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What Planet Are Deficit Hawks Living on?
To read the papers and watch TV news during the past week, you would think that the most dire problem afflicting Americans was the federal deficit in 2020 or 2030.
But for most people, the crisis right now is lost income, lost jobs, lost homes.
And the recommendations of the two co-chairs of the fiscal commission would make the prolonged stagnation worse, by commencing belt-tightening less than a year from now, at the beginning is fiscal year 2012 (October 2011) when most economic forecasts say unemployment will still be around ten percent.
The economy is on the brink of a period of prolonged deflation. With the Obama stimulus of February 2009 already starting to peter out, state budgets in free fall, home foreclosures proceeding at the rate of several hundred thousand a month, and job creation too low to cut the unemployment rate, the outlook is for endless slump -- unless we get more public investment, not less.
The Fed's policy of resorting to the printing press and buying up Treasury bonds to keep interest rates low is having only limited effect. Housing prices, after rebounding very slightly, are falling again.
Yet even the mainstream liberal press buys this nonsense. The New York Times, which had been somewhat skeptical, ran an editorial on November 10 mostly buying the deficit hawk story. The report of the commission chairs, according to the Times:
frankly acknowledges what most politicians are too cowardly to admit -- that deficit reduction will require shared sacrifice.It lays out sensible principles, prominent among them that deficit reduction should start gradually, beginning in 2012, to avoid disrupting the fragile economic recovery. It also affirms the need to protect the most vulnerable Americans and to invest in education, infrastructure and research and development.
Then it does what any successful deficit reduction plan must do: It puts everything on the table, including tax reform to raise revenue and cuts in spending on health care and defense. It even dares to mention the need to find significant savings in Social Security, Medicare and other mandatory programs.
This is mostly nonsense. The sacrifices in the proposed list of measures are not shared. More than two-thirds of the proposed savings are on the spending side. Repealing the Bush tax cuts, costing $4 trillion over a decade, are not on the list at all. And there is no mention of taxing financial speculation, hedge funds, or anything else that would hit the very well to do. Politicians who resist this economic perversity are not cowards. They are heroes.
While the panel may affirm rhetorically the need for social investment, it is domestic spending that takes the biggest hit. Social Security, which is in surplus for the next 27 years, is on the chopping block and does not belong here at all. America needs more retirement security, not less.
Sunday's Times compounded the sin, in front page piece of the News in Review section by economics writer David Leonhardt, inviting the reader to fix the deficit projected in the year 2030!
Why 2030? "That's the year when boomers start to weigh heavily on the budget, and it's the latest year for which experts have estimated budget costs," according to Leonhardt.
Huh? The oldest boomers turn 65 next year -- not in two decades. And the projected budget deficit in 2030 will be far more influenced by whether the economy recovers any time soon than by what cuts are imagined for 20 years in the future.
What's insidious about articles like this is that they take the premise of the deficit hawks for granted -- that the projected deficit rather than the prolonged slump is the top economic challenge.
Instead of that exercise, how about one where readers explore choices on how to get a recovery going. How to resolve the foreclosure mess? What kind of social investment to put into 21st century infrastructure? How to create jobs and get wages growing again?
If you want to get Social Security well into the black for the indefinite future, the easiest way is to restore wage growth -- since Social Security is financed by taxes on wages (which are capped so that the wealthy pay a pittance.)
What pushed Social Security (very slightly) into the red is the fact that all the income gains have gone to the top. The chairmen's draft report, with its rhetoric of equal sacrifice, gets 92% of proposed Social Security savings from cutting benefits, and just 8 percent from increasing the income ceiling on payroll taxes. Some sharing.
These people do live on another planet -- Planet Wall Street. Erskine Bowles, the Democratic co-chair, has spent most of his life as an investment banker. He began at Morgan Stanley, and now serves on its board, where he collects a fee of $335,000 a year for attending a few annual meetings. That's more than 99 percent of Americans earn for working full time.
No wonder the man is so glib about tightening other people's belts. And that's the Democratic chair.
I recently debated David Walker on CNN.
Walker, who headed Pete Peterson's billion dollar foundation that was created to promote austerity, and is now a Peterson grantee, is very coy about professing concern for the poor. His strategy is to combine devastating cuts in social outlays generally with token increases for the poorest. As I told Walker, just because a policy inflicts pain and is politically unpopular, it isn't necessarily good policy.
In the segment before mine, commentators agreed with each other that the deficit was large because politicians didn't have the courage to set aside partisan differences. But the deficit is large because of the recession itself, the Bush tax cuts, and the costs of two wars. The entire Bowles-Simpson exercise would cut less money from the projected ten-year deficit than the cost of the Bush tax cuts.
