Let's see. In the few days since the debt deal was announced:
The New York Stock Exchange took the 9th worst single day plunge in its history.
S&P downgraded US treasury bonds for the first time since US treasury bonds began being rated.
The U.S. Postal Service announced plans to shut 2,500 post offices around the country (16% of all post offices) and cut tens of thousands of jobs.
HSBC announced plans to cut 30,000 jobs from their workforce by 2013.
This is only the beginning of the double dip, folks. We're headed for more pain, weak if any growth, a more sustained jobless period, and a continued widening inequality between the wealthy and the rest of us. Federal programs aiding the poor are being cut while no taxes will be raised on the wealthy, so the incomes of the poor will decline while the rich continue on unabated.
This is unsustainable. If the middle class, which has already been decimated by the financial crisis, doesn't have disposable income to spend, there won't be any growth. The lower 90% of the country is responsible for 70% of consumer spending. If they don't have anything to spend, the economy can't grow. At least not robustly enough for the private sector to pull our economy out of the high unemployment rut we're stuck in.
The solutions for all of this are simple, and unfortunately, toxic to many of our elected officials and the rabid tea partiers who are now given outsized power in our representative government. We need to throw the bums out in 2012. Unfortunately, as usual, the wrong bums will probably get thrown out. Those willing to govern rather than pander to special interests and compromise rather than stand as rigid ideologues.
As usual, voters get what they deserve.
We can do better.
Showing posts with label debt ceiling. Show all posts
Showing posts with label debt ceiling. Show all posts
Sunday, August 7, 2011
Monday, August 1, 2011
Debt Ceiling? We don't need no stinking Debt Ceiling!
The latest news out of DC is that Congress & the President have finally come to broad terms on a debt limit increase. This will be the 79th time in our history we've raised the debt ceiling, which until this past few months has always been a formality.
Why do we even have a debt ceiling? Well, it made some sense when it was instituted in 1917. At that time Congress did not have discretionary control of the federal budget - the president did. The Congress had broad powers about how much to spend and how much to tax, but the specifics were largely left to the president's priorities. That's no longer the case. It hasn't been since 1974 when Congress first began writing full budgets with line items for every spending appropriation and every form of federal revenue. Since that budget 37 years ago, Congress has done the same thing every year. And since that time the debt ceiling has been obsolete. The ceiling is no longer a curb on the president's ability to over-allocate resources, but now represents an artifact of a bygone era.
The rational course of action, of course, is to terminate the debt ceiling altogether, because now the fox is guarding the hen house. Congress appropriates the spending and raises the debt ceiling whenever they over-spend, which they usually do. The president's only role in all of this is to authorize spending that's already been approved by Congress.
I hope you see the absurdity of this ... Congress has approved spending and now must raise the debt limit, because the government cannot currently meet the obligations that Congress mandated. And Congress is refusing to do so unless the President agrees to cut spending.
The thing of it is, we can't not raise the debt ceiling, because the money has already been allocated. It's already been promised and according to the 14th amendment the federal debt shall not be questioned - meaning we are required to always pay our bills. So if for some reason this latest "deal" fell apart, the president could rely on the constitution to defend his decision to continue paying our debts. But instead, the Great Compromiser has agreed to bend over backward to slash spending in order to placate a fringe group that's got much of the House by the balls. I guess the Tea Partiers only agree with the Constitution when it agrees with them. Those pesky amendments were clearly mistakes.
So the plan that's been broadly agreed upon looks like it'll cut $1T to $2.4T over the next 10 years. It'll also establish a "Super Congress" (where is that in the holy Constitution?!) that will be authorized to find ways to slash spending and narrow the federal deficit. Notice all the focus on cutting spending ... almost no talk of raising taxes. This, of course, is because taxes are unpopular and everyone in DC is a child when it comes to responsible governance.
I don't argue that we should not find and eliminated inefficiencies in federal programs. No doubt that we should. But attacking programs vital to the working classes is not acceptable when there is enough waste in the system in defense and tax breaks for the wealthy to cover virtually all of our current budgetary shortfalls.
