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The budget put forth by Congressman Paul Ryan (R-WI) for fiscal year 2012 beginning in October makes fantastical claims about its impact on investment, economic growth, and jobs. Rep. Ryan is basing claims of incredible economic benefits from his 2012-2021 budget proposal--that cuts taxes for the rich and lumps burdens onto middle-class families--on forecasts generated by an economic model from the conservative Heritage Foundation. We've been down this path before.
And it wasn't pretty. Nor was it a prosperous path for most American families. Twice before, in 2001 and 2003, the Heritage Foundation provided economic forecasts purporting massive economic gains from President George W. Bush's tax cuts similarly slanted toward the very rich. To put it mildly, the Heritage economic model is worth less than a broken clock, which can at least be right twice a day. And something doesn't smell right about their latest predictions either--the ones that Rep. Ryan is trumpeting in support of his "Path to Prosperity."
If Heritage's model boasts any track record at all, it is that the opposite of what it predicts will happen, which means Rep. Ryan's new budget plan would be more aptly named "Path to Prosperity, But Only for the Rich." Consider the think tank's most recent predictions for the House Republican budget plan with its past failures.
The Heritage economic model predicts:
We've seen the reliability of Heritage economic modeling before. There's no reason to believe it now, either.
But this time around, the Heritage model's economic forecasts touted by Rep. Ryan are not just fantastical, they are wildly fantastical. We now have the data to evaluate the economic policies of tax cutting slanted toward corporations and the wealthy at the expense of middle-class families during the Bush presidency. We also have the data to evaluate the credibility of the Heritage Foundation's economic model. Both are clear failures that should be rejected by policymakers and the American people. So let's dig a little deeper into Heritage's inauspicious record.
Economists use models to predict how changes in policy or other factors will potentially affect economic outcomes. But, as with any modeling exercise, the real issue is what assumptions about how the economy works go into the mix. And it's those assumptions that are the fatal flaw of the Heritage model.
The Heritage estimates begin with the Joint Committee on Taxation's model of the effects of tax changes on the federal budget. They incorporate this into a so-called "dynamic" model of the economy. Heritage's model incorporates what they believe to be changes in people's behavior that will occur as a result of the changes in tax policy, thus the moniker "dynamic." The problem isn't that Heritage models behavior; it is that their model of behavior is not connected to how people in our economy have been shown to actually behave.
The Heritage model then compares its estimates to the Congressional Budget Office "alternative fiscal scenario," which include the fixes to the Alternative Minimum Tax and Medicare payments to physicians, both of which Congress repeatedly "fixes" every year. Heritage researchers then claim that the difference between that CBO baseline and their model's output is what we should expect if Ryan's budget is implemented. Since their model includes unrealistic models of how people will react to the Ryan policy changes, this leads to fantastical estimates of output and employment growth.
Anyone can make an economic forecasting model. But the true measure of a model's worth is how accurately it forecasts future economic developments. Before looking at what their model predicts for the Ryan budget proposal, it's important to understand how well this model has performed in the past. Heritage analyzed the 2001 and 2003 Bush tax cuts using a similar dynamic scoring methodology. In 2001 they predicted that if the Bush tax cuts were implemented, between FY 2002 and FY 2011 income for a family of four would increase by $4,544, investment in our economy would grow 1.9 percent a year, gross domestic product would grow by an average of 3.3 percent per year, more than 1.6 million more jobs would be added, and the unemployment rate would average to 4.7 percent over the 10-year period. But that's not what happened.
In fact, the period following the Bush tax cuts yielded one of the worst economic performances, as investment growth, employment, and output were slower than in any other economic recovery in the post-World War II era. Further, rather than growing by nearly $5,000, for the first time in any economic recovery since the end of World War II, our nation's middle-class families saw their incomes fall after factoring for inflation.
The actual feeble performance of our economy under the Bush-era tax cuts was a far cry from what the Heritage Foundation's economic model had predicted. Take, for example, Heritage's 2001 forecasts for job creation and GDP growth effects from the Bush tax cuts. To measure the effect of the Bush tax-cut policies, Heritage's forecasts and actual economic performance are compared to a baseline scenario of what would have happened in the absence of any policy changes. Heritage's model did not fare well in predicting the job-creation effect of the Bush tax cuts (see Figure 1).