The whole austerity crusade is the work of Wall Street and of politicians who want a high-minded excuse to bash government, or who mistakenly think that the Democrats got their clocks cleaned because voters fretted about deficits. The American Prospect recently published a definitive article by two eminent political scientists, Chris Howard and Richard Valelly, titled "Deficit-Attention Disorder," demonstrating that voters are not mainly upset about deficits, but about the continuing economic calamity. The voters are way ahead of the kind of elites that populate this commission.
If the deficit-hawks get their way, that economic calamity will only deepen, and produce a deeper political setback for the Obama administration.
President Obama, who bequeathed this commission, has been encouraging its members to "set aside their partisan differences" and agree on a plan -- as if reducing the deficit had anything to do with the real challenge, namely getting a recovery going.
The best hope, in truth, is that divisions will cripple the commission, that other leaders will start turning to the real issues of economic recovery, and that President Obama will stop listening to the austerity mongers. For more detailed rebuttal to the deficit hawks, see the new website, ourfiscalsecurity.org.
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92 Comments so far
Show AllWell, all mainstream news outlets are on board with deficit reduction, and federal reduction in outlays. I had the good fortune that my accounting degree required extensive study in economics, both micro- and macro-economic policy, and am aghast that such ignorant pallatives are regarded seriously. Remember Herbert Hoover? He's the guy that wanted to contract federal outlays when the economy was crashing, and it brought us 10 years of severe economic hardship, only to be relieved by WWII.
I'd suggest that there are parties of influence in government who are positioning the US to fight a major, manpower-intense war in 10 to 12 years. If enough jobs are eliminated, and the economic pain severe enough, a "job" in the armed services becomes an attractive proposition--we see that now in impovershed inner-city and rural communities. When job losses become more widespread, the military will get higher quality military recruites from the former middle-class families. A perfect strategy for ramping up manpower--more fodder, more leaders. 10 to 12 years should give this strategy enough time to work.
So, this should be viewed as an issue of military/foreign policy concern, not just an economic concern.
No war is needed. A big "reserve army of the unemployed" drives wages down, stock prices up, and maked the rich even richer.
To see the future of the US, it is sufficient to simply study the economic history of the poorest central American nations.
The 10 to 12 year timeframe that gus suggests is way too long.
Among the university-level engineering students that I mentor the only graduates getting jobs in their field during the past two years have been the ROTC students being dispatched to Ir-Af-Pak. Four years ago the US miltary was having such a hard time finding recruits that judges were giving convicts the option of jail or enlistment. Today the US military has more enlistees than they can handle...many of them with college degrees.
The defacto draft gus is warning us about is already here.
well we're 9 years into it already - from the 9-11 beginning of the Endless War -
but you're right - prior to the bottom falling out the Armed Forces were allowing criminals and those w/out a high school diploma to join -
now they can be much more stringent in their choice of recruits......
and how much higher would the unemployment rate be if they brought the troops home?
Endless war as an employment strategy?
"well we're 9 years into it already"--fits perfectly with gus's time frame as the neocons have been using the same strategy for Iran as leading up to Iraq. And that one will become a quite larger "conflict". Fuckin brain dead American politicians and military men/women.
Military madness is killing my country.
A solitary sadness comes over me.
G. Nash
OYE
I wholeheartedly agree with the basic premise of the author that this entire debate has been driven by those who are hell bent on impoverishing the working people of this country in order to feather their own nest. I do take exception to the fact that he seems to be dismissing the effects of the federal deficit. The deficit does matter - always has. The government running a deficit basically is like a family borrowing money. As long as you are borrowing money for things that have long term benefits, for a family a house, or a college education you're probably okay - for a government deficits would be okay if you were actually investing in the country, repairing aging infrastructure, constructing high speed rail lines, upgrading our outdated electrical grid.
Contrary to what we are told we CAN have our cake and eat it too - and here's how.
- Slash defense spending by an immediate 50%
- Reinstate the Eisenhower era income tax rates
- Institute a financial transactions tax
- Reinstate the short term capital gains tax
- Institute an estate tax of 100% on everything over 10 million dollars
- Eliminate home mortgage deductions for any amount over 250 thousand dollars and on all non primary residences
- Increase the corporate income tax to 35 percent
- Eliminate all corporate tax deductions / write offs for individual employee compensation over 250 thousand dollars
Just doing the above would probably not only balance the budget but return a surplus - and we haven't cut ANYTHING effecting the working people of this country.
One can dream, eh ;)
That is some good stuff. I agree with everything, but I have one question about the Estate tax of 100%. Isn't taking 100% a little harsh? In theory it would be ideal. But just from an argumentive perspective, shouldn't it be 75-90%? Taking 100% of something is never easy to accomplish when that 100% is someone elses.
Maybe you could explain a bit? But other than that, that is some good stuff.
To bad you work on common sense and our Government and most of it's citizens do not.
In today's political environment you need to demand 100% to get 2%.