Unemployment stands at 9.2% according to the latest figures. That's still the official unemployment rate. Word is unofficial unemployment is still above 16% of all able bodied, working adults. The additional 7% represents those long-term unemployed. They've lost their unemployment benefits and are now unemployable, because employers have a strong bias against hiring the unemployed. So nearly 1 out of every 6 working age Americans is out of work. Think about that for a moment. 1/6th of our labor force is performing no productive labor - at least according to how we currently define productive, but that's another story.
And rather than tackling unemployment through direct spending as we did in the 1930s. Rather than extending benefits to those most in need. Rather than finding ways to create jobs, Congress has spent the past several months trying to find ways to reduce the size of the government, which will no doubt, cost thousands of federal employees their jobs. Where are they supposed to go work? You know where they'll go? They'll go on unemployment and they'll be scraping by and losing their houses while not being productive.
This entire debacle was self-created. There is absolutely no rational reason for this crisis. We've doused ourselves in gasoline and now we're trying really hard not to light that match in our hand. Idiots Rule. Unabated.
Why do we even have a debt ceiling? Well, it made some sense when it was instituted in 1917. At that time Congress did not have discretionary control of the federal budget - the president did. The Congress had broad powers about how much to spend and how much to tax, but the specifics were largely left to the president's priorities. That's no longer the case. It hasn't been since 1974 when Congress first began writing full budgets with line items for every spending appropriation and every form of federal revenue. Since that budget 37 years ago, Congress has done the same thing every year. And since that time the debt ceiling has been obsolete. The ceiling is no longer a curb on the president's ability to over-allocate resources, but now represents an artifact of a bygone era.
The rational course of action, of course, is to terminate the debt ceiling altogether, because now the fox is guarding the hen house. Congress appropriates the spending and raises the debt ceiling whenever they over-spend, which they usually do. The president's only role in all of this is to authorize spending that's already been approved by Congress.
I hope you see the absurdity of this ... Congress has approved spending and now must raise the debt limit, because the government cannot currently meet the obligations that Congress mandated. And Congress is refusing to do so unless the President agrees to cut spending.
The thing of it is, we can't not raise the debt ceiling, because the money has already been allocated. It's already been promised and according to the 14th amendment the federal debt shall not be questioned - meaning we are required to always pay our bills. So if for some reason this latest "deal" fell apart, the president could rely on the constitution to defend his decision to continue paying our debts. But instead, the Great Compromiser has agreed to bend over backward to slash spending in order to placate a fringe group that's got much of the House by the balls. I guess the Tea Partiers only agree with the Constitution when it agrees with them. Those pesky amendments were clearly mistakes.
So the plan that's been broadly agreed upon looks like it'll cut $1T to $2.4T over the next 10 years. It'll also establish a "Super Congress" (where is that in the holy Constitution?!) that will be authorized to find ways to slash spending and narrow the federal deficit. Notice all the focus on cutting spending ... almost no talk of raising taxes. This, of course, is because taxes are unpopular and everyone in DC is a child when it comes to responsible governance.
I don't argue that we should not find and eliminated inefficiencies in federal programs. No doubt that we should. But attacking programs vital to the working classes is not acceptable when there is enough waste in the system in defense and tax breaks for the wealthy to cover virtually all of our current budgetary shortfalls.
Unemployment stands at 9.2% according to the latest figures. That's still the official unemployment rate. Word is unofficial unemployment is still above 16% of all able bodied, working adults. The additional 7% represents those long-term unemployed. They've lost their unemployment benefits and are now unemployable, because employers have a strong bias against hiring the unemployed. So nearly 1 out of every 6 working age Americans is out of work. Think about that for a moment. 1/6th of our labor force is performing no productive labor - at least according to how we currently define productive, but that's another story.
