation of the currency.”
Yet Chinese manufacturing doing just fine, buoyed by stimulus. AP: “Chinese manufacturing accelerated in October with spending on infrastructure projects spurring a jump in new equipment orders even as export demand remained subdued, surveys showed Monday.”

What kinds of things is the Chinese government doing to help its manufacturers? Earlier this year I wrote, in Lessons From China’s Stimulus

China’s stimulus brought them through the economic crisis, even as they lost some exports because of the slowdown. They made the leap into alternative energy technology, spent $100 billion just for high-speed rail, and showed the world how fiscal stimulus works. Their growth rate is currently 13%. Ours is currently … nowhere near 13%.
. . . So their stimulus totaled about 14% of their GDP. Our own stimulus was $862 billion in a $14 trillion economy, or about 6%. The differences between the priorities of the two plans are clear when seen on charts.
From a year ago: China’s Stimulus Package: A Breakdown of Spending: (please click through for more)
. . . China focused on investment in public infrastructure, which leads to future economic growth. We are mired in conservative ideology so we focused on tax cuts, which do little more than increase our debt.
. . . Quick lessons:
– China spent serious money, quickly. It worked.
– China focused on infrastructure. It worked.
– China has a national economic/man manufacturing strategy and invests in R&D and developing strategically important industries. We don’t.
– Don’t cut taxes, it only causes massive yearly deficits and accumulated debt.

Frank Sobatka describes one of the main reasons for the problem:

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Vote For Jobs

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

Should you vote? Does your vote matter? If you care about jobs, your vote really, really matters this time. If the Tea Party wave does manage to take over the House and/or Senate the plans they have announced will mean a jobs crisis far beyond anything we are seeing now.
Republicans say that cutting government spending to reduce deficits (and cutting taxes on the rich to bring them back) will create jobs by lowering interest rates. While they refuse to say what they will cut, they pledge to cut a lot. What will be the effect of cuts on jobs? Lowering interest rates is not going to happen because interest rates are already zero, but the cuts will clearly cost jobs. We know this for sure because in the last two years state budget cuts caused layoffs that simply overwhelmed job creation elsewhere — so many people were laid off by states that jobs created by the stimulus and private sector just didn’t register. So we can expect more of this.
Will their tax cuts for the rich create jobs? Bush cut taxes for the rich, and his two terms created a net of … wait for it … zero jobs. So don’t hold your breath waiting for jobs to come out of that plan. Businesses need customers, not tax cuts.
So what about ideas to get customers to businesses? Don’t get your hopes up there, either. Republicans want to get rid of any remaining stimulus designed to take up the slack in demand in our economy.
How about jobs from maintaining and modernizing our infrastructure — and the long-term job creation that comes from making our economy more competitive? Republicans call maintaining and modernizing the infrastructure “government spending” and since government spending is bad, ain’t gonna happen.
What about doing something about companies that send jobs out of the country? Well just a few weeks ago Democrats voted to repeal the tax break that encourages job outsourcing. Every single Republican voted to keep it. So don’t get your hopes up there, either.
So what about working with the other side to come up with new ways to create jobs? Republicans blocked everything for the last two years — something like 420 bills were filibustered, plus many nominees to agencies and the courts. So expect more stalemate – which means no action on jobs, unemployment or anything else.
If You Care About Jobs
If you care about jobs you had best get out and vote. The change that is coming if you don’t vote is not the change you want.
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Eight False Things The Public “Knows” Prior To Election Day

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

There are a number things the public “knows” as we head into the election that are just false. If people elect leaders based on false information, the things those leaders do in office will not be what the public expects or needs.
Here are eight of the biggest myths that are out there:

1) President Obama tripled the deficit.

Reality: Bush’s last budget had a $1.416 trillion deficit. Obama’s first budget reduced that to $1.29 trillion.
2) President Obama raised taxes, which hurt the economy.

Reality: Obama cut taxes. 40% of the “stimulus” was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been.

3) President Obama bailed out the banks.

Reality: While many people conflate the “stimulus” with the bank bailouts, the bank bailouts were requested by President Bush and his Treasury Secretary, former Goldman Sachs CEO Henry Paulson. (Paulson also wanted the bailouts to be “non-reviewable by any court or any agency.”) The bailouts passed and began before the 2008 election of President Obama.