Notice how Obama repeatedly starts the discussion at 50/50 and ends up repeatedly giving the store away ?
The guy has to be the worst political negotiator in recent memory.
Many will probably say that it is all part of the neo-con/plutocratic
script all along. I beg to differ. This guy is just plain cowardly
and does not have the mettle to wait out the opposition so as to
get more for less. One can only wonder how much of our hide he's given
away in his recent Asian Arms deals tour. Not to mention what is
to follow. It's as if Obama's a creature born out of a Karl Rove dream.
I love how the right cleverly renamed the estate tax the "Death Tax", and the Dems let them do it unchallenged. Why not call it the "Silver Spoon Tax". The tax that allows children of the rich to be born with the old silver spoon in the mouth. I know when I was young that was looked at badly. Maybe that has changed but its worth trying at least.
Most Americans have been brainwashed to believe in supply-side economics and not to understand the US tax structure. They therefore believe that because workers pay taxes on wages, the wealthy have already paid taxes on the money they are passing on to heirs. In reality most of the big inheritances consist of appreciated assets that were never taxed and the heir will only be required to pay capital gains tax on the difference between the value at the time of inheritance and the value at the time of sale.
For example:
I had to pay capital gains tax on the $70,000 difference between the amount I paid in 1974 and the amount my house sold for in 2002.
My friend's mom bought a house in 1973, died in 2001 and my friend inherited the house and sold it immediately for $120,000 more than his mom paid for it. Neither his mom or he owed any capital gains tax. Based on the tax laws at the time, if his mom's estate was worth more than three million dollars he may have had to pay estate tax. If his mom waited until 2010 to die she could have left him a billion dollar estate without paying any estate tax.
Excellent post. Excellent argument for taxing inheritances, but specifically that crooked portion you just pointed out.
And your own example is why we should not let the middle class tax cuts expire. A little bit later and you would have paid no tax on that 70,000 difference.
RAY: You make the economic stuff far more simple to understand.
Based on the 2010 jubilee (for inheritance tax), makes you wonder how many "devoted" children and grandchildren might get rich Grandma's medication "accidentally" wrong to make sure their family fortunes make "the deadline." Of course if the latest presidential counterfeit extends this give-away to the rich WHILE simultaneously getting on board with the Scrooge-style Peter Peterson types to cut programs to the truly poor and needy... I can only imagine how such action will be coded into the Akashic Record, its evil and base disregard for life etched into the PERMANENT record. That knowledge, agreed upon by mystics across the ages, may prove a small comfort to the latest family made homeless; but it does substantiate the idea that this is not an unlawful universe... even if the rigors of free will, pro and con, as evidenced on a collective scale, suggest otherwise.
I am not certain that "most Americans have been brainwashed to believe in supply-side economics and not to understand the US tax structure." Most educated and successful Americans have been, yes, and they control the national political discussion. But not the invisible and voiceless lower 50% of the population. What I hear is "the rich grow richer while the poor grow poorer" and "the game is rigged" and "it is a rich man's war and a poor man's fight" and "say hello to the new boss, same as the old boss."
"- Institute an estate tax of 100% on everything over 10 million dollars. Is what the poster said. Why should someone be given more than that just because they won the human gene lottery? I had to make it though life with $0 inheritance, so I have a very hard time feeling sorry for someone who "only" gets a $10,000,000 head start in this Amerikan rat race.
If you want to get to 75-90% you had better damned well start by advocating for 100%. What it is with people that they are such terrible negotiators when dealing with management, with the wealthy, with the right wing? You never should make as your opening offer that which you would be willing to settle for. If you want "5" and the other side is offering "0" then you had better demand "10." Otherwise you will get "2.5" and in the next round "1.25" and in the next round ".75" - that is exactly what has been happening. The other side will never offer more than "0" and if we are continually meeting them half way we continually lose ground. "Reasonable" and "moderate" and "not too radical" and "realistic" and "practical" means capitulate and cower and roll-over and grovel and beg and lose.
This is an important thing to look at. Right here everyday we have a debate going on between those who wan to compromise, who caution against getting too radical, who raise the specter of "Stalin" or some nonsense, who spout all of the McCarthy red scare talking points, and those who are trying to move us to a strong and militant stance.
None of us are ever going to be appointed king of the realm. Therefore it is not up to us to come up with the perfect solutions, or systems, or plans, or technocratic ideas. Our job is to advocate for our people - the have-nots - in the strongest and most uncompromising terms. The other side isn't compromising, isn't trying to be moderate. They are aggressively and relentlessly promoting the desires of their people - the wealthiest 1% and to a lesser degree the upper 10%.