And rather than tackling unemployment through direct spending as we did in the 1930s. Rather than extending benefits to those most in need. Rather than finding ways to create jobs, Congress has spent the past several months trying to find ways to reduce the size of the government, which will no doubt, cost thousands of federal employees their jobs. Where are they supposed to go work? You know where they'll go? They'll go on unemployment and they'll be scraping by and losing their houses while not being productive.
This entire debacle was self-created. There is absolutely no rational reason for this crisis. We've doused ourselves in gasoline and now we're trying really hard not to light that match in our hand. Idiots Rule. Unabated.
Wednesday, July 27, 2011
Our Leaders are Idiots
There is no better evidence that our educational system is in shambles than the complete inability of our leaders to learn from history. Clearly they didn't learn much of anything in school. Well, that's if they even went to school. A disturbingly high number of our leaders didn't even go to college, and yet we're entrusting them with decisions about our country's future? How is that even possible?
Shortly after the 1929 stock market crash the response from government was to cut spending and implement austerity measures in order to stabilize the markets. The opposite happened. A rapid contraction of government spending resulted in even less commerce and even less spending which caused businesses to fail and millions of Americans to lose their jobs, which sent the country into the Great Depression.
At first in the wake of the financial crisis of 2008, I thought maybe we'd learned from our mistakes. A rapid stimulus response pumped money into the economy and spared the crash that may have happened had it not been goosed with that money. But now, just as that stimulus money dries up, the budget hawks are calling for spending cuts and austerity measures. This is during a jobless recovery. We still have official unemployment of 9% and unofficial unemployment over 16%. More Americans are out of work today than were out of work during the Great Depression. Sure, we're a bigger country now, but that's still a lot of misery going around.
Meanwhile we have messages like this coming out of Congress:
Why do we deserve immediate spending cuts? What did we do to deserve having our safety nets slashed just when we're clinging to them to keep from falling into the abyss? Why do we deserve to have spending cuts when what we need right now is economic stimulus? We don't need a contraction in the one part of the economy that has actually continued to spend. We need continued investment in our economy to keep it from collapsing in on itself. We're not out of the woods ... we're still in the thick of it.
What we actually deserve is leadership up to the task of leading. Up to the task of defending the working (and unemployed, and elderly, and youth) people of the United States against the transgressions of the money whores.
If you're really concerned about the budget deficit and national debt, then raise taxes on those sectors that have actually weathered the storm with remarkable ease ... the top 2% that those Bush tax cuts went to. I know I've said all this before, but I'll keep on saying it, because it's still the truth.We're supposed to save during good times and spend during bad. The trouble is we spent during good and now those idiots who didn't pay attention in school want to save when times are bad. It's backward. It's stupid. It's ignorant.
But I guess I agree with one thing. It is what we deserve. Voters get what they deserve and in 2010 we actually invited the Republican party back into power and this is the result.
Bend over, America. The Boehner's back.
Shortly after the 1929 stock market crash the response from government was to cut spending and implement austerity measures in order to stabilize the markets. The opposite happened. A rapid contraction of government spending resulted in even less commerce and even less spending which caused businesses to fail and millions of Americans to lose their jobs, which sent the country into the Great Depression.
At first in the wake of the financial crisis of 2008, I thought maybe we'd learned from our mistakes. A rapid stimulus response pumped money into the economy and spared the crash that may have happened had it not been goosed with that money. But now, just as that stimulus money dries up, the budget hawks are calling for spending cuts and austerity measures. This is during a jobless recovery. We still have official unemployment of 9% and unofficial unemployment over 16%. More Americans are out of work today than were out of work during the Great Depression. Sure, we're a bigger country now, but that's still a lot of misery going around.
Meanwhile we have messages like this coming out of Congress:
Americans deserve immediate spending cuts that demonstrate that we are charting a swift path toward a balanced budget. We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year.This was a message from the Congressional Republican Study Committee.
Why do we deserve immediate spending cuts? What did we do to deserve having our safety nets slashed just when we're clinging to them to keep from falling into the abyss? Why do we deserve to have spending cuts when what we need right now is economic stimulus? We don't need a contraction in the one part of the economy that has actually continued to spend. We need continued investment in our economy to keep it from collapsing in on itself. We're not out of the woods ... we're still in the thick of it.