4) The stimulus didn’t work.

Reality: The stimulus worked, but was not enough. In fact, according to the Congressional Budget Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.

5) Businesses will hire if they get tax cuts.

Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire. Businesses want customers, not tax cuts.

6) Health care reform costs $1 trillion.

Reality: The health care reform reduces government deficits by $138 billion.

7) Social Security is a Ponzi scheme, is “going broke,” people live longer, fewer workers per retiree, etc.

Reality: Social Security has run a surplus since it began, has a trust fund in the trillions, is completely sound for at least 25 more years and cannot legally borrow so cannot contribute to the deficit (compare that to the military budget!) Life expectancy is only longer because fewer babies die; people who reach 65 live about the same number of years as they used to.

8) Government spending takes money out of the economy.

Reality: Government is We, the People and the money it spends is on We, the People. Many people do not know that it is government that builds the roads, airports, ports, courts, schools and other things that are the soil in which business thrives. Many people think that all government spending is on “welfare” and “foreign aid” when that is only a small part of the government’s budget.

This stuff really matters.

If the public votes in a new Congress because a majority of voters think this one tripled the deficit, and as a result the new people follow the policies that actually tripled the deficit, the country could go broke.

If the public votes in a new Congress that rejects the idea of helping to create demand in the economy because they think it didn’t work, then the new Congress could do things that cause a depression.

If the public votes in a new Congress because they think the health care reform will increase the deficit when it is actually projected to reduce the deficit, then the new Congress could repeal health care reform and thereby make the deficit worse. And on it goes.

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How Tax Cuts For The Rich Made Corporations Predatory

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

America used to have a top tax rate of around 90%. This meant that after a person earned a lot of money in a year, additional income beyond that amount was taxed at the higher rate. Back then government worked a lot better. We didn’t have deficits, the schools and public universities were better, there were enough police and firefighters, the courts were not overwhelmed, even the IRS was better. Most important, our country’s infrastructure — the soil in which business thrives — was kept in good shape so the country was more competitive and livable. And all of this meant that the very people who were paying those top rates benefited because their businesses did better.

Government and the services it provides aren’t all that has changed for the worse since we cut tax rates for the very, very rich. It caused the relationship between big businesses and the rest of us to deteriorate, too. Here is why.

When top tax rates were high it took time to build up a fortune. So businesses had to depend on the health of the communities around them to help keep them growing over a long period. They had to plan and act long-term. Businesspeople had to carefully build up solid businesses that served their customers and kept them coming back. And they had to train and hold on to employees because their experience was needed.

After the top tax rates were lowered people could reap huge fortunes in a hurry. This changed everything. It created incentives for people to do things that we can now see have harmed our country. Quick-buck schemes for short-term profit became the business model. It made more sense to run up high debt, cut for very high short-term profit or just sell off businesses rather than invest and build build carefully for the long term. Cost-cutting was the name of the game. So cutting R&D and training and quality and support, closing factories and outsourcing jobs made more sense than investing in new equipment and training & retaining a good workforce. Managers who held to the old-fashioned serve-the-customer and support-the-community model faced the private equity buyout — where companies become buy-and-sell commodities with workers, customers and the country as costs.

So big corporations became predatory, caring little for customers, communities and country because executives planned to get rich quick and leave soon. Businesses’ interdependence with the community went out the window. It made more sense to fleece the community with quick-buck schemes than to rely on its well-being over a long period of time. Short-thinking business models that cut employees to the bone and took advantage of customers began to make sense. Then, as communities fell apart, those few who benefited from such business practices could just fly away in their private jets or sail away in their yachts. The greater community was no longer of any use to them except as a crop to be harvested.

Bring Back The 90% Top Tax Rate

So it is time to change the formula. It’s time to bring back the 90% top tax rates. We can use the money to start paying off our debt. It is time to rein in our businesses and make them part of our communities again. The way to do this is to continue to help people become wealthy – just a bit more slowly, please, and bring us all along.