Those people here who are in the $70,000 - $250,000 annual household income levels, who are in the upper 10% - your interests long term are in siding with the bottom 50% - the households under $35,000 a year. Beware of the pressure that is forcing you to inadvertently and unwittingly defend and promote the upper 1%. They are not and never will be your friends. Securing the "middle class" starts with pulling up the bottom, not with kissing ass to, apologizing for, worrying about or compromising with the upper 1%.
That means that people must stop attacking the Left, must stop blaming the everyday people for the social and political problems, must stop resisting social criticism, and most importantly must stop compromising with the enemy - the enemy that wants to destroy us all. This requires all of us to take a long hard look at our lives, our presumed elevated status and security, our assumptions that we are the "better" people, and our foolish ideas about progressive politics and "middle class" values, and stop getting angry and defensive when those things come under criticism. That is emotionally uncomfortable, but a little bit of emotional discomfort now will spare us a world of hurt - and unimaginable nightmare - in the future.
50% off the military would mean that we would only spend 60% of what the combined rest of the world spends, depending on the accounting, which would still be 10 times what China spends. Its not as if Iran would invade and occupy us, let alone their neighbors.
And the rest of the burden would fall on those who have ample capacity to pay. Of course those who control the politicians and the media wont permit it. Its not like we are all in this together, you know.
One thing though. It would be necessary to increase spending on some other things, or the economy would probably sink. Fortunately we have a lot of public infrastructure to repair build. We also have the massive task of reducing our fossil fuel dependency, so investment is needed there too.
It would be so easy. Its not too late yet to turn from our destructive path. Empire collapse does not have to be the only option. We can stop digging our big hole and still recover from the Bush Legacy if we wanted to. The problems seem huge and insurmountable, because it would mean changing the media and the political system, but at this stage the problems are still purely political. Later on, though, when the USA is no longer the worlds richest country, there would not be such easy options available.
KrazyKatz
A 100% estate tax on any amount is simply unfair under any circumstanses.
Consider that if you want to return to Eisenhower tax rates you would need to return to Corporate tax write offs from the same period to accomplish your intent.
I would also say that you need a higher amount on mortgage deductions as $250,000 in Texas is one whole heck of a lot more than $250,000 in New York.
Why not a 40% tax rate for Corporations, no matter where the money is earned?
Your last suggestion is important. If Congress (in our dreams!) would prevent money from moving to subsidiaries in offshore havens to avoid U.S. taxes, a good chunk of the deficit would be taken care of.
Agreed. But its not just that, its money they make there that they never pay taxes on even though it benefits the corporation and its employee's.
In my view you are either an American corporation or not and if you are you should pay on 100% of your earnings no matter where they were earned just as the guy on the garbage truck does.
In 1970 corporations paid 29% of US income taxes, last year they paid 6% and in a decade they will pay 0%.
Corporations and their gunners in DC remind us that the US has some of the highest corporate tax rates. They fail to remind us that the US also has more loopholes for corporations. most of them written by corporations.
Every dollar that corporations don't pay in taxes is another dollar that you and I must cough up.
"last year they paid 6% and in a decade they will pay 0%."
HA! Thats what they think! No one notices but the Tea Party folks and the republicans seem just as steamed at these folks as we are. They seem (I stress seem) to be set on correcting the spending but also the unfair practices that are hurting us all.
"Corporations and their gunners in DC remind us that the US has some of the highest corporate tax rates. They fail to remind us that the US also has more loopholes for corporations. most of them written by corporations."
They do seem to neglect that fact don't they? Our Corporate taxes are below most countries and that is after adjusting for the extra Corporate expenses in Social Democracies. They are getting a free ride.
"Every dollar that corporations don't pay in taxes is another dollar that you and I must cough up."
It's worse than that, we are subsidizing their labor costs at the local and state level's as well.
My guess would be we might need a slight revision in our tax code? :)
KRAZY: While your suggestions make sense to anyone who cares about the citizens of America, as opposed to those ready to demonstrate obeisance for the preferences of the extreme elites... they don't get heard in mainstream media at all. What bothers me about Kuttner is both his naivete about The New York Times, and what sponsors butter that periodical's bread; and his failure to mention that these tactics are old hat. Just about every one has been out-lined by Naomi Klein in "The Shock Doctrine." Her massive research chronicles show how similar steps (always based on austerity aimed at the poor and/or workers) have been taken in places like Chile, South Africa, Poland, and Russia. Methods there perfected, now are being driven home.
Kuttner also skims over the fact that it was the same Wall Street crooks and their crooked banker/lawyer/accountant buddies that gamed the system that allowed them to skim so much off the top, while leaving the workers to pick up the tab... played like chumps.
