tagged w/ Deficit
Rich Americans get the majority of their income from capital gains, dividends, and "carried interest". This results in billionaires like Warren Buffett paying a lower tax rate on their total income than middle-class Americans, due to the lower rate on capital gains tax (currently 15 percent).
As part of a 3 trillion-dollar deficit reduction plan, Obama has proposed that those making more than a million pay a minimmum tax rate no lower than middle-income Americans. This can be achieved by raising the capital gains tax for the wealthy.
Please, sign this petition to ask Congress to make the super-rich pay their fair share. Hard working, middle-income Americans should not have to pay higher taxes than those at the top.
http://www.thepetitionsite.com/197/support-the-quotbuffett-rulequot-for-deficit-reduction/Rich Americans get the majority of their income from capital gains, dividends, and... more
Meet Little Fixer, the guy who apparently helps politics get done! He helped out with the debt ceiling, deficit negotiations and much more. Little Fixer is here to stay, at least for Republicans.
http://veracitystew.com/2011/09/15/bipartisansh-video/Meet Little Fixer, the guy who apparently helps politics get done! He helped out with... more
Once again a crisis is looming for the government. One that is being presented a a problem with labor at its heart. Note how many times the articles states that the union has a no lay-off clause, that too much money was paid into pension funds, and that postal workers have better health care than anyone else.
The real problem is the law that Congress enacted that reorganized the postal service in 1970 making it a self supporting agency, rather than one supported by taxes. This would be a good move, yet the law also forbids the postal service from making a profit, just break even. This means that upgrades to the system were slowed down waiting on Congressional approval, making the postal service less efficient than UPS or FedEX.
Now as a way to keep the USPS solvent, the Postmaster General is looking at laying off 120,000 workers, in violation of its contract. Further, Rep Issa (R) is pushing for an emergency oversight board that could order huge cost-cutting and void the postal service’s contracts.
It's all the workers fault. It's always the workers fault, never the fault of congress or management when businesses fail. This is what happens when workers are constantly made out to be the bad guys, rather than taking the union (workers actually) and making them part of the solution. Unions should be on the boards of directors, they should get to look at the books, they should be part of the solution to making the business more efficient and profitable, while maintaining wages, benefits and jobs. Maybe if a corporation just asked the right questions of the workers, rather than creating an adversarial relationship, the economy would be in better shape, more people would be employed and less jobs would have been shipped overseas.
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances. In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts. The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.
At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.Once again a crisis is looming for the government. One that is being presented a a... more
Campaign for America's Future / Guide
Published: Tuesday 30 August 2011
"These things really matter. We all want to fix the terrible problems the country has. But it is so important to know just what the problems are before you decide how to fix them."
Problem: Your right-wing brother-in-law is plugged into the FOX-Limbaugh lie machine, and keeps sending you emails about "Obama spending" and "Obama deficits" and how the "Stimulus" just made things worse.
Solution: Here are three "reality-based" charts to send to him. These charts show what actually happened.
(For the complete story go to http://www.nationofchange.org/three-charts-email-your-right-wing-brother-law-1314715523)
Join NationofChange today by making a generous tax-deductible contribution and take a stand against the status quo.NationofChange Dave Johnson Campaign for America's Future / Guide Published:... more
Useless news alert: Tax cuts and war contribute more to our burgeoning debt than Obama's new policies
Talk about your left-wing blogger link bait! On Sunday, the New York Times published a chart demonstrating the relative contributions to the deficit made by George W. Bush and Barack Obama. Short version: The total cost of new policies initiated during the administration of George Bush: $5.07 trillion. Barack Obama: $1.44 trillion.
(more at link)Useless news alert: Tax cuts and war contribute more to our burgeoning debt than... more
One of the problems that the Congress is encountering as it tries to raise the debt ceiling is that a significant number of Republican and Tea Party Members of Congress apparently hold the view that there actually would not be consequences for global markets or the US economy if we defaulted. This view is, of course, absurd -- but it illustrates a larger problem. Dramatic changes in the way we communicate with one another about issues affecting the common good have diminished the role of reason and fact-based analysis, encouraging ideological extremists to construct their own alternative version of reality and defend it against fact-based reasoning.
The same problem is found in the debate over the climate crisis. Notwithstanding the unanimous opinion of every National Academy of Science in every major country in the world, every professional scientific society in fields related to the study of the climate crisis and 97 percent of climate scientists in the world, many ideologues cling to the view that these facts are wrong, that scientists are perpetrating a hoax, that they are either greedy for more research dollars or secretly promoting the expansion of government, and that authorities such as Rush Limbaugh and Glenn Beck are more reliable than the global scientific community in analyzing the impact of global warming pollution.