Bring back the top tax rates of America’s golden years so we can all enjoy the benefits of our economy again.
A top rate of 90%, phased in as income gets higher and higher, wouldn’t raise taxes at all for most of the people in the country but it would mean that the top 15 hedge fund managers would only take home an average of about $100 million a year. While bringing in only $100 million a year might be a terrible hardship for them, it brings up an important question for the rest of us: how much is enough? Especially when a few having so much means that the rest of us have much, much less and live in communities that are much, much worse off than they used to be.

See also Tax Cuts Are Theft.
And see Tax Cuts Are Theft: An Amplification by Sara Robinson.
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How Tax Brackets Work — $250,001 Will Pay Five Cents More Tax

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
This discussion of whether to get rid of the Bush tax cuts for the rich has been a learning experience. I have been listening on the radio and reading the comments at blogs. The main thing I am concluding is that people just do not understand how tax brackets work.
When people talk about raising taxes on people “who make more than” a certain income they really mean that they are going to raise it ONLY on the income that comes in after a certain income is received, not on the person’t entire income.
Here is what I mean. Suppose they say they are going to raise taxes on incomes above $250K. People seem to think that this means if you earn $250K plus a dollar, that you owe an additional tax on the entire $250K. This is not correct. I actually hear stories about people who give away money, and do other things to avoid going “into a higher bracket” because they think they have to pay additional taxes on their entire earnings.
Here is how it really works. What happens is that the first $250K is taxed just like it has been, but anything that is made over $250K — and only the amount over $250K — is then taxed at the higher rate. The tax on the amount below $250K is not changed.
Example: Suppose the tax increase is 5% on income over $250K. This means that a person who reports income of $250K plus one dollar will be taxed an additional 5 cents. FIVE CENTS!
Yes, that’s right, if it is 5% they are talking about then it means a 5 cent tax increase on people who make $250,001.
Let me repeat that. If you make $250,001, and they raise taxes 5% on people who make over $250K, then you will have to pay 5 cents more. Five cents. F.I.V.E. C.E.N.T.S. That is what people are so upset about. 5 cents.
If it is 5% a person making $260K might pay an additional $500. That’s right, the proposed tax increase is approx. $42 a month on people making $260K, about $21,600 a month. Forty-four dollars out of twenty-one thousand. THIS is what all the right-wingers are screaming about. THIS is what all the Ayn Rand cultists are threatening to stop working over. THAT is how tax brackets work.

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Incredibly Obvious Things In Front Of Our Faces

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Conservative economic policies just don’t work and it’s incredibly obvious right in front of our faces. Knowing that obvious things are right in front of our faces and knowing that conservatives really, really don’t want us to see those things, it’s instructive (and sometimes entertaining except for the tragic consequences) to watch how conservatives try to distract us.
For example, look at this chart:
July Jobs Report
The stimulus worked but was not enough. It is obvious. It is right in front of our faces.
So what do they do to distract us? LOOK OVER THERE!!! A MOSQUE!!! BURN A KORAN!!!
Next up, tax cuts. President Clinton raised taxes on the rich and conservatives claimed it would destroy the economy. But after the tax increases the economy was great, millions of jobs were created and the huge Reagan/Bush I budget deficits (caused by tax cuts and military spending increases) turned into surpluses. Here are some charts that show deficits and jobs following Clinton’s tax increases. First compare job growth after Clinton’s tax increases and Bush’s tax cuts:
It’s obvious. Right in front of our faces. Tax increases did not slow the economy or cost jobs, and tax cuts did not create jobs. This next chart shows how the budget went from deficit to surplus after Clinton’s tax increases and then, after ‘W’s tax cuts, to massive, huge, incredible deficits:
It’s obvious, right in front of our faces. So how do they distract from that? Well, they just lie!
Conservatives explain the huge 2009 $1.4 trillion Bush budget deficit by just saying it’s Obama’s. Have you heard that “Obama tripled the deficit”? Look at “Obama’s Deficit in Pictures” from Heritage Foundation, claiming Obama has “quadrupled the deficit with his stimulus package”.
The problem is that these distractions and deceptions can lead the public to support really bad policies. If conservatives — after nearly destroying the world’s economy the last time they had power — are able to convince people that we should cut taxes again, or stop efforts to restore demand to the economy, then they could make things get even worse than they did last time.
Don’t be distracted. Keep seeing the obvious.