Maybe his journalism creds rely on his pretending to see viability in the current system. Perhaps that's why his writing appears to suggest a sense of wonder at why it is that those in power are not doing the obviously intelligent things. He dare not speak the words that would betray the media owners, the words that remind that it's ALL a masquerade now, from the easily-purchased election outcomes, to the whores that occupy most of congress and the senate. And what can be said about our courts, when the likes of Yoo can still practice? When a unitary executive cum torturer gets to prance around like a smart-ass frat boy, bragging to himself that he killed more than any OTHER serial killer ever did, and instead of getting the same chair he consigned so many petty murderers to, he probably does his morning biological expunging-of-sins on a gold-plated toilet-throne.
Belief in the law of karma keeps me sane in these oppressive, unconscionable, upside-down times.
They live on the planet of neo-liberals. The idea is turn the middle, working and poor classes into serfs or let them die. You live on the planet of rational ideas will make a difference and sane policy matters to anyone in power. It doesn't. All this questioning and rationality goes nowhere because there is no movement of people to back it up. The rich see the collapse coming. They want to grab up everything and hide in their mountain tops and gated communities with it while the rest of the world perishes. It won't work but that is what's going on.
All the intellectual fire power will be for nothing without organizing a huge resistance on the ground. The days of rational policy discussion are over. The owning class intends to take everything and they have bought the politicians to help them do it.
Lets get a clue about where we are in this world.
"organizing a huge resistance on the ground"
That's right, Artemix, that's what we need. But hardly anyone on this site talks about what KIND of resistance and how to organize it.
I'm afraid that CD is everyone talking about the rain and nobody doing anything about it.
Once again, can CD sponsor an ORGANIZERS' FORUM?
In order to organize, you need to agree on a common mission. I can't see that agreement happening here. Also, I have seen little evidence that commenters, with maybe three or four exceptions, have any experience in organizing. More importantly, I'm not sure organizing should happen in a public, anonymous space.
You may want to check out http://www.masspartyoflabor.org/ ----- still in its infancy. I doubt they will go the way of the public forum, however. Such work needs to be done face-to-face and locally.
I understand exactly what you're saying. Maybe it would be helpful to have something central where we offer our skills. So, if a group needs a specific skill or even advice, there would be someone to call on. For example, quite through necessity rather than design, I have accumulated quite a bit of experience in ballot access and would be willing to help potential candidates, even if that help goes only so far as interpreting the state rules. I'm not talking about paid professionals advertising but those of us willing to donate our time to something that feels legitimate. I got this idea when a commenter said she had voted through write-in for a candidate who couldn't get on the ballot, and I saw no evidence the commenter had helped the candidate get on the ballot. I checked out the candidate and saw she needed lots of help on all levels, starting with changing her email name so it didn't have the daddyslittlebimbo@yahoo.com sound. We have plenty of good will and good intentions out there, but on their own without serious refinement and organizing, they aren't worth much.
"More importantly, I'm not sure organizing should happen in a public, anonymous space."
I think you're right, sherry. It shouldn't. In fact, it should be a deeply underground effort, invisible, stealthy, and nimble. How it would germinate, I haven't an answer.
Hi Sherry,
Thanks for writing.
You're right, to organize you need a common purpose. But I'm not asking for the people on CD to get together on an organizing project. All I want is an exchange of information, especially about organizing techniques.
You could tell people how you help with ballot access, and all the people who are interested in voting would get together in your corner, or thread. I could tell people about how to organize garden work parties in neighborhoods, so that all the neighborhood organizers could learn from each other and add to their repertoire. And masspartyoflabor.org (Thank you for that) would report in a section about labor organizing. The best contributions, as determined by vote, as in Amazon, would stay up for a long time, so that we would have a library of organizing techniques and experiences.
And maybe, just maybe, some of the people who are now consumed with clarifying their positions would be inspired to get out and do some real work. And/or, Common Dreams would begin to attract people who are out there organizing.
CD people have enough in common so that I would trust them with my best organizing tricks. How about you?
laurenceofberk, the Working Families Party is on the ballot in 6 states, and they endorse progressive candidates who are not bought by corporations. Here in my state (OR) they endorsed Representative Peter DeFazio but not Senator Ron Wyden - they had their own candidate for the Senate instead, Bruce Cronk, for whom I was delighted to vote. The corporate weasel won anyway but we're just beginning this fight. I would like to see their website endorse candidates in all 50 states and maybe that would encourage more people to join the party!
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
CD has been a real aid to keeping my sanity for quite a while now, but lately I have a hard time even getting through most of the articles. The worm has turned, the scales have fallen from my eyes, whatever. I just can't stomach reading about how Obama needs to do this or that anymore. These are fairy tales for the people who aren't quite so thick as your average tea-bagger, an alternate reality for those who aren't dumbed down enough to willfully cheer on their own destruction.
It isn't a question of IF the deficit hawks get their way, it's just a matter of when. How can anyone be expected, at this point, to imagine any other outcome? Obama the Quisling and his little Lords and Ladies no longer have to resort to the wild contortions and fantastic flights of fancy to explain why they can't get a god-damned thing done for the working class when they hold all the cards. Now they can go back to mewling about what they WOULD do for us if they had control.