Two months ago, I wrote an article in Rolling Stone, linked here, that dealt with this issue. http://www.rollingstone.com/politics/news/climate-of-denial-20110622?page=1
In the same way, because the banks had their way with Congress when it came to gambling on unregulated derivatives and recklessly endangering credit markets with subprime mortgages, we still have almost double-digit unemployment, historic deficits, Greece and possibly other European countries teetering on the edge of default, and the threat of a double-dip recession. Even the potential default of the United States of America is now being treated by many politicians and too many in the media as yet another phony wrestling match, a political game. Are the potential economic consequences of a U.S. default "real"? Of course they are! Have we gone completely nuts?
We haven't gone nuts -- but the "conversation of democracy" has become so deeply dysfunctional that our ability to make intelligent collective decisions has been seriously impaired. Throughout American history, we relied on the vibrancy of our public square -- and the quality of our democratic discourse -- to make better decisions than most nations in the history of the world. But we are now routinely making really bad decisions that completely ignore the best available evidence of what is true and what is false. When the distinction between truth and falsehood is systematically attacked without shame or consequence -- when a great nation makes crucially important decisions on the basis of completely false information that is no longer adequately filtered through the fact-checking function of a healthy and honest public discussion -- the public interest is severely damaged.
"That is exactly what is happening with U.S. decisions regarding the climate crisis. The best available evidence demonstrates beyond any reasonable doubt that the reckless spewing of global-warming pollution in obscene quantities into the atmospheric commons is having exactly the consequences long predicted by scientists who have analyzed the known facts according to the laws of physics."
Cross-posted from Al's Journal http://blog.algore.com/One of the problems that the Congress is encountering as it tries to raise the debt... more
Cutting spending without increasing revenues will only solve half of the problem. Ending the wars will save some money short term, however, we will now have medical bills for years because of the amount of service personel with injuries and mental illness. So long term those costs will increase along with our aging population for medical coverage.
The tax cuts under Bush were unfunded. causing loss revenue for the government at a time when expenses were rising due to the war. This caused increased borrowing to pay for the two wars. On top of this, the RIPublican controlled Congress passed the Medicare Drug Plan which again was unfunded. That has caused even more borrowing.
Obama has backed off of every demand that he made, a plan must have revenue generation, must be "grand" and long term, and has essentially gone for the original Ryan plan. Yet the RIPublicans say that is not enough. The also say that the savings form ending the wars is a gimmick. But that was the heart of their plan under Ryan.
The Tea Party will wreck this country. They want to reduce the government to nothing more than any group of RIPublicans ever wanted. They want a balanced budget amendment to the constitution, which will destroy this country the first natural disaster we have. ALL THEY CARE ABOUT IS HOW MUCH MONEY THEY CAN MAKE AND HOW MUCH MONEY THEY CAN KEEP. They are the most unChristian Christians on the planet.
Read the full text of Obama's speech here.
http://www.huffingtonpost.com/2011/07/25/obama-debt-ceiling-address-nation_n_909212.htmlCutting spending without increasing revenues will only solve half of the problem.... more
Kristrina Vanden Heuvel is spot on in calling out the MSN, the President, and Congress for not even looking at the CPC budget proposal that lowers the debt ot GDP ratio more than any other proposal out there.
"Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years. Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession. Our Budget’s Bottom Line:
• Deficit reduction of $5.6 trillion
• Spending cuts of $1.7 trillion
• Revenue increase of $3.9 trillion
• Public investment $1.7 trillion"
There is no reason to go with the Gang of Six or CUT, CAP, and FUCK.
http://epi.3cdn.net/55d8ba5873e5bd097e_avm6b8rb1.pdfKristrina Vanden Heuvel is spot on in calling out the MSN, the President, and Congress... more
Peter Beinart at The Daily Beast tells it like it is:
"If the debt-ceiling negotiations reveal anything about America in 2011, it is this: we live in an age of political amnesia. From the day the Twin Towers fell until the day Barack Obama was elected president, Washington Republicans did virtually everything in their power to increase the deficit."