In every year, the Heritage model simply gets the employment forecasts wrong, even before the start of the Great Recession in December 2007. Between 2001 and 2007, Heritage predicted the economy--spurred by the tax cuts--would add an average of 739,000 new jobs in addition to what would have been created in the baseline scenario. Instead, the Bush tax cuts failed to even maintain job creation at the baseline and job growth fell short of the baseline by 5.5 million jobs per year on average, and 6.2 million fewer per year than predicted by the Heritage model.
Including the years of the Great Recession shows the Heritage job forecasts to be even farther from the mark. But perhaps it is too much to ask their forecasting model to predict the drastic economic consequences of the tax-cutting policies it supported. And as the Bush tax cuts underperformed, the economy also fell farther and farther away from the baseline employment scenario, let alone the egregiously errant Heritage model predictions (to see Figure 2 and for the full article, click here).
Heather Boushey is a Senior Economist at the Center for American Progress. Adam Hersh is an Economist at the Center.
The Center for American Progress is a think tank dedicated to improving the lives of Americans through ideas and action. We combine bold policy ideas with a modern communications platform to help shape the national debate, expose the hollowness of conservative governing philosophy and challenge the media to cover the issues that truly matter.
"The overwhelming majority of Americans in all states support abortion rights—and women will fight to protect our rights and our lives," said the executive director of Women's March.
Thousands of people called for reproductive freedom at rallies around the United States on Sunday—the 50th anniversary of the landmark Roe v. Wade decision that made abortion a constitutional right until the Supreme Court's reactionary majority overturned it last summer.
At more than 200 events in 46 states, demonstrators condemned the court's 6-3 opinion in Dobbs v. Jackson Women's Health Organization, which enables states to curtail or even prohibit access to reproductive healthcare. Since the ruling was handed down on June 24, Republican lawmakers have enacted deadly abortion restrictions in 26 states, including near-total bans in several.
"Fifty years after the anniversary of Roe v. Wade, a radical right-wing movement hijacked our courts and eliminated federal protections for abortions," said Rachel O'Leary Carmona, executive director of Women's March, which organized Sunday's "Bigger Than Roe" day of action.
"But as the fight turns to the states, they are going to learn that the overwhelming majority of Americans in all states support abortion rights—and women will fight to protect our rights and our lives," she added.
Carmona spoke at the Wisconsin state capitol. Women's March picked Madison rather than Washington, D.C. as the location of this year's national protest because the group wanted to send "a clear message to elected leaders and to our base—we are going to where the fight is, and that is at the state level."
"We'll start in Wisconsin, where an upcoming Supreme Court election this spring will determine the balance of power on the state's Supreme Court and the future of abortion rights in Wisconsin," the group explained.
Due to legal uncertainty around the status of Wisconsin's pre-Roe abortion ban, enacted in 1849, providers have been forced to stop offering abortion care in the state.
\u201cWe're fired up and ready to march for our rights because this fight is bigger than Roe. They thought that we would stay home and that this would end with Roe \u2014 they were wrong. \n\nWe're putting every politician on blast \u2014 if you come for our rights, we'll come for you. Period.\u201d— Women's March (@Women's March) 1674414697
\u201cProud to be in Madison today fighting to let every politician know \u2014 if you come for our freedom, our families, or our futures, we're coming for you.\u201d— Rachel O\u2019Leary Carmona (@Rachel O\u2019Leary Carmona) 1674417721
\u201c\ud83d\udce2 In Wisconsin today to make ourselves clear: \n\nWe will never stop fighting for reproductive freedom! \n\n #BiggerThanRoe @womensmarch\u201d— NARAL (@NARAL) 1674422639
Women's March—with the support of nearly 50 organizations, including Planned Parenthood, Working Families Power, and the National Organization for Women—orchestrated "sister marches" in cities across the country.
"We are taking the fight to the states," organizers said. "From Wisconsin, to Nebraska, to Georgia, to Arizona and Texas, women and our allies are defending abortion rights where they still stand, and working to put measures on the ballot to regain abortion rights in places where politicians are putting their agendas over the will of the people."
Russian lawmaker Vyacheslav Volodin threatened nuclear war as NATO members debate whether to send more tanks to Ukraine.
Should the West continue to ship arms to Ukraine, Moscow will retaliate with "more powerful weapons," a top Russian government official and close ally of President Vladimir Putin said Sunday, referring to the use of nuclear missiles.