My Dad always said that there were two kinds of republicans, the rich ones, and the stupid ones. I'm sorry to say that that old saw now works just well for the corrupt, lying democrats as well. To hell with all of them.
Time for a site called Common Reality?
Or perhaps Common Future. We have Common Dreams to describe what's wrong (current reality) and therefore help us visualize we really want/need, where we must head; a Common Future could deal with the nuts and bolts of how to get there.
"My Dad always said that there were two kinds of republicans, the rich ones, and the stupid ones. I'm sorry to say that that old saw now works just well for the corrupt, lying democrats as well. To hell with all of them."
That sums things up so well, there is simply nothing else to add.
"I just can't stomach reading about how Obama needs to do this or that anymore."
Amen! There is no delusion like liberal self-delusion.
Hi Bundecutchie,
My version of your dad's saying is this: "All republicans belong in mental institutions, the leaders for the criminally insane and the followers for the feeble minded."
I'm also tired of the limits of CD. But I'm tired of the whole debate: Can the Dems be saved or reconverted, or are they too irrevocably part of the capitalist establishment to ever make a difference? (The majority opinion here.)
OK, so we mostly agree. The Dems are part of the capitalist establishment. So what in bloody hell are you going to DO about it?
Hardly a hint on these pages.
"What is to be done?" is the primary political question. (And no I'm not a Leninist) Discussing history or theory is interesting and fun if done well and with variety, but it is only USEFUL if it helps us figure out what to DO. That's why we need an ORGANIZERS' FORUM which will be frequented by those who are engaged in social action or who want to be.
It seems perfectly obvious that the planet that people opposed to deficit spending and deficit budgets is the planet of reality.
They are well aware that you cannot endlessly borrow money to prop up your political wishes or unreasonable demands and promises.
Look at California, Greece and most of Europe to see where that road leads.
The problem is plain, the solution is what seperates us. But spending more, borrowing more is not a solution. Everyone will have to share the pain with those most able to bear it shouldering more than their share in the end. But everyone MUST share the pain and we must face the reality of deciding what we must have and what we don't need.
"Spending more and borrowing more" is always the solution. Without infrastructure and a workforce there will be no business and therefore no prosperity. Right wing radio is harping on this "you can't spend your way to prosperity!" theme. The opposite is true. Borrowing and spending on infrastructure is the only way to get to prosperity.
Various governments are in trouble because tax revenues are down, and tax revenues are down because the wealthy are not being taxed, and the wealthy are not being taxed because they have bribed the politicians and they control the mass media and have bamboozled people.
Everyone must share what pain? That makes no sense. The bottom 90% already has all of the pain. The upper 10% have been spared any pain - in fact, they have been coddled and rewarded more and more. So what sense does it make to cut relief to the bottom 90% and call that "sharing the pain?"
The right wing theme on this (now shared by Democrats apparently) is so absurd and illogical that it is hard to believe anyone is taking it seriously.
People who are really serious about deficits and the debt should be advocating outright confiscation of some of the loot the wealthy have been sucking out of the country. That would balance the budget in a big hurry. To the exact degree that the wealthy have been given tax cuts and welfare that is the degree to which this "crisis" has grown.
Come on, mightymite. You are smarter than this. Think it through.
Consider...
Spending and borrowing on projects that provide a return can provide prosperity. Borrowing and spending on for the "stimulus" packages, the bank bailouts, political payoff's of the Obama campaign provide nothing but debt. No jobs, no prosperity, no nothing but money for crony's.
IF you borrowed money and spent it on real infrastructure you would be correct....I do not see any spending of that kind. I don't listen to much RW radio except an occasional check but if that's what they are saying, they are correct as to what has been done.
Various states are in trouble because various states have made various choices. Yes tax revenue is down, but its because of government tax and trade policies plus proliferate spending for war and cronies. Spending for programs and policies we can no longer afford. It is a simple matter of economics.
I know what you are saying, but if your argument was taken at face value, California would be a rich state with no debt.
I will agree that the bottom 90% and for that matter the bottom 25% are experiencing the most pain. But it is not going to go away. It cannot be transferred to the "rich." My point is that we all are going to have to share it equally. Though I would certainly agree that perhaps those that have the most should share more equally in the pain to make up for past pleasures.
And this is not just us, Europe is going to be hurt worse than we will be. But no one is going to get off freely.
I would submit to you that the "deficit" cries of the right is simplistic but no more so than the lefts "soak the rich." It's far more complicated than that. I know you are aware of this as I have seen your posts enough to know your views (I think) on NAFTA, tax and trade and unregulated capitalism.