"George W. Bush and his congressional allies pushed through tax cuts in 2001 and 2003 that, according to the Congressional Budget Office, added more than $2 trillion to the deficit over 10 years. In 2002, when National Economic Council director Lawrence Lindsey suggested the Iraq War might cost $100 billion to $200 billion, he was rebuked by Office of Management and Budget director Mitch Daniels and Defense Secretary Donald Rumsfeld and then fired. According to the CBO, the war has now cost more than $1 trillion.
http://www.thedailybeast.com/articles/2011/07/18/debt-ceiling-crisis-gop-has-double-amnesia-on-deficits-regulation.html?om_rid=Nsfz6v&om_mid=_BOJC1RB8cY9n18Peter Beinart at The Daily Beast tells it like it is: "If the debt-ceiling... more
Exactly what the hell is going on around here?
On Thursday, headlines on both the Washington Post and the New York Times announced that President Obama had put both Social Security and Medicare on the chopping block, as part of some “grand bargain” with House Speaker Boehner and the GOP to cut the deficit and avoid blowing the August 2 debt limit deadline. The deal, as reported, would also include as much as $1 trillion in “new revenue” to be raised by closing off and eliminating loopholes in the tax code. No tax increases of any kind were on the table.Exactly what the hell is going on around here? On Thursday, headlines on both the... more
Is America in denial about the extent of its financial problems, and therefore incapable of dealing with the gravest crisis the country has ever faced?
This is a story of debt, delusion and - potentially - disaster. For America and, if you happen to think that American influence is broadly a good thing, for the world.
The debt and the delusion are both all-American: $14 trillion (£8.75tn) of debt has been amassed and there is no cogent plan to reduce it.
The figure is impossible to comprehend: easier to focus on the fact that it grows at $40,000 (£25,000) a second. Getting out of Afghanistan will help but actually only at the margins. The problem is much bigger than any one area of expenditure.
The economist Jeffrey Sachs, director of Columbia University's Earth Institute, is no rabid fiscal conservative but on the debt he is a hawk:
"I'm worried. The debt is large. It should be brought under control. The longer we wait, the longer we suffer this kind of paralysis; the more America boxes itself into a corner and the more America's constructive leadership in the world diminishes."
The author and economist Diane Coyle agrees. And she makes the rather alarming point that the acknowledged deficit is not the whole story.
The current $14tn debt is bad enough, she argues, but the future commitments to the baby boomers, commitments for health care and for pensions, suggest that the debt burden is part of the fabric of society:
"You have promises implicit in the structure of welfare states and aging populations that mean there is an unacknowledged debt that will have to be paid for by future taxpayers, and that could double the published figures."
Richard Haass of the Council on Foreign Relations acknowledges that this structural commitment to future debt is not unique to the United States. All advanced democracies have more or less the same problem, he says, "but in the case of the States the figures are absolutely enormous".
Mr Haass, a former senior US diplomat, is leading an academic push for America's debt to be taken seriously by Americans and noticed as well by the rest of the world.
He uses the analogy of Suez and the pressure that was put on the UK by the US to withdraw from that adventure. The pressure was not, of course, military. It was economic.
more at link
http://www.bbc.co.uk/news/world-13906274Is America in denial about the extent of its financial problems, and therefore... more
We must fight the deficit hysterics' relentless granny-bashing. Most people don't grasp that this group has already been hit hard by budget cuts and the recession.
“We lived very well,” said Norma Hair, 71, over a shaky table at the small pizzeria she runs in San Miguel de Allende, Mexico, with 68-year-old Carol Schmidt, her wife and partner of over 30 years. “In 1979, Carol was making $33,000 per year, which was a lot of money back then. Then I rose to the position of supervisor of accounting in a company. So, our combined income [in the early-1980s] was probably about $60,000.”
The two women are sharp, with bright, youthful eyes and a slightly wicked sense of humor. But their bodies betray their years. “The reason we have nothing,” says Hair, “is because we spent everything we could on medical to keep Carol alive when we were in the United States.” Both women suffer from chronic heart problems in addition to other ailments.
“Hospitals have to treat you for life-threatening illnesses,“ explains Hair. “[Carol] got two lifesaving surgeries for nothing. But it was getting harder and harder, so I decided that it was easier if we traveled to different cities.”
So they did. They sold their home, bought an RV and toured the nation's emergency rooms. “We were on the road for three and a half years,” says Schmidt, “just so we could go to a new ER each time and they wouldn't be suspicious -- oh, you're back again?"
The two have lived in Mexico since 2002, in part because of their love for the country, but also because they can live well on their combined income of $2,200 per month – Social Security, a little money from a self-published book and Schmidt's small pension. The health care is cheap, too – Schmidt had what she described as an “atrial fib situation” a few weeks before our interview, and an overnight stay at the hospital cost them $45. The ambulance ride required only a “donation,” and the women offered 200 pesos – about $18 dollars.