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Social Security – A Divide Between DC And The Rest Of Us

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The DC-elite think that “the responsible thing to do” is to cut Social Security benefits. The public who they are supposed to represent overwhelmingly thinks that Social Security is one of the few remaining lifelines and must not be cut. The public strongly favors investing in rebuilding the country’s infrastructure, returning to taxation of the wealthy and corporations — especially Wall Street, and cutting back the enormous military budget as the key ways to address the budget deficit.
This morning the results of a new poll were announced, and politicians would do well to take note. The poll, A Research Study On Investment and Deficit Reduction, By Greenberg Quinlan Rosner Research, Democracy Corps, Campaign for Amerca’s Future is described as follows:

Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation, according to a poll by Greenberg Quinlan Rosner commissioned by the Campaign for America’s Future and Democracy Corps, with support from; the American Federation of State, County and Municipal Employees, and the Service Employees International Union.

I’l like to bring that first sentence out and repeat it so that it is clear: Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation.
And again: Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation.
There is a brief slide show of the results here, a comprehensive Powerpoint presentation is online here, and full poll results are available here.
Key findings of the poll:

  • 68 percent said they would oppose making major spending cuts in Social Security and Medicare to reduce the deficit, while 28 percent said they would favor cutting those programs. That included 61 percent of Republicans and 56 percent of independents.
  • Strong majorities support progressive solutions for addressing the federal deficit: 63 percent back lifting the Social Security cap on incomes higher than $107,000 a year; 64 percent would favor eliminating tax breaks for corporations that outsource jobs; 62 percent would support a tax on excessive Wall Street bank profits.
  • Strong majorities also oppose common conservative proposals for addressing the budget deficit: 65 percent oppose raising the Social Security retirement age to 70; 65 percent oppose replacing Medicare with a private sector voucher; 62 percent oppose a 3 percent federal sales tax; 60 percent oppose raising the Medicare age from 65 to 67.
  • More people support a message that embraces the need for both investments in our future and reduce the deficit over time (52 percent) than a message that only stresses cuts in spending (42 percent). Also, almost equal percentages of respondents were favorable toward “a plan to invest in new industries and rebuild the country over the next five years” (60 percent) and “a plan to dramatically reduce the deficit over five years” (61 percent).
  • 62 percent of respondents support more federal to states once they understand that the aid comes in the context of states laying off teachers, first responders and other essential workers due to the recession. That includes 55 percent of independents and 48 percent of Republicans.
  • 60 percent of those surveyed responded positively to an economic message that said that “we have a budget deficit, but … we also have a massive public investment deficit” that requires us to “rebuild the infrastructure that is vital to our economy” and to the economic growth that will “generate revenues to help pay down the budget deficit.” This message tests better than any other progressive message on investment as well as more conservative messages focused on spending cuts.
  • Click here for more on the poll.
    Click here to see which members of Congress have signed the “Hands Off Social Security!” pledge
    Click here to sign the petition: Hands Off Social Security!
    Click here to visit Strengthen Social Security … don’t cut it.
    One more time: Politicians will face major voter backlash if they advocate cuts in Social Security benefits or choose deficit reduction over job creation.
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    Unpaved: Out-Of-Cash America Undoing Its Infrastructure