If we confiscated all the wealth of the rich it wouldn't solve the problem. I would certainly jump aboard your " To the exact degree that the wealthy have been given tax cuts and welfare that is the degree to which this "crisis" has grown," to which I'd add the political looting and social looting of the public treasury.
Trying to explain my view on this is like walking in quicksand, its so widespread, so complicated, so universal and yet so simple I end up tripping over my own words.
And the real problem with you first premise is what if we actually borrowed MORE money to spend on REAL infrastructure projects, built by people that don't get a few billion extra for cost over runs...would you trust the republicans or the democrats to choose the projects or who will build them?
Thanks for the response. I am interested in understanding your view of this, so keep trying.
You say "if we confiscated all the wealth of the rich it wouldn't solve the problem." Who is "we" and what problem would we not be solving?
Who is the "we" that you are saying "cannot afford" things?
I am not saying that we should confiscate wealth - we have no power to do that, if you are talking about working class people when you say "we" - have no power to do that. I am saying we should be advocating that. See the difference?
These debates are about what we are going to advocate, not about what we are going to do - again if "we" means the working class people. If by "we" you mean what the ruling class - the only ones who can do anything - then I have no interest in debating what that "we" should do. The only thing I want in regards to them is to see them be defeated.
"People who are really serious about deficits and the debt should be advocating outright confiscation of some of the loot the wealthy have been sucking out of the country. That would balance the budget in a big hurry. To the exact degree that the wealthy have been given tax cuts and welfare that is the degree to which this "crisis" has grown."
Well, that is exactly what an awful lot of people who are serious about deficits are recommending: Don't run deficits, tax the rich. Cut the military budget. Confront the problem and deal with it NOW, instead of kicking the can down to future generations. Unfortunately, multimillionaires like Paul Krugman don't like that idea. Not at all. So they recommend deficit spending instead. And it has the added bonus of discrediting progressives since the vast majority of people in this country would prefer to tax the rich rather than run endless and ever increasing deficits. Sorry, mightmite knows exactly what he's talking about.
Two Americas, you suggest "outright confiscation" to recapture the loot the wealthy have stolen.
But given that the wealthy (ruling-elite corporatist Empire) has really been looting/stealing via the mechanism of dumping negative externality costs on our society to create their faux profits, we can change your terminology and very rightly charge a 'negative externality tax' on the wealthy and their Empire --- which sounds better and more legal than 'confiscating' their loot.
The result is the same --- that society is repaid for the externality based looting --- but this is 'recovery' via valid government taxation on externality polluters for the costs imposed on society, rather than sounding like merely grabbing their ill-gotten gains. [Although I am not averse to outright 'capital reform', similar to 'land reform', to even the score in this perversely inequitable plutocracy where less than 1% holds more than 50% of asset wealth].
Yesterday (Sunday) I watched and re-watched "This Week" and "Meet the Press" several times to insure that my assessment was correct.
Yes, the assembled and dissbembling cast of pontificating political pawns, bureaucratic 'revolving door' mats, and media mouthpieces did a fabulous job of avoiding the real financial crisis facing the US ---- that the seminal cause of our looming, if not existential, disaster is that a ruling-elite corporate/financial/militarist EMPIRE nominally headquartered in our former country has, like all Empires, been creating faux profit for itself by dumping massive levels of 'negative externality costs' on the world in general and the US in particular through the corporatist industry sectors of; FIRE (finance, insurance, and real-estate), Oil, and Weapons.
Starting in 1980, and drastically accelerating since 2001 (when US economics Nobel Laureate, George Akerlof, correctly called it "not normal government economic policy, but rather a form of looting") the corporate/financial Empire controlling US policy has dumped over $10 trillion of negative externality costs on the American people in three forms of 'innovative' products; CDOs/CDSs, environment killing global warming, and multiple global wars on society and the world.
THIS, and not the normal costs associated with the operation of our government and the "consent of the governed" has been the singular cause of the global financial crisis, chaos, and cancer that we face today in the disguise of an ordinary 'deficit' or debt problem.
None of the professional distorters, dissemblers, and other facade of 'useful idiots' who serve this Empire for self-serving, monetary, and sometimes treasonous purposes, will say word one about the EMPIRE they serve.
Unfortunately, few of the knowledgeable economists (or economic reporters) either understand or will mention this truth to the people of America.
I was particularly disappointed in the most knowledgeable guest, economics Nobel Laureate Paul Krugman, who seemed to conflate that the heart of the deficit disaster is "health care costs". Paul, its not the health care costs --- its the Empire, stupid, and their looting via the weapon of negative externality cost dumping and gaming the whole system, bucko!
Alan Greenspan in his infamous Congressional appearance, after the the financial Empire's biggest heist, seemed like Capt. Renaud in "Casablanca" when he feigned, "I'm shocked. Shocked" that the financial Empire's crooks didn't even care to protect their own system (the markets).