They've also got Medicare in the US to fall back on. “I had a serious operation in 2003, and I did go back,” says Schmidt. “My surgeon told me, 'I'm going to operate or you're going to die.'” Even inexpensive health care can add up when the procedures are complicated, and the two women couldn't afford to pay for the surgery out-of-pocket. In other words, Carol Schmidt owes her life to the relatively threadbare social safety-net that their country of birth provides.
They are two among millions of older American struggling to get by. “One out of three seniors in the United States is economically insecure,” Howard Bedlin of the National Council on Aging told journalist Paul Kleyman. “Yet the public perception is that seniors are doing fine and not struggling.”
The GOP may lose control of the House as a just reward for passing Paul Ryan's draconian budget – one that would replace the popular single-payer Medicare system with vouchers the elderly would then fork over to private insurance companies (assuming they'd cover them). It's somewhat of a political mystery why they'd touch that third rail given that the measure has no chances of passing the Democratic-controlled Senate, much less surviving Obama's veto pen. I've argued that it was the result of a party believing its own spin:
For years, the American Right has portrayed itself as representing “real America,” as Sarah Palin put it. They've long characterized the U.S. as a “center-right” nation full of people who hate “big government,” and they've portrayed popular social safety-net programs as somehow being foreign, if not unconstitutional signs of “creeping socialism.” Last year, when they swept into control of the House, they convinced themselves that the American public had enthusiastically handed them a mandate.
But on a more basic level, it's likely they thought they'd insulated themselves from the wrath of seniors – a major demographic for the GOP – by leaving Medicare intact for anyone over 55 years of age. The problem for Republicans is that older Americans know quite well how difficult it can be to live out one's golden years in the United States, and they have no interest in making it much harder for their children and grandchildren when they reach retirement age. This is where ideology – the Right's emphasis on individuals taking care of themselves – meets the real world, one in which people suffer from heart attacks and strokes and require thousands of dollars in prescription drugs to stay alive.
The National Council on Aging did a study earlier this year which found that most people don't grasp the tenuous situation many of our elderly find themselves in today. Among the findings, as summarized by Kleyman:
Less than one-third of Americans knew that low-income elders now pay 25 percent of their incomes for health care out-of-pocket, despite having Medicare.
Only one in six people understood that 40 percent of seniors recently faced such housing problems as being unable to pay their mortgages or living in dilapidated housing.
Only one in five knew that nearly 6 million older Americans are at risk of going hungry.
Fewer than one-fifth of those surveyed knew that average credit-card debt for seniors was $10,000.
Read the rest here
http://www.alternet.org/news/151094/stop_the_granny_bashing%3A_despite_what_you_may_think%2C_our_seniors_are_in_trouble?page=entireWe must fight the deficit hysterics' relentless granny-bashing. Most people... more
El buen desempeño de la balanza de pagos de México apoya la revaloriazión de la moneda mexicana que sigue consolidándose por debajo de 11,70 pesos por dólar.El buen desempeño de la balanza de pagos de México apoya la... more
Podría desde componer una canción a coreografriar un baile sobre los riesgos existentes tanto al alza como a la baja, pero yendo directo al grano: en términos netos, me estoy volviendo negativo.Podría desde componer una canción a coreografriar un baile sobre los... more
“Ford to New York: Drop Dead,” said a famous headline in 1975. President Ford had declared flatly that he would veto any bill calling for “a federal bail-out of New York City.” What he proposed instead was legislation that would make it easier for the city to go bankrupt.
Now the Federal Treasury and Federal Reserve seem to be saying this to the states, which are slated to be the first ritual victims in the battle over the budget ceiling. On May 2, Treasury Secretary Timothy Geithner said that the Treasury would stop issuing special securities that help state and local governments pay for their debt. This was to be the first in a series of “extraordinary measures” taken by the Treasury to avoid default in the event that Congress failed to raise the debt ceiling on May 16. On May 13, the Secretary said these extraordinary measures had been set in motion.
The Federal Reserve, too, has declared that it cannot help the states with their budget problems -- although those problems were created by the profligate banks under the Fed’s purview. The Fed advanced $12.3 trillion in liquidity and short-term loans to bail out the financial sector from the 2008 banking collapse, 64 times the $191 billion required to balance the budgets of all 50 states. But Fed Chairman Ben Bernanke declared in January that the Fed could not make the same cheap credit lines available to state and local governments -- not because the Fed couldn’t find the money, but because it was not in the Fed’s legislative mandate.