    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

    In case you missed Rachel Maddow last night, she had a segment on American cities and counties actually undoing their infrastructure because they are out of money. She listed city after city across the country that is shutting off its streetlights, turning paved roads into gravel, shutting down bus systems, shutting down schools, firing police, and other steps to save money.
    To me, the most striking comment was, “Somewhere in China it is entirely possible that a businessperson sat down for a ride on a 200mph state-of-the-art levitating bullet train, and cracked open the Wall Street Journal, and read about how in American we’ve decided we can’t afford paved roads anymore.”
    Is that how we want the rest of the world to think of us? Do we really want to become a broken-down, corrupt, uncompetitive 3rd-world country? Well, that is where we are going. We can see the infrastructure crumbling around us.
    Meanwhile, as the country falls further and further behind the rest of the world the government is unable to function. In Washington the conservative Senate minority continues to use the filibuster — over 110 times since President Obama took office — to block every effort to do anything about our problems. They block helping states keep teachers. They block helping the unemployed. They block job-creation efforts. They block everything government does for We, the People.
    And at the same time as they resist spending to help the country, publicly pleading that the deficit and debt are too high, the conservatives also resist doing the things that will fix the problem: raise tax rates on the wealthy, and cut the huge, massive, bloated, more than $1 trillion per year military and military-related budget.
    They think a worsening economy with no solutions will demoralize enough voters that they can turn out their “base’ and win in November. Destroy the economy and the country to get votes. Great. You’ll make marvelous leaders — oh wait, been there, that’s how we got into this mess.
    Yes, we know how we got here. Everyone this knows that the deficits and debt come from tax cuts for the wealthy, and huge increases in military spending. AConservatives know. They said their plan was to cut taxes and thereby “starve the beast” as a way to cut government. Their reason to cut government is to make way for the only available alternative: so that the large corporations and the wealthy can rule instead. Cutting government means cutting the controls and protections that We, the People have been able to build up over the years, ensuring that we get a slice of the pie. This has been going on for thousands, even ten thousand years, as the broad masses of regular people work to assert their rights over whatever wealthy and powerful group has seized the reigns of power and is trying to grab everything for themselves as fast as they can.
    Look where this cynical strategy is taking the whole country! We are not only not maintaining and modernizing our infrastructure, we are falling into 3rd-world status. This can’t even help the wealthy and the big corporations they control. The conservatives still have to live here even if this scheme does bring them control. They will still have to live with fewer police, fewer teachers, fewer streetlights, unpaved roads, crumbling factories, and an ever-less-competitive economy.
    Will it be worth it?
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    Tax Cuts Are Theft

    Update: see Cuts Are Theft: An Amplification by Sara Robinson.

    Conservatives like to say that taxes are theft. In fact it is tax cuts that are theft because they break a long-standing contract.

    The American Social Contract: We, the People built our democracy and the empowerment and protections it bestows. We built the infrastructure, schools and all of the public structures, laws, courts, monetary system, etc. that enable enterprise to prosper. That prosperity is the bounty of our democracy and by contract it is supposed to be shared and reinvested. That is the contract. Our system enables some people to become wealthy but all of us are supposed to benefit from this system. Why else would We, the People have set up this system, if not for the benefit of We, the People?

    The American Social Contract is supposed to work like this:


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

    We fought hard to develop this system and it worked for us. We, the People fought and built our government to empower and protect us providing social services for the general welfare. We, through our government built up infrastructure and public structures like courts, laws, schools, roads, bridges. That investment creates the conditions that enable commerce to prosper – the bounty of democracy. In return we ask those who benefit most from the enterprise we enabled to share the return on our investment with all of us – through good wages, benefits and taxes.

    But the “Reagan Revolution” broke the contract. Since Reagan the system is working like this:


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

    This is the Reagan Revolution home to roost: the social contract is broken. Instead of providing good wages and benefits and paying taxes to provide for the general welfare and reinvestment in infrastructure and public structures, the bounty of our democracy is being diverted to a wealthy few.

    We, the People built this country’s prosperity and this built wealth. We reinvested that wealth, building the world’s most competitive economy. Now a few people are gaming the system and breaking the formula, taking for themselves vast riches, leaving the rest of us to clean up the mess.

    We must recognize and understand these tax cuts for what they are. They are a broken contract. These tax cuts for the wealthy are theft. And we must recognize the Reagan Revolution for what it has cost us. Our democracy has been corrupted and our political system has been captured. A wealthy few are taking all of the benefits of our efforts for themselves. The lack of investment in infrastructure, courts, schools and other public structures is making our country less competitive in the world. The Reagan Revolution is stealing our future.

    Other posts in the Reagan Revolution Home To Roost series:

    Reagan Revolution Home To Roost — In Charts
    Reagan Revolution Home To Roost: America Drowning In Debt
    Reagan Revolution Home To Roost: America Is Crumbling
    Finance, Mine, Oil & Debt Disasters: THIS Is Deregulation

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