Get used to it, Al, the corporate/financial/militarist EMPIRE will unabashedly, but guilefully, destroy everything in the long run, to simply keep the EMPIRE on life support for one more moment. But there are not many moments left. Which is what seemed to cause the only intelligent people; Greenspan, Bethany, and Paul, to look real scared in the short term.
Here's an article on what happens when a ruling-Elite Empire dumps massive and hidden Negative Externality costs on a country or global environment:
http://www.opednews.com/articles/1/-Empire-Elitism-External-by-Alan-MacDonald-090310-224.html
http://www.opednews.com/populum/print_friendly.php?p=-Empire-Elitism-External-by-Alan-MacDonald-090310-224.html
Alan MacDonald
Sanford, Maine
ALAN: Brilliantly articulated post. I am with you 100%. Thanks for contributing to the forum.
It is not the same, not in terms of political action and practical political effect, and here is why:
You can never get to "recovery via valid government taxation" without starting out with something much stronger, such as advocating 100% confiscation. There is no one who will be offended by the use of the word "confiscation" who is an ally, anyway. It is not our job to come up with explanations and ideas that will appeal to the upper 10%, it is not our role to be reasonable and calm and polite and practical.
We have a system whereby the few, the most ruthless and anti-social among us, have stolen massive wealth. That is easy to show, once you drop the obsessive need to impress the fancy-schmancy people - in other words the perceived need to kiss ass to the "winners," gain their approval, clear everything with those with status and credentials and power and influence.
The solution to that problem of stolen wealth - what we should be militantly advocating - is taking back the stolen loot and distributing it back to the working class people who created it and back into the infrastructure that supports the lives of the working class people. There is a small percentage of the population who gets nervous hearing that and will tell us to "tone it down" and who tell us we should be worrying and fretting about "alienating potential friends and allies." Yes, it is the loudest and most visible 10% of the population that is trying to put a lid on everything, the relatively successful and upscale. But they need to come to us, we need not crawl to them begging and cajoling.
"Potential friends and allies" really means "likely betrayers and deceivers." Obama is a prime example of a "potential friend and ally."
O Rei de Reis,
Yes 100% is harsh. But I don't think it is out of line either. We can quibble whether 10 million is enough, but the reason I put a cap in is because for someone like Bill Gates or Warren Buffet 10% of 5 Billion is 500 Million. Way too much wealth to pass along for the benefit of society as a whole.
If you look at some random twenty something kid, one born to a lower middle class or maybe even to what is actually poor family and compare that person to Paris Hilton, where is the level playing field? 10 million is STILL an awful lot of wealth, but it won't let you buy national elections, it won't lead to a defacto oligarchy based on birth - we as a nation are STILL dealing with the results of passing the great wealth of Rockefeller, Carnegie, and JP Morgan.
A second argument is that these people could NEVER have amassed their wealth, regardless of how they "earned" it without the use of the nations Commons. Things like the interstate highway system for moving goods, the patent and copyright offices and the courts to enforce them, the vast amounts of fresh water that industry uses, or the public education system - particularly the universities which not only provide their educated labor - but much of the basic research that leads to commercial technologies and products.
So yes, take 100% after a set threshold. No apologies.
I am TOTALLY with you on this! You could argue for it by saying it will save rich children from the "Paris Hilton Effect". The tax is being selflessly be implemented for the rich kids own good.
Framing is SO important when presenting an argument.
I agree.
please, can we focus on what specific actions one can take?
how about reducing your consumption of corporate products of all kinds as much as humanly possible?
how about organizing / joining a non-profit public community bank?
how about starting a website where everyone can find information on what others are doing and join what they like?
"The sacrifices in the proposed list of measures are not shared." Who would be the least bit surprised by this - it's the standard mode of thinking by our government.
The wealthy NEVER participate in the least in any "government scam" to fix the financial problems and shortages! It's always business as usual - "just screw the middle class!!!!!"
100% estate tax/Eisenhower income tax rates (91%). What a hoot! The people who advance these propositions are living in fantasyland.
Aside from worthless idiots like Dennis Kucinich and Bernie Sanders, no member of either the House or Senate would even entertain much of the idiotic drivel on this website. And for good reason. The wealth-hating losers who populate this website are way, way out of the mainstream. The voters don't love the Repubs, but they sounded rejected Obama and the Dems, and those types are very far to the right of the loons on this website.
So you are suggesting that if you make more money you should pay less in taxes? !0% of 50,000 is a lot more than 15% of a hundred thousand wouldn't you say? Or 20% of 200,000?
Why would you object to a 90% rate for someone taking home 7 billion a year?
So you support tearing down America's manufacturing sector, our industrial base then. You are supporting giving American workers job's to foreign citizen's. A winner take all, free for all with the most able crook getting the most.