The federal government can fix its own budget problems by raising its debt ceiling, and the too-big-to-fail banks have the federal government and Federal Reserve to fall back on. But these options are not available to state governments. Like New York City in 1975, many states are teetering on bankruptcy.
A Beacon in the Storm
Many states are in trouble, but not all. North Dakota has consistently boasted large surpluses, aided by a state-owned bank that is showing landmark profits. On April 20, the Bank of North Dakota (BND) reported profits for 2010 of $62 million, setting a record for the seventh straight year. The BND’s profits belong to the citizens and are produced without taxation.
Inspired by North Dakota’s example, twelve states have now introduced bills to form state-owned banks or to study their feasibility. Eight of these bills have been introduced just since January, including in Oregon, Washington State, Massachusetts, Arizona, Maryland, New Mexico, Maine and California. Illinois, Virginia, Hawaii and Louisiana introduced similar bills in 2010. For links, dates and text, see here.
The Center for State Innovation, based in Madison, Wisconsin, was commissioned to do detailed analyses for Washington and Oregon. Their conclusion was that a state-owned bank on the model of the Bank of North Dakota would have a substantial positive impact on employment, new lending, and government revenue in those states.
The BND partners with local banks in providing much-needed credit for local businesses and homeowners. It also helps with local government funding needs. When North Dakota went over-budget a few years ago, according to the bank’s president Eric Hardmeyer, the BND acted as a rainy day fund for the state; and when a North Dakota town suffered a massive flood, the BND provided emergency credit lines to the city. Having a cheap and readily available credit line with the state’s own bank reduces the need for massive rainy-day funds that are a waste of capital and are largely invested in out-of-state banks at very modest interest.
What States Can Do with Their Own Banks
North Dakota has a population that is less than 1/10th the size of Los Angeles. The BND produced $62 million in revenue last year and $2.2 billion in loans. Larger states could generate much more.
Banks create “bank credit” from capital and deposits, as explained here. The Bank of North Dakota has $2.7 billion in deposits, or $4000 per capita. The majority of these deposits are drawn from the state’s own revenues. The bank has nearly the same sum ($2.6 billion) in outstanding loans.
You can get a rough idea of what a state bank could do for your state, then, by multiplying the population by $4,000. California, for example, has 37 million people. If it had a state-owned bank that performed like the BND, it might amass $148 billion in deposits. This $148 billion could then generate $142 billion in credit for the state, assuming the bank could come up with $12 billion in capital to satisfy the 8% capital requirement imposed on banks.
Note that this capital would not be an expenditure. It would just be an investment; and like any capital investment, it would actually make money for the state. The Bank of North Dakota has had a return on equity in recent years of 25-26%, and a major portion of this has been returned to the state treasury. All states have massive rainy day funds of various sorts. Some of this money could simply be shifted into equity in the state’s own bank.
There are many options for using the state’s credit power, but here is one easy alternative that illustrates the cost-effectiveness of the approach. Assume California’s state-owned bank invested $142 billion in municipal bonds at 5% interest. This would give the state $7 billion annually in interest income. California has outstanding general obligation bonds and revenue bonds of $158 billion, and $70 billion goes for interest. If California had been funding its debt through its own bank for the last decade or two, it would have saved $70 billion on its bonded debt and would be that much richer today.
In a futile attempt to “balance the budget” in a shrinking economy, we have been pressured into a self-destructive economic model in which the only alternatives are said to be to slash services, raise taxes, and sell off public assets. These are not our only alternatives. What destroyed our local economies was not excess government spending but was a credit crisis on Wall Street. We can restore the prosperity we lost by restoring credit in the state; and we can do that by taking our deposits out of Wall Street banks and putting them in our own state-owned bank, to be leveraged into credit for local purposes. For more information, see here.
Supporting links at:
http://www.globalresearch.ca/index.php?context=va&aid=24855“Ford to New York: Drop Dead,” said a famous headline in 1975. President... more
Según explican los analistas a Sala de Inversión América, la reciente debilidad de la moneda azteca es de carácter temporal. Sus fundamentales le permitirán defender el nivel de 12 unidades por dólar.Según explican los analistas a Sala de Inversión América, la... more
This is a teaser for an article I wrote on examiner.com.
"For of you who are not aware, the United States of America is hurtling toward collapse.