"Deliveries of offensive weapons to the Kyiv regime will lead to a global catastrophe," Vyacheslav Volodin, chairman of the State Duma, Russia's lower house, said in a statement shared on the Telegram messaging app.
"If Washington and NATO countries supply weapons that will be used to strike civilian cities and attempt to seize our territories, as they threaten, this will lead to retaliatory measures using more powerful weapons," said Volodin.
Ukraine, with the support of its Western allies, is seeking to reclaim territory illegally annexed by the Kremlin in recent months—not seize Russian land, as Volodin asserted.
Volodin's threat "comes amid arguments over whether Germany will send Leopard 2 battle tanks to Ukraine to fight the Russian invasion," Politicoreported. "Kyiv has requested the German-made tanks, which it says it needs to renew its counteroffensive against Moscow's forces."
This is not the first time that Russian officials have threatened to use nuclear weapons since Putin attacked Ukraine last February. On Thursday, one day before NATO and other military leaders met in Germany to discuss how to defeat Russia in Ukraine, former Russian President Dmitry Medvedev, now deputy chairman of the country's security council, said that a loss by Moscow could lead to nuclear war.
"Berlin has so far resisted the call from Ukraine and its allies to send the tanks without the U.S. making the first move, over fears of an escalation in the conflict," Politico noted Sunday. "Berlin also hasn't approved deliveries of the tanks from its allies, as Germany gets a final say over any re-exports of the vehicles from countries that have purchased them."
The news outlet previously reported that the $2.5 billion military package announced Thursday by the White House excludes the Army's 60-ton M1 Abrams tanks due to maintenance and logistical issues, not because sending them would intensify the war.
NATO has sent more than $40 billion worth of weapons to Ukraine since the beginning of Russia's invasion. The U.S. government, de facto leader of the military alliance, has authorized more than $26.7 billion alone.
On Sunday, Volodin urged U.S. and European lawmakers to "realize their responsibility to humanity."
"With their decisions, Washington and Brussels are leading the world to a terrible war: to a completely different military action than today, when strikes are carried out exclusively on the military and critical infrastructure used by the Kyiv regime," said Volodin.
Contrary to Volodin's claim, Russia has not limited its ongoing assault to military assets. According to a top Kyiv official, more than 9,000 Ukranian civilians have been killed since Russia invaded 11 months ago. The United Nations has confirmed more than 7,000 civilian deaths in Ukraine but says the real figure is much higher.
A strike on a Ukrainian apartment building last week, Russia's deadliest attack on civilians in months, killed dozens of people. Meanwhile, fighting near the Zaporizhzhia Nuclear Power Plant has sparked fears of a disastrous meltdown on multiple occasions.
"Given the technological superiority of Russian weapons," Volodin continued, "foreign politicians making such decisions need to understand that this could end in a global tragedy that will destroy their countries."
"Arguments that the nuclear powers have not previously used weapons of mass destruction in local conflicts are untenable," he added. "Because these states did not face a situation where there was a threat to the security of their citizens and the territorial integrity of the country."
Volodin was echoing points made recently by other Russian officials. Asked Thursday if Medvedev's remarks that day reflected an attempt to escalate the war, Kremlin spokesman Dmitry Peskov said: "No, it absolutely does not mean that."
Peskov argued that Medvedev's comments were consistent with Russia's nuclear doctrine, which permits a nuclear strike after "aggression against the Russian Federation with conventional weapons when the very existence of the state is threatened."
As Reutersnoted, Putin has portrayed Russia's so-called "special military operation" in Ukraine as "an existential battle with an aggressive and arrogant West, and has said that Russia will use all available means to protect itself and its people."
Last January, one month before the start of the largest war in Europe since WWII, Russia, the United States, China, France, and the United Kingdom—home to more than 12,000 nuclear weapons combined—issued a joint statement affirming that "nuclear war cannot be won and must never be fought" and reaffirming that they plan to adhere to non-proliferation, disarmament, and arms control agreements and pledges.
Nevertheless, the five permanent members of the U.N. Security Council continue to enlarge or modernize their nuclear arsenals. For the first time since the 1980s, the global nuclear stockpile, 90% of which is controlled by Moscow and Washington, is projected to grow in the coming years, and the risk of weapons capable of annihilating life on Earth being used is rising.