What we actually deserve is leadership up to the task of leading. Up to the task of defending the working (and unemployed, and elderly, and youth) people of the United States against the transgressions of the money whores.
If you're really concerned about the budget deficit and national debt, then raise taxes on those sectors that have actually weathered the storm with remarkable ease ... the top 2% that those Bush tax cuts went to. I know I've said all this before, but I'll keep on saying it, because it's still the truth.We're supposed to save during good times and spend during bad. The trouble is we spent during good and now those idiots who didn't pay attention in school want to save when times are bad. It's backward. It's stupid. It's ignorant.
But I guess I agree with one thing. It is what we deserve. Voters get what they deserve and in 2010 we actually invited the Republican party back into power and this is the result.
Bend over, America. The Boehner's back.
Sunday, July 24, 2011
Idiots are Well & Truly Running the Asylum
We're days away from a federal default on debt, whether it be on bonds or delaying payments to social security recipients. I still very much doubt that will happen, but in the meantime things are beginning to get dicey. We have Minnesota shutting down their state government for 20 days. We have recall elections taking place in Wisconsin in the wake of the rape of the public worker's collective bargaining rights.
And now we have federal agencies bracing for a lot of pain. In fact, the Federal Aviation Administration shut down its tax revenue collection offices at midnight last night. Please explain to me in what world when we're facing record budgetary shortfalls, it's at all acceptable for the government to stop collecting revenue? And of course, in response airlines raised their rates to take the savings from consumers and increase their bottom lines. Greedy corporations will nearly always do what is best for their bottom line - not what is best for the individual consumer or for society at large. The notable exceptions - the airlines that have at least temporarily passed the savings on to consumers are Frontier Airlines, Alaska Airlines, and Virgin America. Kudos to them. They deserve special mention when the rest all raised their rates an average of 7% overnight.
This is only the beginning if the debt default were to actually happen. We've got children, idiots, and madmen running the country. It's time for a big change. Kick the bums out. Start with every single Republican who has signed the pledge not to raise taxes. Their ideological purity fails the minute it is faced with the realities and responsibility of running a country.
And now we have federal agencies bracing for a lot of pain. In fact, the Federal Aviation Administration shut down its tax revenue collection offices at midnight last night. Please explain to me in what world when we're facing record budgetary shortfalls, it's at all acceptable for the government to stop collecting revenue? And of course, in response airlines raised their rates to take the savings from consumers and increase their bottom lines. Greedy corporations will nearly always do what is best for their bottom line - not what is best for the individual consumer or for society at large. The notable exceptions - the airlines that have at least temporarily passed the savings on to consumers are Frontier Airlines, Alaska Airlines, and Virgin America. Kudos to them. They deserve special mention when the rest all raised their rates an average of 7% overnight.
This is only the beginning if the debt default were to actually happen. We've got children, idiots, and madmen running the country. It's time for a big change. Kick the bums out. Start with every single Republican who has signed the pledge not to raise taxes. Their ideological purity fails the minute it is faced with the realities and responsibility of running a country.
Tuesday, July 19, 2011
Debt Ceiling Getting Closer
Why haven't I been blogging much? Well, most of all, because the topic of my last blog post - the debt ceiling fight - is still the topic at hand inside the beltway and I have little else to say about it. My position still stands.
As I suspected, the pundits are all a twitter about it and most of the country doesn't give a shit.
The Republicans have backed away from even the most reasonable of their positions and have now taken a stance that says "no new taxes ... ever" ... and they're saying it so strongly, they're signing pledges to prove their loyalty to conservative ideology. This is the extremism now displayed by 1/2 of our political parties. George Washington warned us at length about the dangers of a two party system and as has happened for the past 235 years, the public pays the price for their loyalty to one of two ideologies. As I'm fond of saying, "Voters get what they deserve."