Standard and Poors recently reported that it was giving the USA a negative credit outlook as a result of our uncontrolled spending and resulting deficit.
And if you want to believe the dog and pony show the ruling class is putting on, they can't agree on how to resolve the deficit crisis. The Republicans and Democrats are arguing over $39 Billion in spending cuts when the real annual deficit is $1.65 trillion. It seems our country is divided between groups of people with different visions for the future..."
To continue reading for free on Examiner.com: The Solution - Split the USA in half - Minneapolis Independent | Examiner.com http://www.examiner.com/independent-in-minneapolis/the-solution-split-the-usa-half#ixzz1KfOJ34Pf
Those were my thoughts.
The Cynical Patriot
Patriot Action Network
Smart Girl Politics
Government Reform and Integrity Platform
http://www.youtube.com/watch?v=88OptJtqzWgThis is a teaser for an article I wrote on examiner.com. "For of you who... more
By Lindsay Beyerstein, Media Consortium blogger
The latest contrived showdown between Congressional Republicans and the White House is over what concessions the GOP will demand in order to increase the federal debt ceiling.
George Zornick of The Nation explains how the shakedown works:
Congress now needs to approve any borrowing past the $14.3 trillion debt ceiling, which the United States will reach “no later” than May 16, according to Treasury Secretary Timothy Geithner. If Congress doesn’t raise the debt ceiling, the government would have to stop spending—including stopping interest payments on those Treasury bonds, meaning that the United States would effectively default on its debt.
The debt ceiling has to be raised and everyone knows it. Surely the Republicans knew it when they voted for tax cuts for the rich with borrowed money. If the debt ceiling is not raised, the United States will default on some of its obligations. Just like what happens after you miss a credit card payment, the country’s creditors will demand higher interest in order to lend to us in the future.
Playing chicken with the debt ceiling is a recipe for increasing the national debt. Paul Waldman argues in The American Prospect that the Republicans hate government so much that they are willing to declare war on the economy in a quixotic bid to smash the state:
The reason we’re now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party’s agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that’s what it takes to strike a blow against the government they hate so much.
At AlterNet, Joshua Holland explains why failure to raise the debt ceiling would be an economic catastrophe that could jeopardize the economic recovery. “Peak Crazy,” he calls it.
However, Holland notes that a showdown over the debt ceiling does not risk an immediate government shutdown, like the one we faced over the budget battle. Borrowing isn’t the only way that government agencies are funded. The government could still spend the $150 billion or so it takes in every month in tax revenue, for example.
Yet, Senate Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP senators oppose raising the debt ceiling unless “credible attempts” are made to cut federal spending. Meanwhile the Tea Party is launching an all-out lobbying effort to urge House Republicans not to raise the debt ceiling without major spending cuts.
The Tea Party’s wish list includes some total pipe dreams like a balanced budget amendment to the constitution, and a law to require a two-thirds majority for all future tax increases. Former senator and current U.S. presidential hopeful Rick Santorum cheerfully announced that he would let the United States default on its debt if health care reform is not repealed. Rep. Michele Bachmann (R-Minn) helpfully suggests paying the interest on Treasury Bills using money that would otherwise go to Social Security.
Shoot the hostage
Cenk Uygur of the Young Turks argues that Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the Republican fringe in the form of a proposed “hard cap” on government spending, which would cap new government spending, and subtract any overruns from social welfare programs like Medicare and Social Security.
The truth, Uygur notes, is that Wall Street has already told the Republicans in no uncertain terms that the debt ceiling will be raised. The economic consequences of doing anything else would be unthinkable. The Tea Party can yell and scream, but the adults have already made the decision. Knowing this, Democrats should not be trying to placate the Republicans so as to induce them to do something they will ultimately end up doing.
Digby on Social Security
Democrats are wavering in their decades-long commitment to defend Social Security, Heather Digby Parton (a.k.a., “Digby”) writes in In These Times:
In a quixotic attempt to fix the problems in the current economy without confronting the plutocrats, the Democrats are using the illogical argument that since Social Security is projected to have a shortfall in 35 years, we must cut benefits now. And they seek to prove to “the market” that the government is fiscally responsible by showing it’s willing to inflict pain on its citizens—in the future.
Even if we do nothing, Social Security can pay out full benefits for the next 35 years. There is no crisis. A small increase on the payroll cap on Social Security could shore up the program for generations to come. Republicans oppose Social Security because they are ideologically opposed to social welfare programs, not because Social Security is broken.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.By Lindsay Beyerstein, Media Consortium blogger The latest contrived showdown... more