In early October, U.S. President Joe Biden warned that Russia's war on Ukraine has brought the world closer to "Armageddon" than at any point since the Cuban Missile Crisis. Less than three weeks later, however, his administration published a Nuclear Posture Review that nonproliferation advocates said increases the likelihood of catastrophe, in part because it leaves intact the option of a nuclear first strike. The U.S. remains the only country to have used nuclear weapons in war, destroying the Japanese cities of Hiroshima and Nagasaki with atomic bombs in August 1945.
Experts have long sounded the alarm about the war in Ukraine, saying that it could spiral into a direct conflict between Russia and NATO, both of which are flush with nuclear weapons. Despite such warnings, the Western military coalition has continued to prioritize weapons shipments over diplomacy.
U.S. Secretary of Defense Lloyd Austin admitted last April that the U.S. wants "to see Russia weakened," implying that Washington is willing to prolong the deadly conflict as long as it helps destabilize Moscow.
U.N. Secretary-General António Guterres recently told attendees of the World Economic Forum in Davos: "There will be an end... there is an end of everything, but I do not see an end of the war in the immediate future. I do not see a chance at the present moment to have a serious peace negotiation between the two parties."
"We will not be the last," said Peet's Workers United.
In a win for workplace democracy, employees at a Peet's Coffee & Tea located in Davis, California formed the chain's first unionized shop in the United States on Friday.
Workers at the café voted 14-1 to join Service Employees International Union (SEIU) Local 1021.
"We will not be the last," tweeted Peet's Workers United (PWU), which organized the winning unionization campaign. PWU is the counterpart to Starbucks Workers United (SBWU), the outfit behind dozens of successful union drives nationwide.
SBWU organizer Tyler Keeling from Lakewood, California played an instrumental role in PWU's efforts, as detailed last week in Jacobin.
PWU expressed gratitude to Keeling before and after the union vote.
\u201cWe've been lucky to have Tyler by our side from the beginning! I don't know if we would have gotten this far without him!\u201d— Peets United (@Peets United) 1674078218
\u201cThank you for all the help you've given us from day 1. Beyond appreciative of you. Together we are strong.\u201d— Peets United (@Peets United) 1674342867
In November, Peet's workers at two locations in Davis filed for union elections with the National Labor Relations Board.
In a petition asking for community support, PWU wrote: "We are overworked, understaffed, and underpaid. Barista's raises are less than a tenth of inflation, there are pay discrepancies that do not align with seniority, skill, or any kind of logic, and we have been forced to shut down multiple times in the past month due to understaffing. We've had no viable recourse for removing toxic managers other than waiting for the problem to resolve itself."
"Meanwhile, our managers have been using union-busting tactics like Starbucks to divide and confuse us," organizers continued. "They've called in corporate higher-ups to have conversations about unionizing with employees, they've reinstated punitive scheduling and dress code measures, and posted misleading informational fliers in break rooms."
"We are fighting for fair wages, decent schedules, and corporate transparency, but two stores against a multimillion-dollar corporation is a lonely battle," they added. "Peet's has always taken pride in its loyal customers and loving community, and we need that now more than ever."
In a statement issued after workers voted overwhelmingly in favor of union representation, the company said that "while we had hoped for another outcome, we respect the right of our Davis employees to choose."
"As we follow the legally required next steps with the union at North Davis, we will continue to work for and with our employees companywide. That is the Peet's way," the company added.
According to PWU, Peet's executives went out of their way in the lead-up to the representation vote to dissuade workers from joining SEIU, including by holding anti-union captive audience meetings.
The corporation "paid a store manager from Chicago to fly to Davis to give his 'unbiased' opinion on unions," organizers said. "The president of the company came in and essentially begged people to give him another chance and to put all our faith in him."
The second Davis location that had also filed to hold a unionization vote withdrew its request last week. According to PWU, that happened because "corporate gave the entire staff... a $500 bonus for pulling their petition and for 'giving Peet's a chance.'"
Since December 2021, workers at more than 270 Starbucks locations across the United States have voted to unionize. Organizers have won more than 80% of their campaigns despite the corporation's unlawful intimidation and retaliation tactics.
Keeling of SBWU said Saturday that he is "so happy to have more coffee shops unionizing."
"The future looks bright," Keeling declared. "The new wave of unionization will save the world."