Anyone frustrated with this current state of "broken government" needs only to look at the 2010 midterm elections to understand the cause. Giving the GOP control of the House of Representatives has resulted in a government that can't get anything done. Normally, a split government is a good thing. It keeps one party from ramming their agenda through without compromise. But the Democrats are so fractured that even when they had control of both houses and the White House, they could not pass health care or financial reform laws with sufficient protections for the American people. So what we end up with is a fractured Democratic party negotiating with an intractable and unified Republican party and nothing gets done.
Raising the debt ceiling, which is a no-brainer necessity, becomes fodder for forcing the Democrats into the Republican agenda of preserving tax cuts for the wealthy, cutting social programs, and leaving the military alone. When we could, in fact, lower our deficits substantially by doing just the opposite. The problem being, of course, the Republicans get far too much of their political support from those rich folks who benefit most from ridiculous tax loopholes that the GOP is now spinning as "raising taxes" if we stop letting them write off their corporate jets.
It's absurd, but nobody's really paying attention, because the country is bored to tears with this griping over completely unfathomable numbers. $30 billion, $2.5 trillion, etc. They mean nothing to the average person. Those figures are so abstract in our thinking. ... the average household income in America is around $50,000/year. $2.5T represents the combined annual income of 50 million American households. For perspective, there are approximately 117M households in the country, so $2.5T covers the total annual income of more than 40% of the country. And this is what our leaders re negotiating about with regard to our national debt.
How can we even wrap our heads around this?
Oh, and another tidbit. We're the only developed country in the world with an artificial debt ceiling. Other countries simply authorize their treasuries to issue new bonds to cover budget shortfalls and rely on the responsibility of their elected officials to adjust taxation and spending to accommodate any shortfalls or surpluses.
I guess that's only possible when your leaders behave like adults.
As I suspected, the pundits are all a twitter about it and most of the country doesn't give a shit.
The Republicans have backed away from even the most reasonable of their positions and have now taken a stance that says "no new taxes ... ever" ... and they're saying it so strongly, they're signing pledges to prove their loyalty to conservative ideology. This is the extremism now displayed by 1/2 of our political parties. George Washington warned us at length about the dangers of a two party system and as has happened for the past 235 years, the public pays the price for their loyalty to one of two ideologies. As I'm fond of saying, "Voters get what they deserve."
Anyone frustrated with this current state of "broken government" needs only to look at the 2010 midterm elections to understand the cause. Giving the GOP control of the House of Representatives has resulted in a government that can't get anything done. Normally, a split government is a good thing. It keeps one party from ramming their agenda through without compromise. But the Democrats are so fractured that even when they had control of both houses and the White House, they could not pass health care or financial reform laws with sufficient protections for the American people. So what we end up with is a fractured Democratic party negotiating with an intractable and unified Republican party and nothing gets done.
Raising the debt ceiling, which is a no-brainer necessity, becomes fodder for forcing the Democrats into the Republican agenda of preserving tax cuts for the wealthy, cutting social programs, and leaving the military alone. When we could, in fact, lower our deficits substantially by doing just the opposite. The problem being, of course, the Republicans get far too much of their political support from those rich folks who benefit most from ridiculous tax loopholes that the GOP is now spinning as "raising taxes" if we stop letting them write off their corporate jets.
It's absurd, but nobody's really paying attention, because the country is bored to tears with this griping over completely unfathomable numbers. $30 billion, $2.5 trillion, etc. They mean nothing to the average person. Those figures are so abstract in our thinking. ... the average household income in America is around $50,000/year. $2.5T represents the combined annual income of 50 million American households. For perspective, there are approximately 117M households in the country, so $2.5T covers the total annual income of more than 40% of the country. And this is what our leaders re negotiating about with regard to our national debt.
How can we even wrap our heads around this?
Oh, and another tidbit. We're the only developed country in the world with an artificial debt ceiling. Other countries simply authorize their treasuries to issue new bonds to cover budget shortfalls and rely on the responsibility of their elected officials to adjust taxation and spending to accommodate any shortfalls or surpluses.
I guess that's only possible when your leaders behave like adults.
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